Lao, République Démocratique Populaire

This chapter describes the Lao People’s Democratic Republic’s (Lao PDR) gradual integration in the world economy and the role of trade and investment in its economic development. It reviews trends in foreign direct investment in Lao PDR using various national and international data sources. It also looks at the performance of foreign investment relative to neighbouring and regional economies and its impact on the local economy.

This chapter provides an overview of the responsible business conduct landscape in the Lao People’s Democratic Republic (Lao PDR), outlining the actions the government has taken to facilitate, promote, enable, cooperate on and exemplify responsible business practices. It also provides recommendations for how the climate for responsible business conduct in Lao PDR could be further enhanced with a view to promoting quality investment and sustainable development.

This chapter assesses the investment framework for green growth in the Lao People’s Democratic Republic (Lao PDR).It looks at challenges and opportunities for sustainable economic growth and provides recommendations to improve the regulatory framework for green investment with a particular focus on private participation in renewable energies. It also reviews financing for green growth and how the country faces climate change-related challenges.

This chapter provides an overview of the Lao People’s Democratic Republic’s (Lao PDR) framework for the entry and regulation of investment and reviews existing regulatory restrictions to foreign direct investment. It looks at key policy reforms covering foreign investment and benchmarks the remaining restrictions against those in other countries.

This chapter examines the current context of infrastructure development in the Lao People’s Democratic Republic (Lao PDR). It reviews connectivity challenges and recent reforms to boost infrastructure investment, including private participation in infrastructure, and the remaining obstacles to improving the legal and institutional framework for private investment in infrastructure.

The Government of the Lao People’s Democratic Republic (Lao PDR) can take justifiable pride in its accomplishments over the past three decades. Substantial economic reforms have led to high and sustained growth rates and rising overall living standards, although more still needs to be done to reduce poverty. The government aspires to graduate from least developed country status by 2020 – a significant ambition achieved by few countries. Foreign direct investment has played a key role in supporting economic development but domestic investment has also been strong. The government is engaged in a number of ambitious reforms to improve the business environment and further reap the benefits of investment, increasingly focusing on attracting responsible and sustainable investments. The newlyamended Law on Investment Promotion, which was being revised during the process of this Review, takes on board a number of OECD recommendations and is intended to be an important step forward.

This first OECD Investment Policy Review of the Lao People’s Democratic Republic (Lao PDR) uses the OECD Policy Framework for Investment to present an assessment of the investment climate in Lao PDR and to discuss the challenges and opportunities faced by the Government of Lao PDR in its reform efforts. It includes chapters on trends in foreign investment and trade, the legal framework for investment, regulatory restrictions on foreign investment, corporate governance, investment promotion and facilitation, promoting and enabling responsible business conduct, infrastructure connectivity and the investment framework for green growth.

This chapter provides an assessment of the investment promotion and facilitation framework in the Lao People’s Democratic Republic (Lao PDR). It examines existing strategies and institutions governing investment promotion and facilitation with a particular focus on the Investment Promotion Department. It highlights key reforms and remaining challenges to improve the business environment and attract foreign investment to diversify the economy, including in special economic zones. It also provides recommendations on the investment incentives regime as well as on measures to encourage business linkages with small and medium-sized enterprises and other policies to maximise investment spillovers.

The development of the Lao People’s Democratic Republic (Lao PDR) has been a success by many measures over the past two decades. For a sparsely populated and land-locked country that has had to overcome the devastating effects of years of war and civil strife, it has managed to sustain high and relatively stable growth for over two decades. Living standards have improved to the point where Lao PDR has become a lower middle income economy and could graduate from least developed country status by 2020. Foreign direct investment has played a key role in supporting this growth, although domestic investment is also booming. The country is becoming more integrated both regionally and globally, joining ASEAN in 1997 and the WTO in 2013.

The development of the Lao People’s Democratic Republic (Lao PDR) has been a success by many measures over the past two decades. For a sparsely populated and land-locked country that has had to overcome the devastating effects of years of war and civil strife, it has managed to sustain high and relatively stable growth for over two decades. Living standards have improved to the point where Lao PDR has become a lower middle income economy and could graduate from least developed country status by 2020. Foreign direct investment has played a key role in supporting this growth, although domestic investment is also booming. The country is becoming more integrated both regionally and globally, joining the Association of Southeast Asian Nations (ASEAN) in 1997 and the World Trade Organization (WTO) in 2013.

This chapter provides an overview corporate governance framework in the Lao People’s Democratic Republic (Lao PDR). It addresses ongoing reforms to the ownership and governance of state-owned enterprises and challenges in expanding the capital market.

This chapter provides an overview of Lao PDR's legal framework for investment. It examines the law-making process as well as the quality of the country’s investment policies and the level of legal protection granted to both domestic and international investors. Particular attention is given to the Law on Investment Promotion and recommendations and its recent amendment. The chapter also looks into the rules for expropriation, the framework for protecting intellectual property rights and the legal regime for land property rights. The adjudication of commercial and investment disputes, including through arbitration, and Lao PDR’s investment treaty practice, including its relation to ASEAN practice, are also addressed.

While the Emerging Asian region has positioned itself well to weather short-term economic volatility, it is imperative to ensure that the new growth and development strategies of countries in the region do lead to sustainable growth over the longer term. To this end, there must be structural policy reforms to ensure sustained and robust productivity growth, the cornerstone of every nation’s economic growth and competitiveness. The reforms should also target upgrading of economic activities to ensure that the region’s economies can remain competitive participants in global value chains in the face of changing domestic and external conditions.

This chapter considers how and if economic reform in Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) has reduced poverty and income inequality. It opens with a brief introductory section that puts CLMV in a regional context and outlines the themes the chapter addresses. The section on the CLMV experience of poverty and inequality – country by country – examines each country in turn, sketching its history from independence, its experience of war, and its transition from a centrally planned people’s democracy to a market economy in the 1980s and 1990s. In this respect, Myanmar is an exception as it is only now ushering in its first tentative reforms. Cambodia, Lao PDR and Viet Nam, however, have effectively rebuilt and reaped the benefits. Their export-driven economic growth has been strong. Cambodia and Viet Nam have diversified their economies away from agriculture and both are currently fostering eco-tourism and new green industries. All three have reduced poverty – Viet Nam by half. Income disparities, however, persist between men and women, urban areas and rural regions, and ethnic groups. Inequality has actually widened in Lao PDR. CLMV have much to do to ensure development is inclusive and sustainable: further build infrastructure and institutional capacity, widen equitable access to education and employment, make the business environment investor-friendly, invest in human capital, nurture small and medium-sized enterprises, weed out corruption. The section on CLMV countries briefly compares the four countries and their performance in reducing poverty and inequality. Myanmar is a constant exception, principally because so little data are available. However, the final section “Conclusion”, also applies to Myanmar: economic growth does not of itself deliver equally shared benefits for all.