Top Story of the Week: Laos raises bar for foreign ownership
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Leaders from the Lao People's Revolutionary Party and the government yesterday visited the Lao People's Army's Chor-11 battalion in Vientiane province to mark the 63rd anniversary of the founding of the army.
The delegation was led by Politburo member and Vice President of Laos Bounnhang Vorachit, Politburo member and National Assembly President Ms Pany Yathortou, and former Politburo members General Sisavath Keobounphanh, and Lieutenant General Samane Vinhaket.
E-disbursement and e-signature systems are being put in place with the assistance of the World Bank to help the Ministry of Finance to spend aid money more efficiently.
The new systems will make spending more accountable and help finance officials to manage funding more professionally. This will make World Bank grants and loans easier to obtain, as Bank staff will have ready access to the country’s portfolio and be able to assess the situation a lot faster. Deputy Finance Minister Mr Santhiphab Phomvihane briefed ministry officials last week on the introduction of the e-disbursement and e-signature technologies, and the opportunities and potentials they offer.
The Bank of the Lao PDR has enough foreign reserves to keep currency exchange rates stable despite increased foreign ownership of shares in EDL-Gen, a top stock market official says.
Lao Securities Exchange Chairman and CEO Mr Dethphouvang Mounlarat made the comment last week in response to public concerns that increased foreign ownership of EDL-Gen stock would make it difficult for the central bank to stabilise currency exchange rates. The central bank must ensure it has a sufficient supply of foreign currency so that foreigners who sell their stock can convert their kip earnings into foreign currencies to take out of the country.Bank to issue 63 billion kip in loans to Xekong farmers, Lao Voices, Jan. 20
The Agriculture Promotion Bank’s (APB) Xekong provincial branch will this year release credit totalling more than 63 billion kip to enable local people to grow crops on a commercial basis.
Branch Head Mr Vedsouvanh Souliyaki said the bank recently agreed to the loan amount in order to boost crop production across the province. Mr Vedsouvanh said APB will issue both short and long term loans. “We will release 34 billion kip for short term loans and 29 billion kip for long term loans.”
The United Nations Development Programme will provide US$3.53 million over the next five years to support the Ministry of Planning and Investment to implement the 7th National Socio-economic Development Plan (NSEDP 2011-2015).
The 7th NSEDP aims towards inclusive and equitable growth, achieving the Millennium Development Goals (MDGs) and substantial progress towards graduation from Least Developed Country (LDC) status.
Representatives from the Ministry of Planning and Investment and other relevant sectors and organisations gathered in Vientiane yesterday to discuss the progress, issues and challenges of implementing key programmes in various areas over the past year.
Electronic systems will be used to streamline operations in special and specific economic zones (SEZs) in Laos, to ensure transparent and accountable management.
The TK Support Company has been given permission by the government to develop an electronic programme for use in these zones to facilitate business activities. The agreement was signed in Vientiane this week at a ceremony attended by Deputy Prime Minister Somsavat Lengsavad and other government officials.
A section of Road No. 13 north that runs through Vientiane province will soon be upgraded with funding of US$3 million from the World Bank.
The arterial road runs through the province over a distance of 202km, of which a 132km section will be repaired. Director of the province's Public Works and Transport Department Mr Theankham Thongbon told Vientiane Times yesterday the road improvement project is currently in the bidding stage.
Laos has seen a remarkable increase in the export of non resource products, giving a positive signal that the country is on track for sustainable economic growth.
According to the World Bank's Lao PDR Economic Monitor December 2011 Update, the export value of non resource products such as garments, wood and timber products, and agriculture and agro-processing sectors reached US$820 million in 2011, a 21 percent increase over the previous year.
Laos and development partners mobilised US$630 million to support the National Socio-economic Development Plan (NSEDP) last year, helping the country progress towards its Millennium Development Goals (MDGs).
The announcement was made to about 30 participants from ministries and the United Nations Development Programme (UNDP) during the Retreat on the Round Table Process, held in Vientiane on January 12.
Viet Nam and Laos will focus on trade and economic co-operation to reach the target of US$1 billion in trade turnover this year and double it by 2015.
Deputy Prime Minister Nguyen Xuan Phuc made the statement yesterday in Vientiane while meeting with Lao Prime Minister Thongsing Thammavong, noting that trade turnover between the two countries had increased rapidly in the recent past, as evidenced by $636 million in the first 11 months of 2011 – a 48 per cent increase over the same period in 2010.
The Deputy PM added that bilateral ties between the two countries in 2011 had deepened into more effective and practical sectors. New models in trade and investment had been used with the active operation of many large-scale and prestigious Vietnamese enterprises in Laos.
CIMB Group Holdings Bhd will be seeking an operating licence in Laos this year, a move that could well be the final piece in its Asean jigsaw.
Yesterday’s announcement by group chief executive Datuk Seri Nazir Razak came a day after Business Times reported the
bank’s plan to operate in the Philippines.
CIMB is Malaysia’s second largest banking group and it is aiming to be the top three in Asean by 2015. Of the 10 Asean economies, CIMB is currently absent only in the Philippines and Laos.
Laos will double the proportion that foreigners can own in publicly-traded companies to meet rising demand from overseas investors, a regulator said.
Overseas investors will be allowed to hold a 20 per cent stake in listed companies, up from 10 per cent, Saysamone Chanthachak, deputy secretary-general of the Securities & Exchange Commission, said by phone from Vientiane yesterday. The new limit will take effect January 16, she said.
The Lao government didn't just have an eye on business profit, it also wanted to create a new tool to mobilise investment capital by opening the securities exchange, said a top stock market official.
Lao Securities Exchange Chairman and CEO Dethphouvang Moularat made the comment on Monday in response to public concerns about whether setting up the stock market had been a worthwhile investment. Only two companies have listed on the market and the trading value is very low. The stock market's main income comes from the provision of transaction services for stock traders and the lease of offices. The low trading value has caused the public to wonder whether the several million dollars that went into the venture have been well spent.Govt relaxes foreign share ownership restriction, Lao Voices, Jan. 10 The government has opened up opportunities for foreigners to buy shares in a bid to boost investment in the Lao stock market.
Lao Securities Exchange Chairman and CEO Mr Dethphouvang Moularat said yesterday the government had given the green light for foreigners to own 20 percent of the total shares listed in the stock market. “Lao Securities and Exchange Commission Chairman Mr Somsavat Lengsavad has signed an agreement to allow total foreign ownership of 20 percent of shares listed on the stock market,” he said at a press conference to mark the first anniversary of trading on the Lao market.
Food & AgricultureVice Premier calls for establishment of specific agriculture areas, Lao Voices, Jan. 18 Deputy Prime Minister Somsavat Lengsavad has urged officials of Ministry of Agriculture and Forestry by focusing on establishment of specific agriculture produce areas and modernization.
The path will ensure the achievement of poverty reduction in basically and the UN Millennium Goals and lifting the country out of rank of least developed country and GDP grow by not less than 8%, Mr Somsavat advised at a meeting of Ministry of Agriculture and Forestry held yesterday. Mr Somsavat who is also in charge of national economy, added that over the past 36 years, we could not establish the specific agriculture development areas. Therefore the ministry has been urged to pay actively in the establishment of specific agriculture development areas.Tobacco promo ban to be enforced, Lao Voices, Jan. 14
Although the ban on advertising tobacco products has been in place for two years, tobacco companies continue to sidestep the law by distributing umbrellas to convenience stores, overtly advertising their brand.
The government has targeted a reduction in smoking and smoking related illnesses by introducing tobacco control laws that prohibit all forms of promoting and advertising of tobacco products.Govt approves funding to power irrigation systems, Lao Voices, Jan. 11
The government has approved funding of 10 billion kip to help foot the electricity bill for dry season rice crops, to assist farmers struggling in the wake of last year’s floods.
Each dry season, farmers nationwide have to pay about 17 billion kip for the electricity needed to power irrigation pumps, so the government’s latest round of funding assistance will cover more than 50 percent of the cost, Irrigation Department Acting Director General Mr Douangxay Xinnachak told Vientiane Times on Monday. The funding will be provided to target irrigation stations in Vientiane, Borikhamxay, Khammuan, Savannakhet, Champassak and Saravan provinces, as well as in the capital, he said.
Laos' leading mobile operator Star Telecom said it posted a revenue of US$110 million last year, an increase of 80 per cent over 2010.
The company, a joint venture between Laos Asia Telecom and Viet Nam's Viettel Group, attracted 1.6 million new subscribers to its Unitel mobile network last year, up 42 per cent year on year. Star Telecom said it built additional 500 BTSs (Base Transceiver Stations) last year, bringing its total BTSs to 2,400, one of the largest mobile operators in Laos in term of BTSs.
PoliticsThailand-Lao open Chiang Mai-Luang Pabang bus route, MCOT, Jan. 19
A second class air-conditioned bus route opened Thursday from Chiang Mai to Luang Pabang as the 8th route linking Thailand with the Lao PDR.
The route opening ceremony was presided over at this northern province's 3rd Chiang Mai bus terminal (Arcade 2) by Silpachai Jarukasemratana, Transport Ministry's Deputy Permanent-Secretary acting as permanent-secretary. The journey takes 18 hours and the fare is Bt1,200. Once the fourth bridge across the Mekong River from Thailand, linking Chiang Khong with the Lao PDR's Huay Xai, is finished next year, first class air-conditioned buses will replace the second services with a fare of Bt1,500.
Asean experts are meeting in Vientiane this week to discuss pesticide use and creating internationally accepted solutions to regulate its use in member countries.
The Asean Expert Working Group is meeting as part of the Asia Forum on Maximum Residue Limits (MRLs) and Trade Facilitation, in conjunction with a meeting on the harmonisation of pesticide MRLs among Asean countries. The meeting also includes international and regional representatives, who aim to set standard measures and resolve some of the problems that Asian countries face with regard to pesticide use.PM urges crackdown on crime, Lao Voices, Jan. 10
Social problems are on the rise in Laos, mainly in the form of criminal activities like robberies, illegal trade, prostitution, corruption, and drug abuse and trafficking, according to Prime Minister Thongsing Thammavong.
Speaking at a meeting yesterday to discuss social problems prevalent in Vientiane, the PM called on the relevant sectors to actively combat negative phenomena in all forms and formulate approaches to ensure public security in the capital.Laos, Vietnam agree on further cooperation, Lao Voices, Jan. 9
Laos and Vietnam have agreed to further socio-economic, scientific and technological cooperation in 2012.
Laos-Vietnam Cooperation Commission Chairman Somsavat Lengsavad and Vietnam-Laos Cooperation Commission Chairman Nguyen Xuan Phuc jointly signed the cooperation document on Saturday at the conclusion of the 34th joint meeting of the commissions in Vientiane. Both sides agreed to focus on implementing the two countries’ trade development programme for the period 2008-2015, aiming for trade volume of US$1 billion this year.