President of the LNCCI Sisavath Thiravong told the meeting, which was chaired by Prime Minister Thongsing Thammavong, that modernising industry and production in some provinces faces difficulties due to the insufficient professional knowledge of business operators coupled with unfavourable circumstances in the provinces.
He explained that while agricultural production in northern provinces is heavily reliant on border trade, producers of farm products suffer from quota restrictions on certain items imposed by neighbouring countries.
In addition, some local authorities permit traders from neighbouring countries to buy local farm products and non-timber forest products.
Such issues have created difficulties for Lao enterprises producing farm products, Mr Sisavath said. He said the LNCCI called for a study on the issues in a move to seek a possible solution.
The LNCCI president stressed the need to improve the investment friendly environment, saying that the country's ranking for doing business remains low. In 2014, the World Bank's doing business ranking put Laos at 159 out of 184 countries listed.
There is also a need, he suggested, for greater promotion of local small and medium enterprises, notably the promotion of collective SMEs and associations to strengthen their production capacity.
Insufficient workers, notably skilled labourers, have hindered the expansion of the processing industry, which requires large numbers of workers.
This issue, Mr Sisavath said, “has caused many foreign firms to suspend a planned investment in Laos.”
In addition, production costs of goods manufactured in landlocked Laos remain high, largely caused by higher transport costs, resulting in local producers struggling to compete with rivals from other countries.
“Goods manufactured in Laos are unable to compete with the same goods manufactured in other Asean member countries, even other countries (outside Asean),” he told the meeting.
The LNCCI president also stressed the need to invest more on human resource development to fulfil the growing demand for qualified human resources driven by growth in investment and development.
He suggested that Laos is almost the last among the 10 Asean member countries in terms of spending allocated to human resource development.
“Laos is also almost the last among 184 countries around the globe in terms of spending allocated to human resource development,” he added, citing an international survey.
“If we don't maintain a continuous effort to address this (inappropriate spending on human resource development), it will be a problem for our socio-economic development,” he said.
Information Source: Vientiane Times Newspaper
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