Vietnam has become the largest foreign investor in Laos after taking over the top position from China and Thailand, according to a newsletter issued by the Ministry of Planning and Investment.
The newsletter, published by the Investment Promotion Department, shows Vietnamese firms invested in 252 projects in Laos worth about $2.77 billion from 2000 to 2010, putting Vietnam top in foreign investor rankings for the first time in a decade.
“The value of Vietnamese investment has exceeded that of China and Thailand since the end of last year. One of Vietnam’s major projects is the $1 billion golf course development in Vientiane,” Investment Department deputy director general Manothong Vongsay told Vientiane Times on Friday.
In recent years Vietnamese firms have also embarked on a number of mining and hydropower projects in Laos, causing investment by the country to increase rapidly.
The surge in investment follows on from an agreement between Laos and Vietnam to boost bilateral trade to $1 billion in 2010, to $2 billion by 2015, and to $5 billion by 2020.
Most of Laos’s exports to Vietnam are timber, mining products and electricity, while Vietnamese exports to Laos mainly comprise machinery and consumer goods.
According to the newsletter, Chinese firms have invested in 397 projects worth about $2.71 billion over the past decade, putting them in second place as investors. Thailand has invested in 276 projects worth $2.68 billion.
The fourth largest foreign investor in Laos is the Republic of Korea with projects worth $512 million, while the fifth largest foreign investor is France with projects worth $459 million.
Japan, India and Australia fill the sixth, seventh and eighth investor spots, while Norway and Malaysia are ninth and tenth respectively.
The top largest investment sector from 2000 to 2010 remained electricity with an investment value of $4.5 billion. In second place was mining with an investment value of $3.2 billion. Services, agriculture, and the industry and handicraft sector are the third, fourth and fifth largest foreign investment sectors.
According to statistics, investment in natural resources is still the most attractive sector for foreign investment, despite government efforts to boost investment in the non-resource sector with a view to sustainable economic growth.
The Lao government amended and promulgated the Foreign Investment Promotion Law in early 2010, aiming to attract foreign firms to the non-resource sector. The law offers a number of investment incentives including tax breaks and the right to own residential land in Laos.
The law also creates a one-stop service for foreign firms seeking investment permission in Laos and aims to accelerate investment proposal consideration.