With Laos posting economic growth of 6 to 8 percent in recent years, a growing number of Japanese companies have invested in the country as a “Plus-One” location to avert the risk of concentrating too much in neighboring Thailand and China.
Surging labor costs in China, especially in major cities, and the floods in 2011 and continuing political turmoil in Thailand have led to an increase in the number of Japanese investors in Laos to 60 last month from 27 in November 2009, according to Japanese data.
The latest investors include Nikon Corp. and Toyota Boshoku Corp., a group company of Toyota Motor Corp., both of which will be building parts in Laos for their production bases in Thailand.
To strengthen information gathering and assist Japanese investors and prospective investors in Laos, the Japan External Trade Organization will open an office in Vientiane next year.
JETRO said that while the timing of the opening is still under consultation with the Lao government, the body is poised to help expand trade and investment between Japan and Laos on the one hand and the Association of Southeast Asian Nations on the other as the 10-member bloc has been promoting integration to achieve what is to be called the ASEAN Economic Community in 2015.
“We believe the office will make it easier for Japanese companies to send missions to Laos and for us to assist Japanese infrastructure exports and help promote local industries such as silk weaving and wooden handicrafts,” said Seiya Sukegawa, senior coordinator for Southeast Asia in JETRO’s planning department.
In a push to expand economic ties between the two countries, Prime Minister Shinzo Abe and his Lao counterpart, Thongsing Thammavong, welcomed the planned launch of the JETRO office during a summit in Vientiane on Nov. 17.
Abe is expected to hold another meeting with Thongsing on the sidelines of a Japan-ASEAN summit that starts Friday in Tokyo.