Since its foundation in 1967, the Association of Southeast Asian Nations (ASEAN) has made extraordinary progress. It has been transformed into an increasingly well-regulated, dynamic and the world’s fastest-developing economic region. Its member states grew from six to 10 and today include Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
As identified by ASEAN leaders, 2015 is a key milestone on the ASEAN integration agenda. On Dec. 31, ASEAN became the official ASEAN Economic Community (AEC). Now the AEC is the third-largest market — behind only China and India — in the world with a population of 622 million. In terms of economy, the AEC is a highly competitive economic region with a combined GDP of $2.6 trillion, the seventh-largest economy in the world and the third largest in Asia. ASEAN is a world-class investment destination that attracted foreign direct investment of $136 billion in 2014. In terms of connectivity, ASEAN is a well-connected community with tourist arrivals of 105 million in 2014. ASEAN has become a unique example of 10 diverse nations that have come together under the AEC and the Lao PDR is proud to be a part of this community of nations.
Since its accession to ASEAN on July 23, 1997, Lao PDR has actively participated in the ASEAN community building process. While resuming the ASEAN chairmanship this year, Lao PDR stands ready to move forward a resilient community consisting of three pillars: the ASEAN Political-Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community. The Lao chairmanship is expected to be important and meaningful as it is the first year of the implementation of the ASEAN Community Vision 2025 and its blueprints for the three community pillars.
The overall vision articulated in the AEC Blueprint 2015 remains relevant as the AEC Blueprint 2025 is built on the 2015 version and contains five interrelated and mutually reinforcing characteristics. These are a highly integrated and cohesive economy; a competitive, innovative and dynamic ASEAN; an enhanced connectivity and sectoral cooperation; a resilient, inclusive, people-oriented and people-centered ASEAN; and a global ASEAN. The immediate priority is to complete the implementation of measures unfinished under the AEC Blueprint 2015 by the end of 2016. The continuing commitments of Cambodia, Laos, Myanmar and Vietnam under the AEC Blueprint 2015 up to 2018 are also incorporated into the AEC Blueprint 2025.
In future efforts, ASEAN will also provide a new emphasis on the development and promotion of micro, small and medium enterprises in its economic integration efforts. At the same time, ASEAN will likewise embrace the evolving digital technology as leverage to enhance trade and investment, provide an e-based business platform, promote good governance, and facilitate the use of green technology.
For the ASEAN chairmanship in 2016, Lao PDR has introduced the theme of “Turning Vision into Reality for a Dynamic ASEAN Community,” with the aim of maintaining and promoting a peaceful, stable and outward-looking ASEAN region, with a highly integrated and cohesive regional economy, enhanced connectivity and strengthened efforts in narrowing the development gap. For this purpose, Laos has identified possible priorities under its chairmanship focusing on the four areas of small and medium enterprises, tourism, connectivity and trade facilitation.
The establishment of the AEC provides both opportunities and challenges to the Lao PDR. In order to reap benefits and respond effectively to the challenges of joining the AEC, Laos has focused on addressing some priority issues such as promoting awareness and understanding of the Lao public on the AEC; establishing mechanisms and improving coordination systems between line ministries and local authorities; conducting studies on production projects; listing of products and services in line with the Lao PDR’s potentials and improving quality of products to be able to compete in the ASEAN market. Additionally, focus has been on improving laws and regulations related to the establishment and operation of business in order to enable the business sector to continuously improve the capacity and increase their competitiveness, as well as on human resource development and capacity building in line ministries and local authorities involved in the global economic integration process.
As far as the Lao PDR is concerned, the government has set up its development strategy based on the potentials that are available in the country such as rich land and plenty of water. The land is suitable for growing rice and many kinds of vegetables and is a foundation of the country’s food security. The abundance of water is suitable for agriculture and hydroelectric plants to generate electricity for domestic consumption, as well as for export.
In addition, the Lao government has turned the challenges of being landlocked into opportunities by being “land-linked” through transport infrastructure improvements such as upgrading its roads from north to south and east to west into ASEAN highway routes and its airports into ASEAN hubs, serving ASEAN connectivity in the region. Furthermore, in order to realize the Kunming-Singapore Railway as part of the Trans-Asian Railway network, a groundbreaking ceremony to begin construction of a 418-km high-speed railway linking Vientiane, the capital of Laos to Kunming in China’s Yunnan province took place in Vientiane near end of last year. The train line is expected to begin operations by 2020.
To lay down a foundation for transforming the country into an industrialized nation, the Lao government has established 11 special economic zones (SEZs) throughout the country, including the Pakse-Japan SME Industrial Park, which provide a favorable climate and benefit for local and foreign businesses. At present there are 258 companies and 225 shops registered to invest in the SEZs, with 44 percent from the service sector, 31 percent from the industrial sector and 26 percent from the trade sector.
The Lao government has attached great importance to Japanese investment. I would like to take this opportunity to invite Japanese investors and businesspeople to invest in Laos’ SEZs, particularly in the Pakse-Japan SME SEZ, purpose-built for Japanese small and medium enterprise investment.