The World Bank says Laos is now more attractive to investors due to new laws which make it easier to do business.
“Improvements to the financial sector's legal framework through recently passed laws on commercial banking are attracting new investors to the banking sector and extending financial services more widely,” World Bank Vice President Michael Klein said.
His statement was released yesterday after an earlier meeting with Planning and Investment Minister Soulivong Daravong, about improving the business environment in Laos .
Mr Klein said it would be easier for entrepreneurs to access investment loans if the Lao government continued to reform its financial institutions.
Regulations should be developed to give borrowers other ways of accessing loans if they could not pledge land or buildings as collateral, he said.
Mr Klein said the Lao government was making good progress, but there was still action needed to ensure policies, laws and regulations were geared towards promoting business opportunities.
He also said the government should focus on better management of natural resources, something which would have benefits for the whole community.
Mr Soulivong welcomed Mr Klein's comments, saying it was important for the government to continue improving this sector.
“The government is strongly committed to encouraging private enterprise because we can see the results in rising incomes and falling poverty rates,” he said.
The gross domestic product was 8 percent in 2007, up from 7.5 percent in 2006.
Mr Soulivong said it was necessary to continue reform in order to encourage greater investment.
Mr Klein said the government could help prioritise its reform agenda by encouraging more public-private dialogue.
While in Laos , Mr Klein met with government officials to discuss the World Bank's continued support for developing the natural resource financing sector and the potential privatisation of state-owned enterprises.
“Through our assistance, the World Bank Group plans to continue to support the government and private sector leaders in Laos so the country can realise its economic potential and goal of becoming a middle income country by 2020,” he said.
Mr Klein is also the International Finance Corporation's (IFC) chief economist.
The IFC is now exploring opportunities for investing in hydropower development, mining, and agribusiness in Laos as well as for providing advice and financing to help the government privatise some state-owned enterprises.
