Mar 1, 2013

Laos - Laos Works to Adjust to Future ASEAN Economic Community

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Vientiane, Feb 26 (Prensa Latina) Two years before the establishment of the economic community of the Association of Southeast Asian Nations (ASEAN), Laos, the most vulnerable of its members, is working to adjust to the requirements of a future regional open market.

For one of the poorest countries in the world, it is a matter of reducing the gaps in development with the other ten members of the bloc, one of the most acute problems in the process of integration.

The countdown has just started and Lao has to comply with the strong commitment to reducing import tariffs, in addition to other similar obligations resulting from its recent incorporation into the World Trade Organization (WTO).

Government authorities and experts are working on how to participate actively in a market of 600 million consumers and, at the same time, meet the demands from six million Lao citizens without unbalancing the fragile domestic economy.

According to the Ministry of Industry and Commerce, until December 2012, the country had identified 7,252 import items with flexible tariffs, accounting for 79 percent of imports. The remaining 21 percent must enjoy similar conditions by 2015.

The same reductions must be applied to products from China, India, Japan, South Korea, Australia and New Zealand, as ASEAN partners, by 2020.

However, some products such as fuel are too sensitive to keep supplying stable revenues to the State, so the government seems to be inclined to ask for a postponement or to introduce domestic value-added taxes.

The Ministry of Industry and Commerce called on businesspeople to boost productivity and efficiency to face strong competition, particularly in such sectors as cement, steel, motorcycle assembly and plastic, in order to reduce costs.

Otherwise, Lao runs the risk to be excluded from business in the region after the customs barriers disappear in the ASEAN community, government officials said.



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