Ever since the surge in costs of productions in China, we have been seeing an increasing amount of merchandise with tags of Made in Vietnam, Bangladesh or Indonesia. Located in the central of Southeast Asia, and being the neighboring country of the aforementioned countries, why don’t we see Laos just as often?
A group of 22 students of Asian Business Studies (ABS) paid a visit to Vientiane, Laos on 1-4 November 2018, led by Prof. Andy Wong, Associate Dean (Undergraduate Studies) and Dr. Anson Au Yeung, ABS Programme Co-director of CUHK Business School, to discover more about rising opportunities in this less developed country in Asia.
Laos has been enjoying an annual GDP growth of around 7-8% in the past 10 years thanks to its ample natural resources and low-cost raw materials. However, due to geographic constraints, the logistics cost for export of goods is amongst the highest compared to neighboring countries and it remains as a major barrier to trade. It prevents overseas companies from setting up factories there and thus, the local workforce is less likely to benefit from knowledge transfer or technological advancement. It further forces the country to export raw materials at a low price as well.
To mitigate the obstacles, Laos aims to attract more Foreign Direct Investment (FDI) through the implementation of economic zones. The students had the pleasure to visit the Vientiane Industry and Trade area (VITA Park) Special Economic Zone to learn about how the government and developer do lead sourcing to attract businesses around the world setting up factories there by providing tax exemptions on some business operations and reductions in income tax. They also visited the Laos National Chamber of Commerce and Industry to discuss how the Chamber connects enterprises to the government on prioritising to address industry-specific concerns.
Panel discussion at Laos National Chamber of Commerce and Industry
Visit to VITA Park
Besides, the students were stunned by the digitalization in Laos. Being one of the biggest state-owned banks in Laos, Banque Pour Le Commerce Exterieur Lao Public has introduced online banking and e-payment application 2 years ago. The bank has successfully attained a penetration rate of 20% among its customer base.
Banque Pour Le Commerce Exterieur Lao Public (BCEL)
At Beerlao, the students were inspired by how the company turned the joint-venture with the global brewers and Carlsberg Breweries into a very localized and representative brand. It now becomes one of the most successful export products from Laos.
Visit to Beerlao and wine tasting enjoyment
With the Belt and Road initiatives and cross-border collaborations with Thailand, the students are thrilled to see the potential sustainable development of Laos that will speak so much more than the improvement on the economic terms.
By Yannie Yeung, Cohort 6 (Class of 2019)
Visit to Faculty of Economics and Business Management of National University of Laos for attending a lecture on “Macroeconomic of Laos”
Lesson on how COPE (Cooperative Orthotic and Prosthetic Enterprise) supports community access to physical rehabilitation services in Laos, where is still littered with a significant amount of unexploded ordnance after the Laotian Civil War ended in 1975