IFC backs govt’s reforms to improve ease of doing business

VIENTIANE (Vientiane Times/ANN) - The International Finance Corporation (IFC), a member of the World Bank Group, is supporting the Lao government to improve the country’s investment climate.

The goal is to enable a business-friendly environment to attract private investments to Laos.

The Prime Minister issued Order No. 02 on the Improvement of Regulations and Coordination Mechanism of Doing Business in Laos with an eye to improving Laos’ position in the World Bank’s ease-of-doing-business rankings.

Currently, Laos ranks 141st among 190 nations across 10 indicators. In 2017, the country made the process of starting a business easier and faster by simplifying procedures for obtaining a licence and a registered company seal.

The IFC has complimented the government’s efforts to carry out the Prime Minister’s Order. In this connection, IFC can share positive reform experiences — at global and regional levels — and help government agencies to translate the order into an action plan in line with international best practices.

The Order, which became effective in February 2018, aims to mobilise and attract quality investments, bolster the competitive capacity of domestic businesses, and minimise constraints to make it easy to do business in Laos.

In addition, the focus is on transparency, simplifying procedures, and reducing the application time for investment licence and business registration. This is expected to inspire confidence among domestic and foreign investors.

To build a better understanding of methodologies and share reform experiences in other countries, the IFC and the Ministry of Planning and Investment held a workshop in Vientiane last Thursday that focused on two indicators in the ease-of-doing-business report – dealing with construction permits and getting an electricity supply.

Representatives from the Ministry of Public Works and Transport, Ministry of Energy and Mines, Vientiane Division of Public Works and Transport, Lao Water Supply Authority, and Electricite du Laos attended the workshop.

In his opening remarks, Deputy Minister of Planning and Investment, Dr Khamlien Pholsena, said “This workshop will prepare ministries to develop action plans and ensure the implementation of the reforms to achieve our targets by the end of next year.”

The Ministry of Planning and Investment would work with key line ministries and the private sector to realise the government’s objectives and improve the country’s ease-of-doing-business environment.

“We are keen to improve Laos’ position in the World Bank Group’s Doing Business ranking by next year,” he added.

The IFC’s Head of Office in Laos, Mr Phongsavanh Phomkong, described the government’s efforts to improve the business environment as commendable.

“Looking ahead, a strong, comprehensive, and effective coordination mechanism, which also includes the private sector, will demonstrate its steadfast commitment,” he said.

 “The IFC supports the government’s ongoing reforms to stimulate private sector growth — including small and medium enterprises — generate jobs, and subsequently drive the nation’s economy,” Mr Phongsavanh said.

Other recent reforms in Laos include improved access to credit information, reduction of corporate income tax, and allowing entrepreneurs to apply for tax registration at the time of incorporation.