Building Lao PDR’s Capacity to Develop Special Economic Zones (SEZ)

Since 2002, the Government of Lao PDR has embarked on an industrial strategy and policy to help narrow the gap and integrate its economy to the one of other ASEAN countries. Within this context, the Government of Lao PDR has undertaken great efforts to achieve the goal of putting off the least developed country status by 2020. The 6th National Social and Economic Development Plan, 2006-2010, and the Medium Term Strategy and Action Plan for Industrial Development of 2003, prepared by UNIDO support, recognize the private sector as the engine of growth for industrial development.

A sustainable capitalization through foreign and local investments is a backbone of the country’s industrial development . Based on the Laos Investment Law and Regulations, the Government has decided to establish Special Economic Zones (SEZs) in order to increasingly constitute a main vehicle in promoting foreign and local investments in the local industry.
 
The government recognizes that, by offering tax incentives and privileged trading terms for manufacturing-based exports, SEZs can indeed attract foreign investment, spur employment and boost the development of improved technologies and infrastructure. Experiences in Asia have shown that a well-designed and implemented SEZ can produce many desired benefits for the country’s general economic growth.

As a joint initiative, A Memorandum of Understanding (MoU) was signed by the Government of Lao PDR, UNIDO and the Asian Development Bank (ADB) in April 2008. The ADB Technical Assistance proposal was approved for implementation on 27 November 2008.