Vietnam and Laos agreed on jointly investing in the construction of the Vientiane-Vung Ang railway and energy projects alongside the border for electricity production to meet the high demand in Vietnam.
|Overview of the business forum.|
The information was revealed during a Vietnam-Laos business forum held on March 21 in Vientiane, which is part of the visit of Vietnam’s Minister of Planning and Investment Nguyen Chi Dung to the country from March 21-23.
According to Minister Dung, Vietnam-Laos investment cooperation has been progressing over the years.
As of present, Laos remains the largest recipient of Vietnam’s outbound investment capital from a total of 78 countries and territories, with 209 projects and a combined registered capital of US$5.1 billion.
In this regard, Vietnam is currently the third-largest foreign investor in Laos.
During the first two months of 2021, Vietnamese companies registered one new project and two additional funds with a combined capital of $64.3 million. Meanwhile, trade turnover between the two countries rose by 15.4% year-on-year during the period to $243.2 million.
Dung noted after a period of decline, Vietnam’s investment in Laos has been back on the upward trend with greater sustainability.
In 2021, Vietnam poured over US$118.3 million in Laos, up 33.3% year-on-year, for which several projects have proved successful and would be expanded in 2020 and subsequent years, Dung said.
Dung stressed projects of Vietnamese companies in Laos have contributed positively to the latter’s socio-economic development, which help create jobs for thousands of locals and generate a steady stream of revenue for the host country’s state budget.
The estimated tax and financial obligation from Vietnamese companies operating in fields of telecommunications, banking, rubber plantation, dairy production, in Laos in the past five were estimated at over $1 billion.
Meanwhile, Laos authorities have been actively resolving concerns from Vietnamese firms working in sectors such as mining, hydro plant, agriculture, and energy.
Dung expected the two countries to continue focusing on large-scale projects and expand cooperation to new strategic fields.
The Vietnamese minister called for Laos to maintain a stable macro-economic environment and a favorable business environment to support foreign companies staying long-term in the country.
“Special mechanisms are needed to serve as the leverage for bilateral economic cooperation, while incentives are required to mobilize resources from development partners for infrastructure projects jointly executed by the two countries,” he said.
Dung stressed the necessity for Laos to address current issues related to major projects and protect the lawful rights of investors to ensure the healthy development of the investment environment.
He expected the two countries to continue cooperating in multilateral frameworks such as ASEAN, WTO, or RCEP, which, in combination with Vietnam’s networks of vast free trade agreements, would help penetrate goods and products from Vietnam and Laos to major markets.
Laos Minister of Planning and Investment Khamjane Vongphosy during a previous meeting with the Vietnamese delegation highlighted the close cooperation between the two countries in the past years.
“The visit of Vietnam’s delegation to Laos has significant meaning and would strengthen the comprehensive and special friendship between Vietnam and Laos,” Vongphosy said.
During the forum, both sides witnessed the signing of key agreements, including the construction of the Vientiane-Vung Ang railway between Vietnam’s FLC Group and Petroleum Trading Lao Public worth an estimated $5 billion.
The project has a total length of 555 kilometers, including 452 kilometers in Laos and 103 kilometers in Vietnam.
An agreement on the development of energy projects alongside the Vietnam-Laos border with a total capacity of 2,500 MW between T&T Group and Phongsubthavy Group.
In 2022, Vietnam provided non-refundable aid of VND733 billion ($32 million) to Laos, which has been spent on ongoing projects.