Doing business in Lao PDR : constraints to productivity

• Economy and commerce

New available data suggests that the business environment in Lao Peoples Democratic Republic (PDR) is not improving, and may be deteriorating. The main constraints to doing business named by firms surveyed in the 2016 enterprise survey are the practices of the informal sector, with 40 percent of respondents identifying this as a major issue, followed by tax rates at 33 percent and transportation at 23 percent. Lao PDR has demonstrated impressive economic growth for the past decade, with gross domestic product (GDP) growth averaging 7 percent, largely concentrated in the natural resource sector. However, this has been accompanied by a less than proportionate decline in poverty and rising inequality. The main identified constraint to investment was the practice of firms in the informal sector, with 40 percent of respondents citing this issue as a serious problem. Coming in second was tax rates, cited as a constraint by 33 percent of firms. Large percentages of firms also mentioned that transportation, electricity, and inadequately educated workers were major problems. Large firms were more likely to consider workers education a problem, while transportation was proportionally a bigger issue for medium firms, as was tax rates for smaller firms. Regionally, firms in the north and south of the country were more likely to identify key issues as major problems than firms located in the central region or Vientiane.

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Doing business in Lao PDR : constraints to productivity

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Document type	Reports, journal articles, and research papers (including theses and dissertations)
Publication date	2018.0
Publisher	World Bank
Copyright	Yes
License	Creative Commons Attribution
Author (corporate)	World Bank
Language	English
Date modified	29 Nov 2019