ASEAN-JAPAN CENTRE RELEASES REPORT ON LAO PDR RECOMMENDED DEVELOPMENT PATH

“Global Value Chains in ASEAN: Lao People’s Democratic Republic” is available for download on AJC website. (Graphic: Business Wire)

KUALA LUMPUR, March 31 (Bernama) -- Lao PDR is a country rich in natural resources and associated with underdeveloped manufacturing, according to the Global Value Chains in ASEAN: Lao People’s Democratic Republic, released by the ASEAN-Japan Centre (AJC).

Based on the report, the country needs to acquire more technology and know-how in agriculture, manufacturing and services production by extending its engagement in global value chains (GVCs).

The report is also prepared in the context of celebrating the 65th anniversary of Japan-Laos diplomatic relations.

According to AJC in a statement, GVC participation is low as shown by the small share of foreign contents or foreign value added (FVA) in gross exports, which is only six per cent.

Domestic value added accounts for the balance of 94 per cent, because most value added products are resource-based (e.g., copper ores, electricity) and do not require inputs from foreign companies.

Lao PDR is categorised as a country with limited manufactured commodities. The manufacturing sector leads in GVC participation, though it is far smaller than that in other ASEAN countries.

It is followed by the extractive (agriculture and mining) sector, then the services sector. The low participation in GVCs implies that industrial development in the country has not reached the complicated technological production stage as in many advanced ASEAN member countries.

Thailand, China and Viet Nam are significant contributors to Lao FVA, while the European Union and Japan play smaller parts. These countries are also major contributors to Lao value added incorporated in other countries’ exports.

More details at https://www.asean.or.jp/en/centre-wide-info/gvc_database_paper5/

-- BERNAMA