With deals signed on 18 new projects in Laos worth a total of US$1.16 billion last week, Vietnam is stepping up its efforts to remain far and away the country's leading foreign investor.
Of all the projects announced at the Vietnam-Laos Investment Cooperation Conference in Vientiane September 9-10, six worth a total of $410 million have already received licenses from the Lao government. The conference was co-chaired by Prime Minister Nguyen Tan Dung and his Lao counterpart Thongsing Thammavong.
Bui Quang Vinh, Vietnam's Minister of Planning and Investment, said at the conference that Vietnamese investment in Laos was increasing.
In just the first eight months of this year, Vietnamese companies pledged a total investment of $469 million in Laos, higher than the full-year figure of 2010. The projects cover major industries like energy, minerals, telecommunications and banking.
In the past 20 years or so, Vietnamese companies have invested in 203 projects worth a total of over $3.3 billion, accounting for 25 percent of Laos' foreign direct investment, Vinh said.
According to Deputy Minister Dang Huy Dong, 79 Vietnamese companies are operating effectively in Laos.
Doan Nguyen Duc, chairman of Hoang Anh Gia Lai Group, which is investing over $1 billion in hydropower and rubber projects in Laos, said the country's major advantages for Vietnamese investors were its rich natural resources and the fact that many Laotians can speak Vietnamese.
He said the export of materials and equipment from Vietnam to the neighboring country was also easy and cheap.
Besides a $100-million hydropower plant and iron and copper mining projects in southern Laos, Hoang Anh Gia Lai also owns 15,000 hectares of rubber plantations in Laos and is developing a $20-million trade center project, complete with hotels and office buildings, in Vientiane.
"If Vietnamese investors don't act quickly, opportunities will be taken by China, Thailand and Russia," Duc said.
Nguyen Xuan Son, director general of PV Oil Corporation, said the Lao government was encouraging and facilitating investment in a stable way.
Son said PV Oil, a member of state-owned group PetroVietnam, bought all the shares of Shell's division in Laos in 2009. In April this year, the Vietnamese corporation officially founded its subsidiary there.
Another member of PetroVietnam, PetroVietnam Exploration Production Corporation, began two oil exploration projects in Laos in 2009.
Meanwhile, Duong Van Hoa, deputy director general of Vietnam National Coal and Mineral Industries Group, said he was currently focusing on a salt mine and two coal mines in Laos.
Vietnamese companies also see investment opportunities in tourism in Laos, where the natural beauty is perfect for eco-tourism and foreign tourists are on the increase, said Tran Hung Viet, general director of Saigontourist.
Viet said his company, a leading travel agency in Vietnam, will cooperate with companies in Laos to open tours between the two countries. He said the next step was to open a Saigontourist branch in Laos that would invest in restaurants and resorts.
The World Bank in May projected that growth in Laos will hit 8.6 percent this year, and then it will average 8 percent in years to come.
In its report last week, AFP said the expansion has largely come from the exploitation of natural resources in the rural-based society of about six million people. It also said Laos, which has been long reliant on foreign aid, is now receiving massive foreign investment, mostly from China, Vietnam and Thailand.
In fact, Vietnam was named the leading investor there in 2009 and 2010. However, currently both China and Thailand are improving their investments into the poor but fast-growing nation.
The second leading investor in Laos between 2000-2010, China, for example, announced in August that its government would be providing a $23.5 million loan to Laos and unveiled a $7-billion high-speed railway project. Laos ranked third among the countries receiving investments from China in the first five months of this year.
Other nations like the US are also looking to improve their investment in Laos.
AFP quoted Frances Zwenig, who led a formal delegation of the US-ASEAN Business Council to Laos last week, as saying that their companies have begun to notice Laos because its economic activity has picked up. The delegation included Coca-Cola, General Electric, Johnson & Johnson, and oil giants Chevron and ExxonMobil.
"America has a presence... but we want to expand our presence, obviously," Zwenig told the news agency.