Mr Lee Yi Shyan at the Laos Investment Seminar 2010, 25 June 2010

Opening Address by Mr Lee Yi Shyan Minister of State for Trade & Industry and Manpower at the Laos Investment Seminar 2010 on Friday, 25 Jun 2010 at 9:15am

Your Excellency Mr Somsavat Lengsavad, Standing Deputy Prime Minister, Lao People’s Democratic Republic

Distinguished Speakers,

Ladies and Gentlemen,

INTRODUCTION

It is my pleasure to join you at today’s “Laos Investment Seminar 2010”. Let me begin by extending a very warm welcome and appreciation to His Excellency Mr Somsavat Lengsavad, Standing Deputy Prime Minister, Lao People’s Democratic Republic, for taking the time to grace this seminar despite his busy schedule.

I recall that in 2008, in conjunction with Laos Prime Minister Bouasane Boupavanh’s state visit to Singapore, IE Singapore and Singapore Business Federation had co-organized a similar seminar to introduce Laos as a new frontier for business opportunities. Riding on the interests generated by that seminar, today’s event is timely to update our business people on the latest developments and investment climate in Laos. As the global economy begins to recover from the severe economic crisis of 2008-2009, many Singapore companies are also on the lookout for attractive investment propositions abroad. Judging by the good turnout at this today’s seminar, I am confident that our private sector is even more enthusiastic about investment opportunities in Laos.

LAOS’ ECONOMIC POTENTIAL

Increasingly, Laos is becoming an attractive investment destination in a wide range of sectors. This includes logistics, infrastructure, agriculture, hospitality, tourism and professional services, real estate and manufacturing. In 2009, Laos economy expanded by over 6%, registering one of the highest growth rates in South East Asia. Its strong economic performance is also reflected in the country’s improving investment climate, which attracted US$510 million in foreign direct investment (FDI) in 2008, almost 10-fold the amount in 2001.The robust growth in FDI is not only a testimony of the Laos’ pro-business attitude, but also a mark of confidence by international investors in Laos’ economic potential.

SINGAPORE’S ECONOMIC INTERESTS IN LAOS

Singapore companies’ interest in Laos is underpinned by the warm bilateral economic relations that both countries enjoy. This can be seen from the increase in bilateral trade activities and rising investments by Singapore companies in Laos. For the first four months of 2010, bilateral trade increased nearly 20% year-on-year, to reach S$15.8 million. Investments by Singapore companies in Laos from 2001 to 2009 reached some US$108 million, making Singapore Laos’ 10th largest foreign investor.

Our companies’ interests in Laos span various sectors, including the real state, manufacturing and hospitality sectors.

Some recent Singapore companies’ investments include Olam’s 625-ha coffee plantation in Savanakhet province and Crescendas Group’s re-development of Talat Sao, a morning market in Vientiane, into a modern day shopping complex. In 2006, Asia Pacific Breweries formed a joint venture with the Laos government and SBK Consultant Limited to establish a new greenfield brewery in Laos, known as Lao Asia Pacific Breweries Limited (LAPB).

IE Singapore and our trade associations have been actively assisting our companies to explore opportunities to grow their business in Laos. Just three months ago, IE Singapore, the Container Depot Association of Singapore (CDAS) and the Singapore Business Federation (SBF) jointly led a trade mission to Laos, which drew interests from 15 companies in various sectors. In particular, logistics was one sector that attracted follow-up business interest. There is good potential here as Laos continues to improve its land connectivity with neighboring countries to facilitate trade and travel.

As an emerging market close to home, Laos is also a potential investment destination for Singapore SMEs which are seeking opportunities to grow their external wings. To help our companies, including the SMEs, to internationalize, we have put in place various incentive and facilitation schemes. Companies could tap on IE Singapore’s Internationalization Capability Development Programme (iCDP) and SME Market Access Programme (SME MAP) as they consider expanding their operations into emerging markets like Laos.

CONCLUSION

The world economy has begun to show signs of turning around. The long-term economic outlook for Asia is bright. Against this sanguine backdrop, the private sectors in Singapore and Laos should seize the opportunities to forge a winning partnership for the future. Today's seminar is an excellent opportunity for both sides to work together, build networks and translate opportunities into action plans.

On this note, I would like to wish everyone a very engaging and fruitful seminar. Thank you.