Viet Nam has become the second largest investor in Laos with investments of US$5 billion, mainly in the agro-forestry sector.
The Centre for Sustainable Community Development and Southeast Asian Research Association of Viet Nam organised a workshop on responsible investment for Vietnamese companies operating in the field of agro-forestry in Laos in Ha Noi on Friday.
The workshop offered insights gleaned from two field studies in Laos in June last year and January this year.
Pham Van Dung, a member of the research team, said that besides the advantages in the business environment in Laos, Vietnamese investors entering the market are also facing many barriers. The first hurdle is the difficulty investors face in grasping information and policies, determining the environment and investment opportunities, value chains and markets, he said.
The implementation of laws and policies in practice has not helped clarify matters for long-term responsible investors.
“Therefore, responsible and sustainable investors have not been protected against short-term investors," Dung said.
According to survey results, language and culture is also another barrier for Vietnamese businesses investing in Laos. At the workshop, representatives of many Vietnamese companies investing in Laos admitted that not understanding Laos and its customs and taboos have reduced production efficiency, causing misunderstanding, troubles and unmerited losses.
The team has made recommendations for investors. Investors need to be aware of unplanned investments such as supporting infrastructure, contributing to local cultural and sporting events to gain community support. Particularly, investors should pay attention to study and respect customary land use rights of local communities.
From the results of the survey, the group also made recommendations for local authorities. Benefit sharing is emphasised, in which investors bring material, cultural and spiritual benefits in harmony with the community where they are investing, creating jobs, contributing to the income, improving infrastructure, contributing to local budgets and having environmental protection activities.
The researchers found that not only large enterprises can share benefits but small businesses can also share benefits within their resources. However, long-term investment orientation companies have a clearer, stable and more harmonious vision and strategy. – VNS