Competition scenario in the
Lao PDR
CUTS-NERI
Advocacy and Capacity Building on
Competition Policy and Law in Asia
(7Up2 Project)
Alice Pham-Saykham Vodalet
Introduction
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Geographical location, population and other
geographical characteristics
Economic performance, structure and other
characteristics
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The launching of the New Economic Mechanism
(NEM) in 1986
GDP growth rate
Other economic indexes
Economic policies: Industrial policy, trade
policy, Privatisation policy, investment policy
Industrial policy
State-Owned Enterprises (SOEs) vs. private
sector development
 Small and Medium-sized Enterprises (SMEs)
development policy
 Encouragement of import-substitution
industries
 Implications for competition
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Trade policy
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Domestic trade liberalisation
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Decree 12 on “Promotion of goods and money circulation”
“One market, one price” principle
External trade policy
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Decree 18 on “State monopoly on strategic export and
import goods”
Tariff regimes after liberalisation
Laos’ integration into the regional and global markets
 Bearings on competition
Privatisation policy
Decree 17 of 1990 on the Conversion of
SOEs to Other forms of Ownership
 The “Disengagement plan”
 Current situation: by 2003 there are only
round 93 wholly SOEs (of which 32 are
considered strategic)
 Separate negotiation vs. competitive bidding
 Competition?
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Investment Policy
Foreign Investment Law of 1988 (amended in
1994)
 Domestic Investment Law of 1994
 Intended overhaul
 Implications on competition
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Importance of competition in the economic policy
regime
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The NEM
The 1991 Constitution of Lao PDR
Article 14. The state protects and expands all forms of state,
collective and individual ownership, as well as private
ownership of domestic capitalists and foreigners who make
investments in the Lao People’s Democratic Republic. The
state encourages all economic sectors to compete and
cooperate with one another in expanding their production and
business. All economic sectors are equal before the law.

The Business Law No. 03/NA dated 18 July 1994
“All types of operations conducted by enterprises in all
economic sectors are inter-related and competing on an equal
footing before the law.” (Art.5).
Market structure and competition
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Market structure and competition
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Manufacturing sectors
Services and Utilities
Restructuring trends
Barriers to competition
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Administrative and other policy-induced barriers
Barriers to competition by private anticompetitive
behaviours
Market structure and competition
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Monopolistic sectors:
Beer, insurance, domestic aviation, electricity, water,
etc
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Oligopolistic sectors:
Telecommunications, petroleum, international
aviation, banking, logging, cement
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Sectors with competitive market structure:
Textile and garment, tobacco, steel, pharmaceuticals,
etc.
Sectoral policies
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Electricity: EdL
Telecommunications: LTC, ETL, LAT, and Millicom
Banking: State-owned commercial banks and
foreign branches
Forestry: 03 SOEs and small sawmills
Pharmaceuticals: Class I, Class II, Class III
pharmacies
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Licensing
Pricing
Operational standards
Consumer Policy
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Laws and institutions
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No comprehensive legislation on consumer protection
The Prime Minister’s Decree on Goods Price Control (October 2001)
Issues related to standards, quality, testing and metrology
Food safety
The state of consumer welfare in Lao PDR in the framework of 08
fundamental rights:
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The right to satisfaction of basic needs
The right to safety
The right to be informed
The right to choose
The right to be heard
The right to redress
The right to consumer education
The right to a healthy environment
Anticompetitive practices
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Cartels
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Definition
Examples
In Lao PDR
Restrictive trade practices (RTPs)
Abuse of dominance
Unfair trade practices (UTPs)
Perspectives on competition policy
amongst stakeholders in the Lao PDR
Survey results presented by Dr. Saykham
Vodalet (NERI)
Competition Law
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The Prime Minister’s Decree on Trade
Competition 2004
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Objectives
Principles
Scope of application
The Trade Competition Commission
 Some critical views
The Way Forward
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Establishing the Trade Competition
Commission
Building capacity of national stakeholders to
effectively implement the Decree
A hybrid approach for both competition and
consumer protection