ABSTRACT
In the history of economic development, governments in most developing countries that have successfully industrialized their economy, have used industrial policy, in one or another way, to achieve their development goals and targets. Upon obtaining independence in 1975, the Government of Laos has pursued socio-economic development and industrialization through the National Socio-Economic Development Plan (NSEDP) which encompasses an industrial development plan. Lao industrial policy has been embedded in NSEDPs, which can be viewed as de facto industrial policy. This chapter examines industrial policy of the Lao Government in two respects. First, it discusses the historical development of industrial policy. Second, the study evaluates the contribution of industrial policy to economic development in three areas: trade liberalization, special economic zone development, and small and medium enterprise promotion. The evolution of industrial policy in Laos has gone through two phases, the centrally planned economy (1975–1985) and the transition to a market-oriented economy (1986–present). The case studies illustrate the importance of a sound industrial policy with well-coordinated policy components (trade, special economic zone development, enterprise development, foreign direct investment, etc.). More efforts are necessary to improve capacity building for government officials and thereby enhance effective policy implementation. formulating and implementing the so-called National Socio-Economic Development Plan.
