| Author | Soutsaka Bounmanit |
| Call Number | AIT RSPR no. SM-01-102 |
| Subject(s) | Risk assessment--Laos--Finance
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| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration, School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-01-102 |
| Abstract | In today's competitive business environment, markets all over the world (including Lao) are opening up. New markets and opportunities also mean new and different risk elements to take into account in the day-to-day business decisions. Multinational Corporation (MNCs) invests huge amount of money to expand their operation worldwide and international banks lend money to various countries or companies in a country in order to increas.e market share and value to the shareholders. Before they invest or lend money, of course, they have to study the risk and economic pe1formance of the countries and screen out the countries that have excessive risks. Lao P.D.R. made important progress at economic reform through implementing its "New Economic Mechanism" in the first half of the 1990s, supported by a program under the Enhanced Structural Adjustment Facility of the IMF. Ambitious investment plans, particularly ilTigation projects to achieve rice self-sufficiency, were pushed through despite the regional crisis and without appropriate resource allocations. Recourse to central bank financing, given the high level of dollaiization, caused inflation to skyrocket to triple digits and the kip to depreciate sharply. In response to the crisis, in mid-1999, the authorities rolled out many measures aiming at stabilizing the economy. With these measures, exchange rate was under control, inflation fell sharply, from 86.46 percent at end-1999 to 9 percent in February 2001. Real GDP growth is estimated to have been about 5.7 percent in 2000, as stronger domestic demand from higher credit growth appears to have offset the drop-off in Foreign Direct Investment. The government regulations, policies and commitment to the IMF are favorable to the investors. Moreover, The 1994 Foreign Investment Law itself is an open and liberal one, generally friendly to foreign investors. However, the main problems for the Lao PDR is its solvency and liquidity, which are considered as critical factors in determining the country's financial and economic performance. This caused the perception on Lao economic performance of international leading economists, financiers to deteriorate and resulting in the relatively bad country risk ranking. This situation could partly be solved or remedied by following the recommendation mentioned in this research study |
| Year | 2001 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-01-102 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Chairperson(s) | Tang, John C.S.; |
| Examination Committee(s) | Brous tail, J. F.;Sunanta Siengthai; |
| Scholarship Donor(s) | Government of France; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2001 |