Industrial Clusters, Upgrading and Innovation in East Asia

Industrial Clusters, Upgrading and Innovation in East Asia

Edited by Akifumi Kuchiki and Masatsugu Tsuji

This lucid and informative book analyzes the problem of clusters in transition through studies of agglomerations at different stages of development in various East Asian countries.

Chapter 6: Case Study of Laos: Prospects for a Vientiane Special Economic Zone

Motoyoshi Suzuki

Subjects: asian studies, asian economics, asian urban and regional studies, development studies, development economics, economics and finance, asian economics, development economics, economics of innovation, industrial economics, regional economics, innovation and technology, economics of innovation, urban and regional studies, clusters, regional economics


Motoyoshi Suzuki 6.1 INTRODUCTION The landlocked country of Laos, located in Indochina, has a population of only 5.72 million people. However, approximately 400 000 Lao people are estimated to have migrated to work in Thailand, a country neighboring Laos. There are several reasons for this. First, the wage gap between Thailand and Laos has widened to more than three-fold. Second, job opportunities are extremely scarce in Laos. Third, demand for cheap labor by factories in Thailand is very strong owing to soaring production costs. As the population in Laos is for the moment estimated to grow by 2.3 percent per annum for the next decade, it is critically important to create jobs for the increasing labor force. The aim of this chapter is to propose the establishment of a Vientiane Special Economic Zone (SEZ) in Laos in order to solve to some extent the unemployment problem. As stated above, 400 000 Lao people are said to be working either illegally or legally in Thailand. If a Vientiane SEZ is established, it will be possible to call some of these people back to Laos by providing them with job opportunities. The second section overviews Lao industrial structure, and an analysis of FDI flows into Laos follows in the third section. The fourth section overviews present industrial parks in Laos. There are two industrial parks in Laos: Savan-Seno Special Economic Zone in Savannakhet Province and Vientiane Industrial Park in Vientiane Capital. Both of them are stagnant because of location disadvantages and inadequate...

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