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Foreign Direct Investment
Considerable institutional reform must take place in Laos before it will be a competitive destination for foreign investment in Southeast Asia. To a certain extent, a handful of recent large-scale investments in the hydroelectricity and mining sectors has enhanced the capacity of Laos to manage the interests of outside investors. Investment on a small or medium-scale basis, however, remains overwhelmingly discouraged by lengthy, non-transparent bureaucratic processes; inadequate human resources; a weak national infrastructure; a negligible domestic market; and an unreliable legal system. In short, there is little sense at this time that the possible rewards derived from investing in Laos, other than at the highest scale or in certain niche markets, can overcome the considerable risk.
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