VIENTIANE • Japan and Laos have agreed on a joint plan to spur development in the landlocked Southeast Asian country during a meeting between their leaders.

At their meeting held on the sidelines of the Asean summits here this week, Japanese Prime Minister Shinzo Abe and his Lao counterpart, Prime Minister Thongloun Sisoulith, affirmed Japan's commitment to work with Laos to build links with neighbouring countries, diversify the Lao economy and bridge urban-rural gaps, the Kyodo news agency reported.

Under the plan, aimed at lifting Laos out of the United Nations' category of least developed countries by 2020, Japan will cooperate with Laos in building road and bridge infrastructure, developing public transport for the capital, Vientiane, and continuing joint work on developing its international airport.

The plan also provides for enhancing education and job training, promoting public-private dialogue and funding small and medium-sized enterprises, among other things.

A Japanese official who briefed reporters said Mr Sisoulith told Mr Abe that Laos is carrying out legal reform to encourage more Japanese companies to invest directly in Laos, saying Japanese investment will in turn invite investment from other countries, Kyodo said.

Also at Tuesday's meeting, Japan committed itself to providing a non- project grant of about 500 million yen (S$6.6 million) for activities to be implemented this year, according to Vientiane Times.

Japan tops the list of foreign countries providing Official Development Assistance to Laos, offering about US$100 million (S$134.7 million) annually, the report added.

Japan is vying with China, which has also committed itself to a large number of investments in Laos, for influence not just in the region but also in Africa, said Kyodo.