LAOS, Nov 10 (Vientiane Times/ANN) - The government is optimistic that the economy will grow by 4-4.5 percent next year despite complex global changes and Laos’ financial difficulties.
To ease budgetary tensions, the government will focus on attracting private investment to boost economic growth and poverty reduction efforts.
Domestic and foreign investment currently represents more than 50 percent of the country’s entire investment over the past five years.
The government has announced that it will not only continue to improve the business climate but will also encourage private enterprises to take part in infrastructure development through build-operate-transfer (BOT) schemes and public-private partnerships.
Deputy Prime Minister and Minister of Planning and Investment, Dr Sonexay Siphandone, told the National Assembly recently that the government will continue to facilitate the construction of mega projects in an attempt to accelerate growth.
These include the Laos-China railway which is now more than 90 percent complete, and the Vientiane-Vangvieng Expressway which is scheduled to open for public use next month.
Other mega projects comprise the building of industrial parks and dry ports, and hydropower and mining projects, all of which will help drive economic growth.
Over the past five years, economic growth averaged 5.8 percent, less than the target of 7.2 percent approved by the National Assembly.
This year, the economy is projected to grow by 3.3 percent with GDP per capita of US$2,664 which is below the target of US$2,978 approved by the Assembly.
The global economic slowdown triggered by the Covid-19 pandemic has severely impacted economic growth. The protracted travel restrictions imposed to prevent the spread of the virus have exacerbated the country’s economic woes and rising debt burden, with widespread flooding causing additional problems.
“Growth tends to decrease every year and the quality of economic growth is not high. Growth is mainly driven by the resource sector, ” Dr Sonexay said.
He also stressed that commercial production for export had not progressed as anticipated. The fiscal deficit remains high, resulting in rising public debt and affecting socio-economic development.
Changes made so far have not been sufficiently effective to remove obstacles to investment and replace them with red carpets that would entice more foreign investment, he added.
One of the government’s main goals over the next five years is to pursue sustainable development by balancing economic development with environmental protection, using natural resources in an appropriate, sustainable and effective manner.
The government will also attempt to strengthen commercial production in association with the processing industry, as well as promoting services along railways and other economic corridors.
In addition, the government will roll out electronic systems for use in revenue collection and to ensure transparency and accountability in budget expenditure.
The government has also announced it will do more to control exchange rates and curb inflation. Foreign reserves should be sufficient to purchase imported goods for at least three months.
The government will re-inspect the implementation of various policies to facilitate the economic sector, particularly policies related to land rights and real estate.
Did you find this article insightful?
50% readers found this article insightful