LAO Prime Minister ThonglounSisoulith has called on senior government officials in charge of economic affairs to explore ways to ensure that all revenue streams are fully utilised and to spur economic growth.
The premier made the statement at a meeting held to disseminate and encourage the implementation of the resolution agreed at the 7th Plenary Session of the Central Committee of the Lao People’s Revolutionary Party.
The resolution aims to strengthen responsibility in addressing financial and economic difficulties and enhancing macro management.
The central committee noted that the economy has encountered difficulties largely driven by budget tensions caused by a chronic budget deficit resulting from a high level of public debt.
Thongloun asked those in attendance at the meeting to suggest ways to prevent revenue from leaking.
“Have we been looking in the right direction in closing loopholes that enable revenue leaks? Have we employed effective measures and exerted every effort over the past two years?” the prime minister asked, urging meeting participants to discuss the matter and come up with answers.
“What can be done to shrink the loopholes?” he continued.
Representatives from the ministries of Planning and Investment, Finance, and Natural Resources and Environment, the Bank of the Lao PDR, National Economic Research Institute and others attended the two-day meeting between January 17 and 18.
In its resolution, the central committee agreed that the government should continue the introduction of electronic systems to plug loopholes and increase the amount of revenue collected.
Although a number of measures have been imposed to maximise revenue collection, the prime minister suggested the meeting explore additional measures to supplement them and fulfil the resolution.
In addition, the resolution stipulated that new state investment must focus only on projects that are cost-effective, to ensure the most economical use of the budget.
The central committee agreed to repay public debt in line with the plan and pledged to review the investment costs of state projects carried out by private companies to ensure the costs were reasonable, before repaying the debt.
“We need to look at whether the amount invested was reasonable and whether the construction standards were applied correctly and if the projects will be effectively utilised,” the prime minister said.
He called for the meeting to brainstorm ways to address the large amount of public debt that has accumulated over the years due to a budget deficit.
“What additional measures should be tougher?” Thongloun asked, adding that the state investment plan must be drawn up to match the available budget.
The prime minister asked those present to share their views on ways to improve the business environment, saying that Laos’ global ease-of-doing-business (EDB) ranking had deteriorated in recent years.
The World Bank’s EDB index suggests that Laos has dropped for three consecutive years from 139th place to 141st and is currently 154th among 190 economies worldwide.
Laos has deteriorated in the ranking despite the government’s efforts to improve the business climate and passing legislation to support this effort.
Bank executives were asked to discuss measures to better enable and facilitate businesses to access low-interest bank loans, while reducing the amount of non-performing loans.
Thongloun underlined the need to replenish foreign currency reserves after learning they were quite low.
Meeting participants were also asked to explore ways to better promote small and medium enterprises and tourism. It is believed that more tourist arrivals would boost the economy, which is currently heavily dependent on natural resource exploitation.
Participants also learned about the central committee’s resolution on the improvement and strengthening of political foundations at the grass-roots level. It was agreed they would also discuss ways to fulfil the two resolutions. VIENTIANE TIMES/ASIA NEWS NETWORK