Logo of Phnom Penh Post newspaper Phnom Penh Post - Laos gov’t set to reduce economic overreliance on natural resources

Laos gov’t set to reduce economic overreliance on natural resources

Content image - Phnom Penh Post
The Lao government says it will reduce the nation’s overreliance on natural resources as it seeks to grow the economy. VIENTIANE TIMES/ANN

Laos gov’t set to reduce economic overreliance on natural resources

The Lao government has announced it will reduce the nation’s overreliance on natural resources as it seeks to grow the economy despite the recent slowdown.

Speaking at the National Assembly (NA) session recently, Prime Minister Thongloun Sisoulith said although the Lao economy is set to grow 6.5 per cent this year, it relies too much on the energy and mining sector.

In addition, external loans for infrastructure projects that will likely result in low economic returns will be limited.

The move should contribute to minimising the country’s debt distress. However, the government vowed to boost commercial productivity and promote processing industries.

Thongloun acknowledged that Laos has huge potential to develop and gain more benefits from the tourism industry and transit services, but the development of these sectors has not progressed as anticipated.

NA members have called for the government to address the problems of producers, farmers and entrepreneurs to boost the country’s exports and minimise imports.

NA member for Vientiane, Bounthong Phommachanh, told the NA’s ongoing session this week that farmers were abandoning their land due to the high cost of production and the government sectors needed to take into account policies and mechanisms to assist producers to overcome these challenges.

NA members also said all sectors need to have thorough plans to assist farmers with technical know-how, marketing and access to finance. Stronger cooperation is necessary between the Ministry of Industry and Commerce and the Ministry of Agriculture and Forestry to boost the export sector.

Member for Xieng Khuang province, Vilaysouk Phimmasone said many small- and medium-sized enterprises (SMEs) found it difficult to access finance while others are still charged high interest rates on loans.

Critics expressed concerns about further slow economic growth in the short-term if the government fails to boost the production sector.

The Lao economy is vulnerable to external impacts. The nation has suffered from a chronic budget deficit, rising debts, falling currency reserves and financial leaks. Although the government has imposed numerous measures to address these issues, the problems remain.

The government declared that it would impose stronger measures to address unlawful trade, corruption and illegal logging while concentrating on improving the investment climate to attract more private capital into the country.

At the moment, Lao economic growth relies too much on the excavation of natural resources, which is considered an unsustainable source for long-term growth.

According to the World Bank’s recent report, natural resource wealth is beneficial as it raises average incomes, but the benefits to the population and local communities, in particular, are not automatic and can only be achieved if appropriate policies are adopted.

Ensuring the population benefits from the exploitation of natural resources requires adequate institutional structures across the entire value chain. VIENTIANE TIMES/ASIA NEWS NETWORK

MOST VIEWED

  • US imposes sanctions on Oknha Pheap and Kun Kim

    The Ministry of Foreign Affairs and International Cooperation expressed strong dismay on Monday over the designation of Cambodian tycoon Oknha Try Pheap and General Kun Kim under the US’ Global Magnitsky Act. “It is very disturbing when the public figures of a country become the

  • Mother, daughter killed in hotel fire

    The bodies of a mother and daughter were found locked in an embrace after they were killed in a hotel fire in Phnom Penh at around 3:30am on Wednesday at the Phkar Chhouk Tep 2 Hotel and Restaurant in Phsar Doeum Kor commune, in the capital’

  • EBA withdrawal a destruction of EU achievements, PM says

    Prime Minister Hun Sen said the EU’s possible suspension of its Everything But Arms (EBA) agreement amounted to a destruction of its achievements in the Kingdom and the demise of the opposition group. Hun Sen made the remarks while addressing more than 6,700 students during

  • Rights Day forum denied in Sihanoukville

    The Preah Sihanouk provincial administration last Saturday denied the request of land communities for a public location in the province to celebrate International Human Rights Day 2019 as the administration had already held forums to discuss land issues. However, the land community representatives said they would

  • Kingdom calls on Japan to increase number of direct flights to Siem Reap, Phnom Penh

    Cambodia is requesting Japan to increase the number of direct flights from Japanese cities and provinces to Phnom Penh and Siem Reap, so as to contribute to increasing cooperation and tourist numbers between the two countries. During the opening ceremony of 3rd Japan Travel Fair

  • Sri Lanka’s LOLC Holdings plans to sell Cambodian unit

    LOLC Holdings Plc, Sri Lanka’s second-largest publicly traded company by revenue, plans to sell its 70 per cent stake in Prasac Microfinance Institution Ltd, which also counts Hong Kong’s Bank of East Asia Ltd. as a shareholder, LOLC deputy chairman Ishara Nanayakkara said. Nanayakkara