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

  • Body of woman killed in Bangkok returns

    The Cambodian embassy in Thailand is working to repatriate the body of a casino dealer who was shot dead in Bangkok on Monday night. Ministry of Foreign Affairs and International Cooperation spokesman Kuy Kuong told The Post on Wednesday that officials are preparing paperwork to

  • Chikungunya hits 15 provinces, says gov’t

    Ministry of Health spokeswoman Or Vandine said on Thursday that the chikungunya outbreak in the Kingdom has spread to 15 provinces. Some 1,700 people are now suspected to have the disease. Vandine urged people to prevent its further spread by eliminating shelters for the Aedes aegypti mosquitoes

  • Gov’t exempts visa A and B holders from Covid fees

    Airline passengers who are diplomats and officials of international organisations holding Type A and B visas for travel to Cambodia are exempted from paying Covid-19 testing fees, said the Ministry of Health in its latest adjustment of rules on Wednesday. Health Minister Mam Bun Heng

  • Bill covering dress code draws ire

    Ministry of Interior secretary of state Ouk Kim Lek responded on Tuesday to criticism concerning a draft law that would ban women from wearing overly revealing clothing, saying that input from all parties will be considered as the law moves through the promulgation process. Several

  • What’s the deal with Cambodia and China’s FTA?

    Cambodia’s Free Trade Agreement (FTA) with China kicks off a series of FTAs in future but for now, critics wonder what else the parties could bring to the table apart from what it already has to date By the end of this year, Cambodia

  • Cambodia, Vietnam exchange border maps amid criticism

    Cambodia and Vietnam formally exchanged border maps on Monday despite criticism from former members of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP) that the Kingdom is losing land in the deal. The two countries said agreement on the border is 84 per cent complete, leaving