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

  • Cambodia armed with money laundering laws

    Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday. Comprising nine

  • Schools to be reopened in ‘three stages’

    With guidance from Prime Minister Hun Sen, the Ministry of Education, Youth and Sport, is in the process of reopening schools in three stages. But no timeline has been set, ministry spokesperson Ros Soveacha said on Thursday. Soveacha said the first stage will be to

  • Thai border crossings eased

    The Cambodian Embassy in Thailand said in an announcement on Wednesday that Thailand’s government has allowed certain passengers from several countries to enter its borders. The visitors must go back to their country immediately after their duties in Thailand are fulfilled, the embassy said.

  • Gov’t says tourism recovers slightly despite pandemic

    The Ministry of Tourism and the Phnom Penh municipal administration have recognised 33 tourism businesses in the capital which have consistently implemented safety measures for tourists and adhered to the code of conduct issued by the ministry. Recently, the ministry announced that tourism businesses had to

  • Mull ASEAN border opening, PM urges

    Prime Minister Hun Sen has requested that ASEAN launch a scenario for gradually reopening cross-border travel and trade between countries in the region. He said ASEAN has had more success combating Covid-19 compared to other regions. The prime minister’s request was made at the

  • Ministry reports 11 new Covid-19 cases, reiterates vigilance

    Minister of Health Mam Bun Heng has urged people to continue practising virus prevention techniques after 11 people tested positive for Covid-19 within two days after arriving in the Kingdom. Speaking on Sunday, Bun Heng stressed the importance of washing hands, wearing masks or scarves when

  • Koh Rong land ‘belongs to firm’

    Preah Sihanouk Provincial Administration spokesperson Kheang Phearum told The Post on Sunday that the 35ha being bulldozed by Royal Group Co Ltd in Koh Rong belongs to it after it was leased to it for 99 years by the government in 2008. Phearum said the land does

  • Nine on Indonesia flight Covid-19 positive

    The Ministry of Health on Saturday confirmed nine more imported cases of Covid-19. The nine ‒ eight Cambodians and one Indonesian, aged 22 to 26 ‒ arrived in Cambodia on Thursday via a direct flight from Indonesia and are receiving treatment at the Khmer-Soviet Friendship Hostipal in Phnom Penh.

  • Kingdom’s financial sector healthy

    Cambodia's financial sector remains on a sustainable growth path despite the Covid-19 pandemic squeezing crucial industries, National Bank of Cambodia (NBC) governor Chea Chanto said. Tourism, garments and footwear have borne the brunt of the Covid-19 impact, he said, whereas the financial and agriculture sectors

  • Vietnam told to remove border tents

    Kandal provincial governor Kong Sophoan has ordered local authorities to prohibit the construction of buildings in areas bordering Cambodia and to report any irregularities immediately. Recently, Vietnamese officials removed another seven tents from the border area with Cambodia. His remarks were made on Wednesday afternoon