Laos achieves remarkable progress in poverty reduction

April 4, 2013

Communist and Lao PDR flags waving along the banks of Mekong.

The number of poor families in Laos has dropped to 17 percent, it was revealed yesterday during a review of the implementation of the government’s 7th National Socio-Economic Development Plan.

The Ministry of Planning and Investment presented the mid term review of the 2011-15 socio-economic development plan to Laos’ development partners. One of the highlights was that in the first two and a half years of implementation, there has been a significant decline in the number of poor families.

Development partners, senior government officials and economists attended the half day presentation session. Planning Department Deputy Director General Ms Phonevanh Outhanvong and Asian Development Bank Country Deputy Director Mr Barend Frielink presided over the meeting.

According to the review, the government expects to lower the percentage of poor families even further to 15 percent by the end of this year and to 10 percent in 2015. In 2011, it was estimated that 19 percent of families in the country were poor.

The government has spent about 896 billion kip on its poverty reduction programme and plans to spend 7,387 billion kip from 2011 to 2015.

To achieve development targets, the government has built roads to the poorest districts to enable people in rural areas to transport their crops to markets in urban areas.

The government has also encouraged people to grow crops such as sweetcorn, coffee, cassava and sugarcane to generate more income.

Ms Phonevanh thanked the development partners, saying that without their support Laos would not have been able to achieve this measure of success.

“The government has faced several difficulties in implementing the 7th socio-economic development plan, including the global economic crisis and climate change. However, with our increased efforts and the assistance of our development partners, Laos has achieved a number of successes,” she said during a speech to open the meeting.

The presentation noted that Laos has been able to sustain economic growth of at least eight percent.

The growth rate was 8.1 percent in the fiscal year 2010-11 and 8.3 percent in 2011-12.

The main driving force of economic growth over the past two and a half years has been the industry and service sectors. Industry contributed 29.6 percent of total GDP in the 2011-12 fiscal year while the service

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Prof. Bosengkham Vongdara highlights Party’s achievements

April 4, 2013

Prof. Bosengkham Vongdara

Minister of Information, Culture and Tourism, Prof. Dr Bosengkham Vongdara highlights Party’s achievements, according to him, the tourism sector experienced rapid growth in 2012 thanks to the wise leadership of the Lao People’s Revolutionary Party.

Speaking at a lecture on Tuesday to mark the 58th anniversary of the Lao People’s Revolutionary Party, Prof. Dr Bosengkham, who is a member of the Party Central Committee, said that under the Party’s leadership, Lao people have gained access to global information sources. Ordinary people can watch a large number of foreign television channels including BBC and CNN. He said Laos enjoyed greater media freedom than many other countries, adding that in some countries it’s not possible to access as many international broadcasting channels.

One of the major achievements of the Party’s leadership in 2012 was the boom in tourism. Prof. Dr Bosengkham said tourist arrivals climbed to 3.3 million in 2012, generating income of about US$500 million. Political stability, improved transport and the country’s picturesque scenery make Laos an attractive tourist destination. Another significant aspect of the Party’s leadership is that Laos has been able to maintain political stability. This is essential for the government to develop the country and bring prosperity to its people, who are the owners of the country.

Laos has seen GDP growth of over 7.5 percent for the past 10 years thanks to the Party’s wise leadership. Strong and continuous economic growth has helped to free large numbers of people from poverty. At present, only 17 percent of households are categorised as poor.

Annual per capita income now stands at US$1,355, up from just US$114 in 1995 and US$534 in 2006. Laos is now on track to achieve the UN Millennium Development Goals in 2015.

The Lao People’s Revolutionary Party was established on March 22, 1955, in the former revolutionary stronghold of Huaphan in the northeast of Laos. The Party was formed to lead the Lao people in repelling the foreign aggressors. The Party played a significant role in leading its armed forces and civilians to liberate the country from foreign domination.

This enabled the Party to seize power from the royal government and establish the Lao People’s Democratic Republic on December 2, 1975. Many ministries and government bodies around the country held similar events to mark the Party’s founding.

Some 300 ministry officials, most of them Party members, attended the lecture to learn about the history and achievements of the Party from the time of its founding in 1955 until the present.

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Officials vow to make real progress towards MDGs

April 5, 2013

Lao and overseas officials have vowed to compile a report that reflects the true progress of Laos towards achieving the United Nations Millennium Development Goals (MDGs).

The officials made this commitment during a second workshop held yesterday in Vientiane to discuss the draft of the third report on the progress made towards the landmark development goals.

“I wish you well in generating a good report which reflects the reality of our situation, foresees and agrees on the challenges and figures, and how much achievement has been recorded so far,” Deputy Minister of Foreign Affairs Alounkeo Kittikhoun said in his opening remarks at the meeting.

Mr Alounkeo highlighted Laos’ achievements in striving for MDG No. 1 which concerns poverty reduction. He said the percentage of people living below the national poverty line has dropped from 48 percent in 1990 to 22 percent at present.

But despite this figure having been halved, the problem persists and there is no easy solution, he said. The same is true of malnutrition, which is a big challenge and is not just about health but involves awareness, healthy eating, breastfeeding, education and issues surrounding stunted growth.

He praised the cooperation between the Lao government, UN agencies and development partners who help to find solutions to ensure better coordination on nutrition. At the same time he called on line ministries and UN agencies to agree on figures during the workshop as a basis for continuing the good work towards realising the goals.

Regarding MDG No. 7 which relates to environmental sustainability, Mr Alounkeo said land use management had been effective in certain areas but not in others.

“We should not deny that mistakes have been made and we welcome all the comments of our friends, and on that basis we will always try to improve,” he added.

Mr Alounkeo also referred to Laos’ special goal – MDG No. 9 – the clearance of unexploded ordnance. UXO is a great obstacle to development efforts as all 17 provinces in the country are contaminated with these remnants of war.

UN Resident Coordinator Minh Pham said that, despite the brighter picture, progress had not essentially been made on the situation presented at the Round Table Implementation Meeting last November. However, some detailed and supportive indicators have changed and the availability of new data such as the labour force survey did not reveal differences with ongoing administrative data.

He noted that some of the new data from the survey confirms the continuing progress shown by the administrative data such as in education, while other data also showed that progress was not as much as had been assumed.

“Some data may also show that the disparity between different social economic groups could be greater than we have assumed. I would suggest that we welcome all new data even if these will conflict with previous assumptions,” Mr Pham said.

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Hard work reaps rewards for Phongsaly farmer

By Meuangkham Noradeth
March 30, 2013

Rearing pigs for sale brings in extra income for rural folk.

A Phongsaly farmer, Mr Seng Hadxeuy, aged 40, has found that hard work and a burning desire to improve his quality of life has lifted him out of poverty, after growing crops and raising animals for several years.

Mr Seng’s family, who live in Hadxeuy village, Khua district, have shown other villagers that their hard work has enabled them to improve their living conditions and put poverty behind them.

Mr Seng said that at one time his family barely had enough to live on but since they began labouring in their fields to grow rice and rear animals, their lot has vastly improved.

He also learnt that he could call on the government for help, and borrowed 100 million kip from the Agricultural Promotion Bank so that he could plant more rice and keep more pigs.

Mr Seng said that thanks to assistance from the bank and government officials, he is now rearing more pigs than ever before.

He bought 100 piglets from Oudomxay province and after six months was able to sell them for 1.9 million kip per pig, which brought him in more than 160 million kip that year.

His family also keeps chickens and they have a pond where they breed fish. He also grows rubber, teak and agarwood for sale, which brings in more than 20 million kip per year.

Mr Seng now earns about 200 million kip per year on average, and his family is a prime example of how individuals can rise above poverty.

With every member of the family working hard together, they are now reaping the rewards of their efforts and living a better life with each passing year.

He says that in the future he will rear more pigs and chickens and grow more tree species, which he will sell.

Mr Seng’s family is not only a prime example of how individuals can rise above poverty but also of how a neighbourhood can benefit from having a family of their caliber in its midst. Their efforts are helping Khua district as a whole to move closer to achieving the Millennium Development Goals by 2015 as targeted.

Khua district is located in a mountainous and remote area of Phongsaly province. It is not on the government’s list of the 46 poorest districts nationwide but is nevertheless home to a large number of poor families. This means assistance from the government, international organisations and other groups is critical to making a difference in the community.

People in the district mostly grow rice, rubber and cardamom and a variety of vegetables. But it’s difficult for them to expand their farmland because they are surrounded by mountains.

Khua district is home to 5,618 families. At present about 3,496 of those families are living in poverty, and district officials are not sure they will be able to declare basic poverty alleviation by 2015, and have asked for more funding to be made available to build essential infrastructure.

The district contains 98 villages, 23 of which have no road access, and travel in the rainy season is very difficult.

Average annual per capita income is now just over 2.7 million kip, and is expected to reach 3.9 million kip in 2015.

The Lao government defines poverty as not having enough food, lacking adequate clothing, not having permanent housing and lacking access to health, education and transportation services.

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Govt approves fundamental issues for national development

March 25, 2013

Prime Minister Thongsing Thammavong

The government’s monthly meeting on March 19-21 discussed and approved several fundamental issues aimed at accelerating the pace of national development, amid growing regional integration.

Chaired by Prime Minister Thongsing Thammavong, the meeting adopted measures to address problems related to foreign workers in Laos as proposed by the Ministry of Labour and Social Welfare. The measures aim to ensure better management of foreign labourers in Laos.

The government accepts that overseas workers are necessary at this time of regional integration but says it is important to regulate them based on the country’s laws, to ensure order and security.

The government also approved a draft resolution of the Party Politburo on converting state property into capital, before submitting the document to the Party Politburo.

The resolution calls for studies on the potential and efficient use of state property with the goal of driving socio-economic development. It is envisaged this would help to reduce the misappropriation of funds as a result of improperly converting state property into capital, of which the main examples are the leases and concessions awarded to investment projects.

The government meeting also approved a report on the relocation of government offices in Vientiane. The relocation is deemed desirable as the rate of development in the capital has surged over the past 20 years, resulting in significant population growth and increasing traffic congestion.

The report identified zones for various government offices including ministries and central level organisations, as well as plans for infrastructure development and other facilities.

In addition, the meeting discussed a draft decree on the allowances to be granted to inspection officials. This is aimed at enabling inspection officials to carry out their work more efficiently and fulfill their obligations as assigned by the nation.

The government also approved in principle two mega-projects in Xieng Khuang province. These are the Khangvieng and Meuang Mork focal point development project for poverty reduction, and the building of facilities for the 11th National Games to be held in Xieng Khuang province.

The meeting also discussed issues related to the construction of international airports in Huaphan and Attapeu provinces, to ensure the projects are implemented successfully.

Mr Thongsing called on cabinet members to ensure that revenue is collected as planned so there are sufficient financial reserves for planned expenditure in the areas of economic development and poverty reduction.

He said the sectors responsible need to make sure that all land taxes and other revenues are paid as required, and to put a stop to inappropriate tax and tariff exemptions.

The prime minister urged the cabinet to address problems related to the salaries paid to teachers and retired officials.

He also insisted that the authorities stop allowing private companies to pay for state projects at the outset and be refunded by the government later, saying this kind of arrangement will only create debt for the government.

Mr Thongsing also urged the relevant sectors to manage the price of goods sold in markets to ease the hardship of ordinary people, and to address the problem of consumers being taken advantage of by traders.

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More companies moving into Thakhek Specific Economic Zone

By Somsack Pongkhao
March 22, 2013

Specific/Special Economic Zones in the Lao PDR

Fourteen companies have signed agreements and MoUs to operate in the Thakhek Specific Economic Zone in Khammuan province with total investment capital of more than US$480.3 million.

Their commitments were made after seeing the great potential of the province now that it is becoming better linked to neighbouring countries and the rest of the region.

The zone is located close to the third Lao-Thai Friendship Bridge linking Khammuan province in central Laos to Nakhon Phanom province in northeastern Thailand, which opened in November 2011.

President of the zone’s executive board, Mr Daolay Keoduangdy, told Vientiane Times yesterday that the zone serves as a focal point for attracting foreign investment and tourists to Laos and is significantly boosting the local economy.

Last week, a Vietnamese company signed an agreement with the zone authorities for a concession on an area of 14.5 hectares, to run for 75 years.

The company will spend more than US$152 million to build hotels, villas, offices, tennis courts, duty free shops, restaurants, resorts and other facilities for tourists.

Three other companies are in negotiations to sign an MoU with the authorities to run businesses in the zone. It is expected the MoUs will be signed next month. The three companies are from Thailand, China and Laos.

The Thai company wants an area of 100 hectares to build retirement holiday homes, a hospital, school, and shopping centre, while the Chinese company wants to build hotels and other tourism-related facilities. In addition, a Lao company wants to build a market and offices for rent.

The Thakhek Specific Economic Zone was approved by the government in May last year, covering an area of 1,035 hectares. Under the agreement signed between the government and the zone’s executive board last May, private developers will spend at least US$80 million on infrastructure within the zone, including roads, electricity, water supplies and drainag e.

Of the total figure, US$4.2 million has been spent on various infrastructure projects so far. The developments aim to accommodate foreign investors, and concessions have been granted for more than 50 percent of the zone’s 1,035 hectares to private companies.

Currently, companies from China, America, Singapore, Vietnam and Laos are operating businesses in the zone. These are mostly factories, vehicle assembly plants, hotels, healthcare centres and tourism-related businesses.

The zone’s management will use electronic monitoring systems to ensure the transparency and accountability of the project.

Specific Economic Zones are designed to increase the pac e of economic growth while generating job opportunities for local people, allowing them to earn an income and alleviate their poverty, and enable Laos to move off the list of l east developed countries by 2020.

Laos has been able to maintain political stability, which is a key factor in attracting foreign investment. In addition, the country is getting connected with the rest of the region and the world through new roads and bridges.

Laos also has cheap labour and receives trade privileges from more than 40 countries so businesses can benefit from this potential.

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Laos makes substantial progress in human development: NERI Report

March 22, 2013

Laos has made substantial progress in its human development over the past almost three decades, making the country one of the human development index (HDI) growth leaders in the medium human development category, a report issued yesterday revealed.

The significant gains made in economic growth and social welfare over recent years have paved the way for continued improvement in human development in Laos, according to the global 2013 Human Development Report revealed at yesterday’s launching ceremony in Vientiane.

Between 1985 and 2012, substantial progress has been made in the main HDI indicators. Life expectancy increased by 19 years, the average number of years of schooling increased by 2.5, and Gross National Income per capita increased by about 178 percent.

“Consequently, Laos has seen steady improvement in its HDI value over time, making the country one of the HDI growth leaders in the medium human development category, where it currently sits,” the report said.

The National Economic Research Institute organised the launch of the report entitled “The Rise of the South: Human Progress in a Diverse World”, sponsored by the United Nations Development Programme (UNDP).

Overall, the HDI of Laos stood at 0.543 in the 2012 Human Development Report which positioned the country at 138 out of 187 countries and territories in the world. However, when discounted for inequality, the HDI value for Laos falls to 0.409, a loss of about 25 percent.

“Our analysis confirms a message found in every Human Development Report: economic growth does not automatically translate into human development. Significant investments in people, in education and skills as well as in nutrition and health, are vital,” said UNDP Resident Representative Mr Minh Pham.

The report examines the fast-changing world and the implications for human development at the global level.

The report projects that by 2030, more than 80 percent of the world’s middle class will reside in the South, and that the Asia-Pacific region will be home to about two-thirds of the new global middle class.

By 2020, the report projects, the combined output of the three leading economies – China, India, Brazil – will surpass the aggregate production of the United States, Germany, United Kingdom, France, Italy and Canada.

The 2013 report identifies more than 40 developing countries with human development gains that significantly outpaced global norms in recent decades.

However, it warns that failure to address persistent inequalities, and a lack of opportunities for meaningful civic participation, could threaten this progress unless leaders take bold corrective actions. Environmental inaction, especially regarding climate change, has the potential to halt or even reverse human development progress in the world’s poorest countries and communities.

Deputy Minister of Planning and Investment, Dr Bounthavy Sisouphanthong, believes the report contains valuable information about the nature of and challenges for human development that will be an important reference for all parties involved in development planning and policy making.

The HDI is calculated by taking into account the combined indicators of life expectancy, education and income. It covers both social and economic development.

The global Human Development Reports are published annually with National Human Development Reports produced every four years. Since 1998, Laos has published four national reports.

The next one is due in 2014 and will focus on achieving the MDGs as a vital element of both Least Developed Country graduation and in reducing inequalities and vulnerabilities across communities in all regions of the country.

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Vice President addresses Vientiane on Three Builds directive

By Souksakhone Vaenkeo
March 21, 2013

Lao Vice President Bounnhang Vorachit (Photo: Minh Châu-TGVN)

Vice President Bounnhang Vorachit yesterday instructed the Vientiane authorities to help district and village authorities to formulate socio-economic development plans based on local strength, in a bid to spur development in local communities.

Mr Bounnhang made the suggestion at a two-day meeting of Vientiane authority on the implementation of the newly-initiated Three Builds directive on devolution (Sam Sang directive) that took place in the capital.

The directive, which features in the Resolution of the 9th Party Congress, spells out how provinces are to be built up as strategy-making units, districts are to be strengthened in all regards, and villages are to become development units. The directive has been in force since October last year.

Mr Bounnhang asked the authorities to focus on the three districts and ten villages designated to pilot the Three Builds initiative.

“The Vientiane Planning and Investment Department must lead the districts and villages designated to pilot the Sam Sang in drawing up development plans,” said Mr Bounnhang, who is Chairman of the National Committee in charge of Sam Sang activities.

“The districts and villages designated to pilot the Sam Sang must have commercially-based production projects along with other projects.”

To achieve this, the vice president suggested the Vientiane authorities send technical staff to work in local communities to lead people in carrying out production activities and teach them the correct techniques to boost productivity.

Although Vientiane boasts high agricultural production potential, the vice president noted that much of this potential remains untapped and the city imports a large number of farm products.

In this regard, he instructed officials to draw up plans and identify which crops should be grown in larger quantities, and to encourage farmers to grow them.

He reiterated that priority should be given to developing the districts and villages targeted as Sam Sang models, so they could in turn drive development in the surrounding areas.

“The allocation of state budget for investment must be in line with this direction,” he said.

To successfully implement the Sam Sang directive, Mr Bounnhang said “We must take action thoroughly.”

The vice president stressed the need to attach great importance to sustainable development based on environmentally-friendly development.

But he noted that forest areas across the capital have been occupied and overexploited, saying that forests in many areas are gradually disappearing while sawmills are mushrooming.

In this regard, he instructed officials to wisely allocate and manage land for development purposes based on sustainability.

In addition, the authorities were asked to revise legislation to ensure it was in harmony with the Sam Sang directive, which gives district and village authorities more responsibilities and tasks.

Mr Bounnhang also instructed the authorities to work harder to address social ills. He cited the prevalence of theft, bag snatching, drug abuse and smuggling, and flouting of the traffic regulations which causes road accidents, and other forms of anti-social behaviour.

The authorities were als o asked to work harder to ensure security, in order to create conditions conducive to development.

He suggested that special attention be placed on managing households, and making sure that foreigners whose documents were invalid were deported.

Mr Bounnhang recalled that taking action to carry out the Three Builds directive was aimed at realising the Resolution of the 9th Party Congress. The Resolution set an ambitious goal to reduce poverty among poor families from the currently estimated 13 percent to less than 10 percent by 2015 and advance the country further towards graduating from Least Developed Country status by 2020 and the creation of a socialist nation.

Vientiane Mayor Mr Soukanh Mahalath committed to leading officials in taking action to realise the advice of the vice president.

Deputy ministers and representatives of various government agencies also attended the meeting that ended today.

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Farmers leading the charge out of poverty in Vientiane province

By Meuangkham Noradeth & Kheuysomboun
March 20, 2013

Vietnamese researchers providing technical exchanges with that of Lao farmers.

The vast majority of villagers in the Longcheng focal group in Xaysomboun district, Vientiane province, are farmers so district officials are encouraging the cultivation of a variety crops and the raising of more livestock.

In Laos, 80 percent of the population work in agricultural production and live in rural areas so encouraging people to work in farming is an important factor in moving the country out of poverty by 2020 as targeted.

The Longcheng focal group comprise six villages that are home to 663 families and 3,675 people, said the Head of the group, Mr Bounpheng Phimphongsavanh.

He said people in this area have depended on farming and animal husbandry for their livelihood for many centuries, so growing more crops is important for boosting incomes and improving living standards.

Last fiscal year, the people of Xaysomboun district were affected by serious flooding, losing their crops and other property.

Provincial officials are working to restore and improve basic infrastructure as they seek to raise the living standards of local people step by step.

Mr Bounpheng said locals understand the government’s policy to develop the country and change lifestyles for the better so they are trying to improve their living standards by growing a wider variety of crops for sale and their own consumption.

But some people are still unaware of modern farming methods, so assistance is essential for them to increase the quality and quantity of crop yields.

Farmers in Xaysomboun district have had success with the commercial cultivation of cassava, oranges, chillies, cabbage, rubber, sweetcorn and rice. District officials are also encouraging more people in the community to become involved in animal husbandry, by raising cattle and poultry for sale and consumption.

Mr Bounpheng said crop yields in the Longcheng focal group are increasing year by year, so district officials are trying to identify markets for the produce.

The state-owned Nayoby Bank and Agriculture Development Bank are providing loans for people in the province to help them expand their farming operations, which is also helping to raise people out of poverty.

The Lao government defines poverty as not having enough food, lacking adequate clothing, not having permanent housing and lacking access to health, education and transportation services.

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Laos mulls development of cultural industries

March 15, 2013

Laos needs takes to steps to develop its cultural industries by making use of the unique traditions of the country’s 49 recognised ethnic groups to help drive the country’s development and promote its culture.

The Ministry of Information, Culture and Tourism, working in collaboration with Unesco, opened the two-day ‘National Consultation on Cultural Industries in Laos and Validation Workshop,’ in Vientiane yesterday.

The objective of the workshop is to analyse the 2010 Baseline Study to forge ahead with Laos’ cultural industry ambitions.

Mr Bouangeun Xaphouvong

Deputy Minister Mr Bouangeun Xaphouvong delivered the opening remarks, before giving the floor over to speakers who presented the initial findings of a study on cultural industries and related documents, aiming to give an overview of the cultural industry. This was followed by a discussion session.

Discussion topics include identifying and adopting what lessons were leant from the initial study report that can be made use of in Laos and identifying priorities in terms of developing cultural industries in the country.

Mr Bouangeun said he believed the workshop would create a proper understanding among participants of the concept of cultural industry so they can make use of the lessons learned in developing the initiative in Laos.

Cultural industry development is a new thing for Laos,” Mr Bouangeun told the workshop participants.

The workshop is being attended by representatives from the ministry, the Unesco regional office based in Bangkok, and some foreign embassies to Laos including France and the Republic of Korea, whose countries are well recognised for their success in developing their cultural industries.

Laos is rich in cultures and traditions, Mr Bouangeun added, and has untapped potential to develop its cultural industries to drive economic growth and contribute to attaining the government’s goal to remove Laos from the list of least developed countries by 2020.

“Having 49 ethnic groups means Laos has 49 different rich cultures. To make culture one of the drivers of national economic development is to make culture become a cultural industry,” he told the workshop.

To reach the government’s target of graduating from least developed country status by 2020 towards gradually becoming an industrial country, Mr Bouangeun reiterated the need to also realise the country’s cultural industry ambitions.

“Developing our cultural industries will make our culture more diverse and modern, which will also enable our culture to contribute to national socio-economic development,” he said.

Head of the Culture Unit in the Unesco Bangkok office, Dr Tim Curtis, agreed that Laos is rich in culture. He stressed that the diverse cultures of the 49 ethnic groups and their traditions is a great asset as it creates unique cultural products and carries economic potential.

“Cultural industries are already proving to be strong assets and helping poverty alleviation in many countries,” he said, adding that it significantly contributes to income generation and job creation and represents over 10 percent of the gross domestic product of several Asian countries.

Director General of the ministry’s Fine Arts Department, Dr Bounthieng Siliphaphan, said it would take time to develop cultural industries in Laos, citing the experience of the Republic of Korea. The country is recognised as being successful in developing its cultural industries, but Korea spent more than ten years in the preparatory stage before achieving its current success.

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