Economy

Laos Reviews 39 Years of Remarkable Progress

Political stability, security, social order and economic growth, all of which have been successfully maintained, have been the outstanding achievements of the Lao government and people under the guidance of the Lao People’s Revolutionary Party over the past year.

Party and government leaders, and representatives of the diplomatic corps and international organisations, all cited these highlights in the speeches they made to mark the 39th anniversary of the founding of the Lao People’s Democratic Republic.

A ceremony to accept the good wishes of the diplomatic corps and international organisations took place at the Presidential Palace on Monday.

“We are delighted to witness that Laos continues to enjoy firm political stability, security and social order, and has achieved a relatively high GDP growth rate of 7.5 percent compared to 2013,” President Choummaly said.

President Choummaly also highlighted the achievements made in the areas of education, social and cultural development, and the overall well-being of the people, which he said has also improved.

In addition, he noted that the current GDP per capita has reached US$1,692, while poverty reduction efforts have reduced the percentage of poor households to 8.11 percent.

“All this has laid a solid foundation for us to continue realising the objectives of the current Seventh Five-Year Plan in its final stage,” he said.

On behalf of the Party, government, and Lao people of all ethnicities, President Choummaly thanked the diplomatic corps and representatives of international organisations, the government and people of their respective countries and heads of organisations for the continued support and assistance rendered to Laos over the past years.

Malaysian Ambassador to Laos and Dean of the diplomatic corps, Laos Dato’ Than Tai Hing, made special mention of Laos’ economic growth, saying it is considered to be highest in the region in terms of GDP growth, and faster than the average growth rate of developing Asian countries.

He also emphasised the government’s success in maintaining political stability, security and social order, ensuring that Lao people of all ethnic groups can enjoy their legitimate rights and freedom and actively participate in national development.

Dato’ Than Tai Hing represented other members of the diplomatic corps in expressing their confidence that Laos, as a least developed and landlocked country, through the wise guidance of its leaders, will realise its ambition to transform the country into a hub of connectivity.

This will enable integration of the economy with those of neighbouring countries in the Greater Mekong Subregion and the world.

Referring to the efforts of the Lao government and people to achieve the Millennium Development Goals and graduate from Least Developed Country status, the ambassador also expressed his confidence that Laos would graduate from that status by 2020.

The ambassador also underlined the success of Laos in terms of its pragmatic foreign policy, which has accelerated diplomatic relations with its neighbours and the international community.

This was underscored by the increase in the number of countries with which Laos has diplomatic relations, which has now reached 136.

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Notable success in Laos-Belarus cooperation

July 6, 2013

After an official visit to Belarus, President Choummaly Sayasone and his delegation arrived in Vientiane yesterday after notable diplomatic achievements which set the path for greater cooperation between the two countries in the future.

Among the significant successes are the fact that the president and his Belarusian counterpart Alexander Lukashenko reaffirmed their willingness to expand cooperation in economic and trade matters based on each other’s potential, according to the Lao Ministry of Foreign Affairs.

In this regard, both sides agreed to work together to bolster cooperation in investment, the machinery industry, agricultural processing, crude oil, pharmacy and chemistry, as well as science and technology.

To stimulate greater cooperation, the respective parties aim to bring about conditions to facilitate economic and trade relations and explore joint-venture production operations. In practical support, 10 agreements were signed following talks between the two heads-of-state.

The documents signed included agreements on visa-free travel for diplomats and official passport holders, on promotion and mutual protection of investments, on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and property. Other agreements pertain to cooperation in research and development and education, according to the Belarusian Telegraph Agency (BTA).

The leaders agreed on the mutual participation of Belarusian and Lao enterprises in the state programmes of the two countries. They will also make use of the newly-established Laos-Belarus Joint Cooperation Commission to boost bilateral relations.

The two leaders highly value their countries’ traditionally friendly relations. They also reached consensus to extend mutual support to one another in regional and international arenas.

In the legislative field, the leaders shared a commitment to increase cooperation between legislative bodies through exchange visits by delegations from their respective national assemblies.

During the visit to Belarus, the Lao president and his entourage toured some important places in the country including the Minsk Automobile Plant and a military academy.

President Choummaly also had meetings with Belarusian Prime Minster Mikhail Myasnikovich as well as high-level congressmen of the Belarusian parliament. On this occasion, President Choummaly invited President Lukashenko and Prime Minister Myasnikovich to visit Laos in the future.

Officials of both sides will also organise activities to mark the 20th anniversary of the establishment of diplomatic relations between Laos and Belarus.

There has been considerable diplomatic activity between the two countries in recent times. Early last month, Deputy Prime Minister and Minister of Foreign Affairs Dr Thongloun Sisoulith led a delegation paying an official visit to Belarus.

On that occasion, both sides signed a memorandum of understanding to establish the Joint Cooperation Commission between Laos and Belarus. Late last month, Belarusian Economy Minister, Mr Mikalay Snapkow, led a delegation to visit Laos.

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Prime Minister tours a model development village

July 5, 2013

Suang village residents greet Prime Minister Thongsing Thammavong and his delegation yesterday.

Suang village residents greet Prime Minister Thongsing Thammavong and his delegation yesterday.

Prime Minister Thongsing Thammavong traveled to a remote part of Vientiane province to supervise the implementation of the “three build directive,” which aims to empower local authorities to develop themselves.

The three build directive is one of the resolutions of the 9th Party Congress, which aims to transform the province into strategic units, the district as comprehensive units, and villages as development units.

The prime minister and his delegation arrived at Suang village, one of the pilot “three build directive” villages in Vangvieng district, Vientiane province at about 9:00 am where they were greeted by villagers.

A number of government members, provincial governors and provincial officials accompanied the Prime Minister to the village, whose residents were keen to hear advice from top government leaders on how to put the resolution into practice.

Suang village officials told the visiting guests that that the village saw rapid development over the past years after the higher authorities selected the village as part of the pilot project to implement the three build directive.

They said that the village welcomed officials from higher authorities, who can help them to improve village administration, security and the economy, laying a concrete foundation for the villagers to earn a better living and rise above the poverty line.

With assistance from higher authorities under the “three build directive”, the village now has access to electricity, water supplies and health care services. The villagers were also given advice and assistance on how to grow cash crops and raise animals for commercial purposes.

One of the major progressions in the development of the village is that the residents now have a market where they can buy and sell goods so as they can earn cash income, one of the main conditions, which makes the villagers trust in the leadership of the Party and government.

Prime Minister Thongsing Thammavong welcomed the new development in the village. However, he urged the local authorities to work harder in the implementation of the three build directive so that the village can further improve its outlook.

He said that to achieve success in village development, Party members and officials in the village should play their part as good role models for local villagers. The village leadership body should also have a better understanding of the Party and government policy and aspirations of the villagers so that they can put the policy into practice effectively.

One of the important tasks which the village authorities must pay attention to is to create conditions for the villagers to maintain unity, take part in preserving security and promote future economic development.

He also urged the local authorities to identify its development potentials, which will in turn enable the people to raise their income levels. He also stressed the importance of education and health care services in the village, adding that children should be encouraged to attend school while villagers should maintain hygiene as part of efforts to prevent disease outbreaks.

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Laos achieves remarkable progress in poverty reduction

April 4, 2013

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

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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