Govt to pursue targets in face of economic difficulty
Laos is feeling the effect of the global economic crisis, but the government has made plans to ensure the nation's economic security.
P rime Minister Bouasone Bouphavanh says Laos cannot avoid the impact of the current global economic crisis because the national economy is not strong enough.
But the government has outlined how it will maintain the country's economic stability and ensure production levels increase, electricity expansion continues and petrol remains affordable.
Mr Bouasone met with business operators in Vientiane on Saturday and spoke about how the government plans to boost economic growth.
Firstly, the government remains strongly committed to achieving its annual economic growth target of 8 percent and does not intend to revise its budget for this fiscal year.
“The government will increase its efforts and take a greater responsibility to achieve its target,” he said.
He said rising petrol and food prices combined with growing inflation indicated the global economy would not significantly recover in the near future – but the country's leaders are prepared.
The government will attempt to maintain economic stability by improving administration, implementing policies to encourage business growth, and making it easier for small and medium enterprises to access loans.
Inadequate legislation, which has previously discouraged investment, will be improved in order to attract more domestic and foreign investors.
More money will be spent on infrastructure such as irrigation, investment in boosting food production and the establishment of a rice bank to ensure food security. The rice bank could also be used to help control price fluctuations, by releasing rice into the market during times of shortages.
Mr Bouasone said the government had encouraged farmers to plant rice on 94,500 hectares throughout the country and this crop was now being harvested. The government hopes 400,000 tonnes of rice will be produced.
The Bank of the Lao PDR was instructed to make loans available to encourage growth in the sectors of agriculture, manufacturing and construction.
About 100 billion kip in loans will be allocated for wet season rice production, 290 billion kip for animal husbandry promotion, 331 billion kip for manufacturing projects and 450 billion kip for construction of infrastructure.
In addition to these loans government staff will also advise farmers on rice seeds and farming techniques, particularly in areas with high production potential.
Mr Bouasone said the government would consider extending loan periods in certain circumstances.
The government decides which pieces of land can be used for purposes such as agricultural production, construction and industry. Decisions related to agricultural plantations will be fast-tracked.
In addition to assistance for farmers, the government will also implement policies to encourage the handicraft sector to increase exports.
The government will take a bigger role in managing the price of goods and will monitor supply and demand trends, especially in major cities.
Action will be taken against people who hoard rice and petrol with the intention of selling it at inflated prices in times of shortages, while the government will work towards ensuring sufficient supplies of both of these commodities. Individuals, businesses and government organisations will be encouraged to use fuel responsibly.
Mr Bouasone said steps would be put in place to ensure factories continued to meet production goals to adequately supply the market, particularly steel, cement and other construction materials.
He said the government expected to expand the country's electricity network on schedule, and would give particular priority to areas where there is high potential for production. Study of renewable energies will also increase.
The government intends to focus on managing the cost of transportation and improving transportation and tourism services, especially in major cities.
It plans to negotiate with neighbouring countries to improve transport regulations to reduce costs and make transport more convenient. Attention will also be paid to road maintenance during the rainy season.
The government will promote the tourism sector and encourage hotels and restaurants to provide quality service and charge reasonable prices.
Taxes and customs fees will be strictly enforced and there is a plan to stamp out corruption among customs officials.
The government intends to address market fluctuations in regards to currency exchange and work towards managing the value of the kip while also controlling inflation.
Mr Bouasone advised his cabinet to consider recommendations suggested by business operators who attended the meeting.
“Whatever contributes to boosting economic growth and is legal, it should be addressed urgently,” Mr Bouasone said.
“On behalf of the government, I confirm the government will seriously implement these measures.”
Ministries must be active in addressing these challenges and work together for the whole nation's benefit, he said.
Mr Bouasone urged business operators to continue to offer suggestions and recommendations to the government by speaking to relevant ministries or the government secretariat.
“To confront this situation, we need assistance from all sectors and all levels of society,” he said. “This is essential to break through the difficulties and challenges in order to achieve our target of boosting economic growth.”
