Photo: The government plans to base Lao industry on agriculture.

‘Industrialisation ' and ‘modernisation' are popular words that Lao leaders like to mention at every Party gathering.

But no one can predict what this agriculture based economy will look like when it ultimately reaches its development goals in 2020. But it is certain that Laos will not be as it used to.

“The Party has reached the conclusion that only industrialisation and modernisation will free the country from poverty. This concept has been successfully implemented in many countries around the world,” said Deputy Prime Minister, Dr Thongloun Sisoulith in his opening remark in an
industrialisation and modernisation strategy, drafted and completed in 2002.
The concept of industrialisation in Laos began in 1975 after the birth of the Lao PDR. The late President Kaysone Phomvihane initiated it. The concept has since been included in every resolution of the Lao People's Revolutionary Party's Congress.

Dr Thongloun said the path of development would be built on the foundations of agriculture, forestry and the country's unique geographic location as an inter-regional trade route . In addition to forestry, Laos has plenty of natural resources, rivers and minerals.

The study of the Economic Research Institution of the Committee for Planning and Investment shows that Laos will need to learn some lessons on industrialisation from other countries in order to build its own industrial infrastructure.

In accordance with the lessons of successful developing countries in Asia , industrialisation begins with the import of technology from abroad. But the main challenge for Laos is to create a better investment climate.

Therefore it is the responsibility of the government to build up the necessary foundation for industrial development, such as construction of infrastructure and development of education.

In the 1980s, Laos introduced a market-oriented economy, opened its door to the world and welcomed investment from foreign countries.

Since 2000, the Lao government has been making great efforts to provide the foundation for development. Roads have been built at village, district, and provincial levels, making transportation more economical.

Electricity is another key component. The expansion of the power grid has reached almost every corner of the country.

In terms of education, a university has been established and many vocational schools, both state and private, have opened in Vientiane and throughout the provinces.

Though many efforts have been put into action, Laos is still considered to be one of the least developed countries and in order to achieve progress, Laos still has much to do.

It must make its political system stable, strong, orderly, and safe. Agricultural production will
have to be expanded from its current level of sufficiency for domestic consumption to a surplus for
export . Infrastructure will have to be expanded to facilitate construction of industrial factories.


There should be a large pool of well-educated individuals and the macro economy must be stable, according to the recommendations of the strategy.

There are three recommended stages for industrialisation and modernisation of Laos . The first stage is from 2001 to 2005, the second from 2006 to 2010, and the third from 2011 to 2020.

The first period is for strengthening industry sufficently to survive in ASEAN after the country joins the ASEAN Free Trade Area (AFTA). During this period, the government will focus on development of important sectors such as education and basic infrastructure to bring it in line with neighbouring countries.

The second period is for continuing improvements of four conditions, which are considered to be key to developing other industrial sectors. These are an accountable system of strong governance and management, developing education, better economic and social infrastructure, and a strong macro
economy.

The third period is for completing industrialisation and modernisation in some sectors. There will already be some mature industrial sectors operating in this period of time.

Currently Laos is in the initial stages of transforming its industry and therefore has to facilitate the conditions for growth; policies will have to be laid down that are consistent with the industrial potential of the country.

Laos has great potential in development of manufacturing, energy, mining and labour.

With plenty of rivers, and the potential to generate 23,000 MW of electricity, Laos can become the battery of ASEAN. Among the major investments in Laos are the Nam Theun 2 hydropower plant in Khammuan province and the Sepon Gold Mine in Savannakhet province.

By Ekaphone Phouthonesy
Source: www.vientianetimes.org.la