The overall assessment of Laos' economy by IMF

Date: Sep 16, 2009

The overall assessment of Laos' economy by IMF

Date: Sep 16, 2009

Date: Tues, Sep 15 2009 5:50 pm
From: Secretariat

*Govt seeks partners to tackle economic downturn*

Vientiane Times, 16 Sep 2009

The government is seeking cooperation from overseas development
partners, in a bid to address the adverse impacts of the credit
crunch.

A high level dialogue between representatives of the Lao government
and international financial institutions, international organisations
and donor countries in Laos took place at the Lao International
Training and Cooperation Centre in Vientiane yesterday.

Deputy Prime Minister and Minister of Foreign Affairs Dr Thongloun
Sisoulith presided over the meeting, which discussed how the
government should respond to the impact of the global recession on its
socio-economic development plan and revenue collection.

Speaking at the opening ceremony, Dr Thongloun urged meeting
participants to voice their opinions on what the Lao government needs
to do to address the aftermath of the global economic downturn.

The government would use the advice it received to adjust and improve
its approach to meeting current needs. This was essential to ensure
continual socio-economic development in times of financial hardship,
he said.

Details of the discussion were not immediately available to the media.

Deputy Minister of Planning and Investment Dr Bounthavy Sisouphanthong
said the global financial recession, which started a year ago, had
caused the government to struggle in rolling out its 2008/2009
economic-socio development plan.

Economic growth will reach only 7.1 percent this fiscal year, down
from the original plan of 8 percent, he said. International financial
institutions have lowered the Lao growth forecast to just 4.5 percent
this year, down from an earlier estimate of 6.8 percent.

The global recession has caused the delay, suspension or cancellation
of major investment projects, Dr Bounthavy said.

Chinese investors had suspended investment in a gold mining project in
Luang Namtha, and another Chinese company had delayed investment in
the construction and operation of iron smelting factories in Vangvieng
district, Vientiane province.

A number of hydropower developments, including the Nam Ngum 3 in
Vientiane province, Nam Theun 1 in Khammuan province and Donsahong in
Champassak province, were unable to reach power purchase agreements as
a result of the financial crisis, he said.

The global recession has also affected Lao exports. The price of
several major export products including copper and agricultural items
saw a big drop, meaning Laos was unable to meeting its export value
target.

Tourism is one of the drivers of the Lao economy, and has been hardest
hit by the global slump. The Lao National Tourism Administration now
forecasts that tourist arrivals will reach 1.6 million this year, down
from the original estimate of 1.9 million people.

The number of visitors from Europe and USA dropped the most, by 23
percent and 17 percent respectively. However, the number of visitors
from Thailand rose by 49 percent.

The government has introduced several plans and measures to tackle the
crisis and facilitate investment in Laos . It also wants to turn the
recession to its advantage by using it to improve the investment
climate.

Date: Sep 16, 2009

Date: Tues, Sep 15 2009 5:54 pm
From: Secretariat

*Malaysian Firm To Develop Special Economic Zone In Laos*

VIENTIANE, Sept 14 (Bernama) -- A Malaysian company, Universal Pacific
Ltd has been given a 50-year concession by the Laos Government to
develop a special economic zone near the newly-completed Laos-Thai
railway line across the Mekong River.

According to Malaysian and Laos officials here, the company was
expected to allocate US$50 million to develop the 53-hectare zone
located in Dongphosy at the Laos-Thai Friendship Bridge.

"This is an area with great potential as it is close to Thailand, has
a railway line which is important for transportation of goods and more
so, future plans to extend the track to Vietnam and China," a
Malaysian official said here.

Thailand funded the 197 million baht 3.5 km railway to its land-locked
neighbour, linking the Kingdom's northeast city of Nong Khai and
Dongphosy, located about 25km from the capital.

According to Vientiane Times daily, the agreement was signed last
Saturday by Vientiane Department of Industry and Commerce Director
Berlinh Phetchantharath and Universal Pacific Chairman Terence Lai.

The company is expected to undertake a mixed development project over
a period of 10 years, comprising 3-star hotels, a shopping mall,
hospital, bank, public park, duty free market, spa and sports
facilities.

Many Malaysian companies are involved in the hospitality, services and
construction sectors in Laos, among them Gamuda, Public Bank and Lao
Syuen Development Co.

Date: Sep 17, 2009

BLM wrote:

http://www.imf.org/external/np/sec/pn/2009/pn09115.htm

It's rather disappointed. None of you guys congratulate Lao government for doing such a good job. The credit should be given when it's due not just criticism. I read the whole assessment from IMF concerning the economics' performance of Lao PDR and I can say that they had done fairly well throughout the FISCAL year 2008/2009 despite domestic natural disaster and the global financial crisis. With some inputs and advices from IMF staff members, Laos would have no serious trouble in getting out of the list of poorest country to somewhat a developing status in 2020. The international community along with IMF will do what it can to help Laos achieve its goal. Should Laos struggle along the way, the invention will definitely be provided. The inflation rate is not that bad at all according to the Consumer Price Index (CPI). This is the article I'd been waiting for. The overall assessment is positive and for this, I will congratulate Laos myself.

BLM

khonthakek · Guru

thats good news for Laos to have a special economic zone in vientiane,
In China, Special Economic Zones were founded by the central government under Deng Xiaoping in the early 1980s. The most successful Special Economic Zone in China, Shenzhen, has developed from a small village into a city with a population over 10 million within 20 years. I read some news. Lao government learnt a lot about special economic zone from china, hopefully vientiane no need 20 years to reach and become developed city like shenzhen.

ban nok · Senior Member

Arhg!!! GDP listed in billions of kip, wonder what that translated to 4.89 billion US? or 48.9?

Balance of payments still pretty horrid, Laos needs to get off the dole, never good to rely on the generosity of others. Debt as a % of GDP is pretty big too, but many nations have been there before.

Interesting to read remitances listed as one of the sources of funds, (and they are down) isn't it time to send a Western Union to aunt Noi?

Date: Sep 17, 2009

ban nok wrote:

Arhg!!! GDP listed in billions of kip, wonder what that translated to 4.89 billion US? or 48.9?

Balance of payments still pretty horrid, Laos needs to get off the dole, never good to rely on the generosity of others. Debt as a % of GDP is pretty big too, but many nations have been there before.

Interesting to read remitances listed as one of the sources of funds, (and they are down) isn't it time to send a Western Union to aunt Noi?

Ban nok, I would not ever question your good intention for the motherland LOL, but you need to have basic knowledge of Principle of Micro and Macro Economics in order to understand its basic concept and illustration. GDP at current market prices is the same as the GDP after adjustment so it is $4.89 billion not $48.89 billion. You can round it off to $5 billion which is about right and that is the Purchasing Power Parity (PPP) and the GDP per capita is about $2,100. By the way, how much is $1 convert to Lao Kip? I just wonder. To achieve a nominal GDP of $48 billion dollars, Laos needs 10 to 12 years from now with the same rate of growth. The GDP at constant prices is the same meaning as GDP at foreign exchange rate which is about 6% if average it out by adding them up and divide by 6 from 2004 to 2009 as indicated above. Just click on the link again. Though the foreign exchange rate is quite low despite the economic growth of 7.5% but I am still convinced that Laos will be removed from the list of poorest country in 2020.

BLM

niya · Guru

Watches are a beautiful thing. Certainly, they tell us the time - but aren't they so much more than that? replicas watches Through their watches, a person can express so much, and in a way it could be said:replicas watches Show me your watch and I'll tell you who you are.