The global economic crisis could prevent Laos from leaving the UN's list of least-developed countries by 2020 if economic growth does not significantly increase, Lao economists warn.

The current growth rate of 8 percent per year could be enough to remove Laos from the list, but the US credit crisis is affecting the world market and its long-term impact on Laos is uncertain.

This was the assessment of Deputy Minister of Planning and Investment Bounthavy Sisouphanthong, who was speaking yesterday at a two-day economic forum in Vientiane to follow up on the Third National Human Development Report.

The report was prepared by the United Nations Development Programme in 2006.

“We need to speed up economic growth because more global economic turmoil is possible. Our growth rate needs to be at least 8.5 or 9 percent annually,” Bounthavy said.

The forum gathered representatives from government ministries and the UN in an attempt to devise practical solutions to ensure the continued growth of the Lao economy.

Bounthavy said the US credit crisis was not as serious as the Asian financial crisis of 1997 and 1998 in terms of possible impact on the Lao economy.

“The reason for this is that there are not many US investors in Laos and Lao exports to the US are small, whilst a large volume of our exports is garment products,” he said.

He said the financial crisis of 1997 and 1998 was very serious for Laos because the majority of investors in Laos at that time were from Thailand . Thai investors withdrew most of their money from Laos to stave off the threat of bankruptcy.

Economists suggested a clear plan be outlined in each sector to address any further downturn in the global economy. A larger budget for the development of health and education remained a key priority.

Bounthavy said at present the economy was growing but the development disparity between rural and urban areas was a persistent problem. Unemployment and income generation for villagers remained a challenge.

Officials at the forum are focusing on four topics.

The first topic is the need to boost productivity and quality in commercial production to better integrate the country's economy with that of other countries in the region.

The second topic is improving efficiency in the agriculture sector.

“Our labour force is small but we use a lot of people in this sector. We will have to balance the use of our labour force to match the demands of economic growth,” Bounthavy said.

He said a lack of risk taking and profit motive meant investment in agriculture was not as efficient as it could be.

“Investment in agriculture is similar to that in other sectors, where the main aim should be to trade and earn a profit. But the investment of our people in agriculture only achieves self-sufficiency at present.”

He said the low use of technology in agriculture showed Laos lagged behind in industrialised agriculture development.

Third on the agenda is a discussion of possible ways to add value to naturally sourced products, such as in mining, while facilitating the growth of small and medium sized enterprises. The growth of these enterprises is to be encouraged because they can provide a strong foundation on which to build the country's economy. This could help minimise the impact of any global economic downturn.

The final item for discussion at the forum is the management of illegal migration from Laos , with a view to ensuring migration does not have an adverse economic effect.

laos'

it will effect laos butt.... i believe that its time for a new economic power to come into the world and thats china. an empire has to fall before another one rises.

and with the new economic power being so close to our home land laos will surely gain from U.S. economy falling.


after the U.S. economy fall im sure there is goingto be a new world order and laos will move up a spot soon enough.

First lean about what's Financial Crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults.

Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus, however, and financial crises are still a regular occurrence around the world.

Laos may not have dollars enough to get hurt from this crisis.

This one just for thought, okay  so don't be serious
Big banks buy little banks.  Maybe next, big countries will buy bits of little countries.
Australia buy half of Sepon for Ores, Korea buy half of Luang Prabang for golf course, China buy half of Vientiane for developing a big the China Town, Japan buy half of Vang vieng for fun
But here no body want to buy Bangkok - Thailand 

Anonymous wrote:

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Laos may not have dollars enough to get hurt from this crisis.

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Since when Laos invest on anything??  C'mon!!!!!  Less tourists means less $$$ coming into Laos.  So!!! stop being stubborn and think Laos is fine and dandy.

 

SeeHarHed wrote:

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khonthakek wrote:

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First lean about what's Financial Crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults.

Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus, however, and financial crises are still a regular occurrence around the world.

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Khonthakek,

What do you meant by the bank being panic?  It is beyond panic brother, banks are loosing their $$$ and forced to close its branch left and right.  So many people I know are being affected by this bad economy.  Some are even loosing their jobs and foreclose their homes.  This is beyond panic ok!

Tell me when was the last time any major banks in U.S. close down? 

 

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Herre is what it means.

http://en.wikipedia.org/wiki/Financial_crisis