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.
of course ,the impact of World's economic recession will slow down the Laos economic growth , especially in Export and foreign investment in Laos, I am sure that aids of foreign country to Laos will be gradually decreasing which is not good for the government. Meanwhile , the global recession has impacted on many foreign investors who are interesting in Mining and Hydro power plant in Laos which is quite good for our environments.
I thought someone in here said earlier... Laos doesn't feel the effect of global economy. So? What's going on now? Laos is feeling the effect of down turn economy??? 23% of tourists equal to lots of $$$$..
I thought someone in here said earlier... Laos doesn't feel the effect of global economy. So? What's going on now? Laos is feeling the effect of down turn economy??? 23% of tourists equal to lots of $$$$..
You are right, but this time it was finally realized that the country is indeed affected. Maybe it took a while to sink in . But this current news is more realistic, isnt it?
. But this current news is more realistic, isnt it?
