Many Lao people are struggling to make ends meet and improve their standards of living despite the robust growth of the national economy.

Street market in Xayaboury province. Lao people have to spend more money on food as price of the good surges.

Members of the public are often heard to comment that they are now earning more income but have to spend more money to buy the same amount of food as before, as prices of vegetables, meat and rice have all increased over the several months or so.

“We earn more money, but we also face higher living costs. Mathematically we’ve gained very little from the economic growth,” said a construction worker, adding that his daily wage has increased to 45,000 kip, up from 35,000 kip last year.

He said that the relevant sectors should introduce concrete measures to reduce the rising prices of foods that all people rely on.

“We are really hit hard by rising food prices because we have to eat no matter how much it costs,” the construction worker said.

According to the latest report from the Ministry of Planning and Investment’s National Statistics Bureau, Laos’ GDP grew by 8 percent in 2010. However, inflation over the second quarter of the 2010-11 fiscal year has already exceeded GDP growth.

The prices of food and non-alcoholic drinks increased by 13.95 percent in June compared to the same period last year. Water, electricity and cooking gas prices rose by 5.46 percent, while prices in the communication and transport categories saw 11.17 percent growth in the same period.

Some of the increases in food prices can be attributed to the fact that the wet season makes cultivation of vegetables more difficult, causing supply shortages and thus higher prices. The death of pigs from an outbreak of blue ear disease and also of cattle due to unusually cold weather in recent months has also caused meat prices to rise in the country this year.

Lao National Economic Research Institution Acting Director Dr Leeber Leebuapao said that damage caused to roads and bridges by flooding in recent months has disrupted the supply of goods between production bases and markets.

More and more people are concerned about the growing gap between the nation’s rich and poor citizens. A report from the Ministry of Planning and Investment acknowledges that despite strong economic growth in Laos over the past several years, income disparities and the gap between the rich and poor are becoming larger.

Deputy Minister of Industry and Commerce Dr Nam Vinhaket admitted that some people earn large incomes through illegal means, including the illicit timbers trade, and have plenty of money to buy goods, thus pushing up prices.

Source: Vientiane Times