ADB readies new aid strategy for Laos
The Asian Development Bank (ADB) expects to launch a new aid strategy for Laos at the end of this year, according to a senior bank official.
ADB Country Deputy Director Mr A. Barend Frielink said on Wednesday the bank is preparing to launch the aid strategy to help the Lao government implement its five-year socio-economic development plan for 2011 to 2015.
The strategy will focus on helping the government to diversify the country's economic base as it is currently too reliant on the export of natural resource-based commodities, including gold and copper, which will one day be depleted, he said.
The Lao economy is projected to see 8.1 percent growth in 2011 with the increasing export value of electricity, copper and gold as one of the main driving forces. Small and medium size enterprises (SMEs) are only minor contributors to GDP growth.
Many developed countries have policies to promote investment in SMEs as they not only create jobs for a large number of people but also revenue for the government.
Mr Frielink also said export-oriented economies face challenges due to global uncertainty and the volatility of commodities prices in world markets.
“This is not only an issue for Laos but for the region as a whole. China has started to rely less on exports and focus more on domestic demand,” he said, adding that Asian countries should focus on the regional market instead of the US and European markets, which are facing a crisis.
He said Laos' economic development will not be at risk if the country can reduce its reliance on the export of major commodities.
Laos faced a minor drop in GDP growth in 2009 due to the global financial crisis, which caused a major reduction in the price of copper from US$8,000 to only US$3,000 per tonne. The price of copper is now about US$9,000 per tonne.
Mr Frielink said a major part of ADB's assistance to Laos is to train young people in the skills needed to meet the demands of economic growth.
Laos has to import a large quantity of skilled labourers from Vietnam and China as it cannot supply the amount required for the increasing number of investments and businesses in the country.
An increase in the number of skilled Lao workers will also lead to the establishment of more SMEs, which will play an important role in driving the economy in the future.
Mr Frielink also said that ADB will continue to help the Lao government to improve the country's business and investment climate so as to boost and sustain growth of the Lao economy.
Laos has amended a number of its laws and regulations, and established new mechanisms to facilitate private investment, but the capacity of state agencies to enforce policy is still low compared to other countries in the region.
vientiane times
|
