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No limit on imports, despite trade deficit
The government does not plan to limit imports despite the major trade deficit, a senior official from the Ministry of Industry and Commerce has said.
“The quantity of goods imported is based on demand so we won't set any limits,” International Trade Policy Department Deputy Director General Dr Laohua Cheching said yesterday.
His comment comes after the ministry unveiled its latest import and export report, which revealed that in the first nine months of last fiscal year Laos had a US$324 million trade deficit, with imports of vehicles and spare parts the main driving force.
The rapid increase in imports has sparked concerns among businesses as the issue could destabilise the economy. Laos exported more than U$S1.3 trillion worth of goods during the first nine months of last fiscal year and imported goods worth more than US$1.7 billion.
Dr Laohua, who is a former Deputy Director General of the Import and Export Department, said the government had abolished its policy of limiting the trade deficit to within five percent of GDP as this policy goes against market mechanisms.
“Limiting imports amid rising demand leads to corruption because importers can bribe officials to allow them to bring in goods illegally,” he said, adding that the market itself should adjust imports and that imports will drop naturally once consumers' purchasing power is limited.
He was optimistic that imports would in fact help to boost export value as Laos is currently importing new technology to modernise production, so that more goods can be produced for export.
Dr Laohua said a prime ministerial decree made it clear which goods required import and export permits, citing the example of explosive devices.
Goods not on the control list could be imported without a permit, such as general consumer items, he said.
An unnamed trade official said the government's decision to relinquish control on the value of imports was in line with its goal to become a member of the World Trade Organisation (WTO), which requires Laos to open its market to WTO member countries in return for access to foreign markets.
He also said that although the government won't be limiting the value of imports, it was important to make the public aware that the consumption of domestically produced goods is key to strengthening the economy.
Boosting domestic consumption would also bolster domestic investment, he said, thereby creating more jobs.
Meanwhile, the go-vernment is continuing to eliminate unnecessary administrative procedures that are barriers to economic productivity in line with the resolution of the 9th Party Congress, which aims to keep GDP growth above 8 percent over the next five years.
vientiane times
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