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Laos embraces free trade
(this article originally appeared as a part of
Crown Jewels of the Greater Mekong Region)
Laos committed itself in early September to joining the Association of Southeast Asian Nations' economic co-operation scheme including the ASEAN Free Trade Area. Krik-krai Jirapaet, director-general of the Business Economics Department, said the commitment of Laos is a significant contribution and will strengthen ASEAN cooperation.
The 10-year implementation period for tariff rate reductions will be given to Laos, the same as ASEAN member states, depending on when it is ready to submit the list of products. There are no estimated tariff rate figures available for Laos, he said. Efficient personnel is the biggest problem for Laos to join ASEAN, so Laos wants support from ASEAN in this sector.
The country still needs much adjustment in many aspects like legal frame-work and the method to increase tax revenue. Mr. Sompadith, the Laotion minister of commerce said in the statement that Laos has a current account deficit accounting for 14 percent of Gross Domestic Product and a budget deficit representing 4% of GDP.
Lao economy on track
The International Monetary Fund's resident representative in Laos recently gave the country a pat on the back for launching sound economic reforms this year. The IMF's Paul Wade said a mission from the agency's Washington headquarters had visited Laos last week and found that economic reforms in the land-locked nation so far this year were positive. The midterm review of the third annual arrangement of the ESAF (Enhanced Structural Adjustment Facility) program is quite favorable," he told Reuters by telephone from the Laotian capital of Vientiane.
Tiny, land-locked Laos has 4.5 million people and an annual per capita income of US$ 350. "On the macroeconomic front, the government has undertaken policies which are broadly sound and good. There has been a strong economic performance this year," he said. Wade said the government had also maintained high economic growth, and the IMF was confident that earlier predictions of a 7.5% growth in the gross domestic product (GDP) would continue through 1996, up from 7. 1 % in 1995. "We see that growth continues to be high at 7.5%. We are quite happy with that," he said.
Laos plays bigger regional role
Laos will be more outward-looking and will play a greater role in the region under a strategy set out by the country's leaders. The vision was reflected in the Political Report of the Lao People's Revolutionary Party delivered by Khamtay Siphandone, the leader, at the start of the sixth congress.
Prime Minister Khamtay called for an improvement in economic sectors, more investment in agriculture and measures to boost investor confidence to assure economic growth of 8-8.5 per cent per annum until 2000 and lift per capita income from $35O to $500.
"The objective is to gradually stabilize national finance on the basis of increasing domestic income, reducing reliance on external income, balancing income and expenses in the' national budget, and generating initial accumulation," Khamtay said.
Mekong to be bridged in Southern Laos
Three locations between the Lao towns of Pakse and Phontong in Champasak province have been selected as possible sites for the first bridge across the Mekong in Laos. The bridge will be part of the East-West Corridor route linking Thailand with Indochina recommended by an Asian Development Bank study.
The route is expected to be a main trade route for Lao agricultural products into Thailand. It would form an international route linking Northeast Thailand with Southern Laos, Southern Vietnam and Eastern Cambodia.
The ADB forecasted that by the year 2001, more than 30,000 tourists would visit the province annually to see Wat Phu temple, the KI-iong falls, Khong Island and the Boloven Plateau. The survey began last year and is now complete. The Lao government wants construction to begin during 1997 and be completed before the year 2000, because it hopes to designate 1998 a tourism year.
The government plans to promote Champasak province as a center of tourist activities in Southern Laos. Champasak is also the agricultural production base for southern Laos, and the location of the country's major coffee plantations. The Pakse bridge is expected to generate a trade and tourism boom in the area, which is hampered by an infrastructure bottleneck. A ferry crossing is currently the only major means of transporting goods and people between southern Laos and Thailand.