Dr Sonexay Siphandone addresses the session.

Dr Sonexay Siphandone elected new PM as Laos faces greatest challenges in decades

Members of the National Assembly (NA) on Friday elected Dr Sonexay Siphandone, the former Deputy Prime Minister, as the new Prime Minister to replace Mr Phankham Viphavanh following his retirement.
The change in premiership comes at a time when Laos is facing its toughest time in decades, with the government striving to prevent the country from sliding into default and to bring inflation down to an average of nine percent this year. The inflation rate jumped to 38.46 percent in November.
Mr Phankham, who was premier for one year and nine months (from March 22, 2021 to December 30, 2022), submitted a letter on December 15 to President Thongloun Sisoulith, requesting to retire from the premiership, which has a five-year-term.
In an address to the 4th ordinary session of the NA’s 9th legislature on Friday that was televised, the outgoing 72-year-old premier told lawmakers that his age and health made him unfit to take on hard work amid the hardships being faced by Laos.
Citing his age, weakening health and the economic hardships confronting the country, Mr Phankham said, “I could no longer bear such a heavy task.”
Therefore, he said, he submitted his resignation letter to the president.
The Vice President of the National Assembly, Mrs Sounthone Xayachak, read a letter from President Thongloun about Mr Phankham’s request to resign, and gave the floor to the people’s representatives to vote for a new head of the government.
Solely nominated by President Thongloun, Dr Sonexay overwhelmingly secured a majority of 149 votes, representing 98.67 percent of the 151 NA members present for the session. Two representatives voted against him.
According to Article 58 of the Lao Constitution and Article 65 of the Law on the National Assembly, 51 percent or more than half of the votes of the lawmakers attending a session is enough for Dr Sonexay to secure the top administrative job.
The vote was originally not included in the agenda for the 4th ordinary session, which was held during December 5-30, and it was specially scheduled.
Addressing the nation live, Dr Sonexay thanked the NA’s members for their votes, which put him up for the noble but heavy and challenging job. On behalf of the 9th government cabinet, he thanked Mr  Phankham for his highly valued contributions and service to the people and the nation.
The former deputy prime minister, who was in-charge of economic affairs in Mr Phankham’s administration, assumes the top office at a time when Laos is facing increased challenges, ranging from the sharp depreciation of the Lao kip to high inflation, against the backdrop of a deteriorating global economic environment.
The kip lost 68 percent of its value against the US dollar over the past year to October, undermining recovery and fuelling inflation, according to the World Bank.
The new Prime Minister’s administration will take on the tough task of pursuing the ambitious target of achieving an average inflation of 9 percent this year as approved by the NA’s 4th ordinary session.
Inflation in Laos has risen since the beginning of 2022, despite efforts to curb it. Six months ago, the NA’s last session approved the former Deputy Minister of Finance, Dr Bounleua Sinxayvoravong, to replace Mr Sonexay Sitphaxay as governor of the central bank, the Bank of the Lao PDR, to oversee monetary policy. High-level debt accumulated for decades represents another challenge for Dr Sonexay’s cabinet in fulfilling the government’s commitment to prevent Laos from sliding into default.  The debt service obligations of Laos are an average of US$1.3 billion per year for 2023-26, or close to the total stock of official foreign reserves recorded in June 2022, according to the World Bank. The high debt-service obligations constrain public spending on health, education and social assistance.
“I deeply understand that this is an assignment of prestige and noble political duty and it is also a heavy and challenging task and test for me,” Dr Sonexay said as he thanked his voters.
He vowed to endeavour along with members of the cabinet and senior Party and state leaders to realise key targets. These include realising the resolution of the 11th National Party Congress, the 9th five-year socio-economic development plan and the two national agendas on addressing the economic and financial difficulties and countering drug trafficking.
“I stand ready to dedicate my physical power, wisdom, knowledge and competency in my duty with the highest responsibility and honesty,” he said.
Other key agendas Dr Sonexay pledged to fulfill to mitigate challenges and strengthen the economy include:
Maintaining firm political stability and security and constantly addressing social ills,
Increasing macro-economic management through various measures, including continuous reform of state enterprises and the financial-budgetary and monetary system,
Improving good governance,
Creating basic factors conducive to sustainable development, alleviating poverty and narrowing the development gap.

By Souksakhone Vaenkeo
 (Latest Update January 3, 2023)