NA President Dr Xaysomphone delivers the opening remarks at the 5th session of NA. --Photo Sangkhomxay

National Assembly opens with PM pledging to tackle economic woes

The Prime Minister told the 5th ordinary session of National Assembly (NA)’s 9th legislature, which opened on Monday, that the economy is projected to grow at 4.8 percent in the first six months of this year despite ongoing challenges.
Dr Sonexay Siphandone highlighted the economic and financial challenges facing Laos and outlined the key measures put in place to tackle them shortly after the NA President Dr Xaysomphone Phomvihane delivered the opening remarks.
Among those attending the opening session were the Secretary General of the Lao People’s Revolutionary Party and President, Thongloun Sisoulith, cabinet members, and Party and state and NA members.
“The nation’s economy grew at 4.8 percent in the first quarter of this year and is expected to show growth of 4.9 percent in the second quarter, with the value of GDP projected to stand at 118,467 billion kip,” Dr Sonexay said.
The PM said both external and internal factors were affecting the economy, particularly military conflict, economic sanctions and the fuel crisis, which had resulted in a global economic slowdown, spiralling food prices and skyrocketing inflation around the world.
The rising price of fuel and high public debt ramped up pressure on Laos to source more foreign currency, especially the Thai baht and US dollar, in order to buy imports amid the declining amount of foreign currency provided by loans and foreign investment.
The raising of interest rates by the US Federal Reserve has strengthened the US dollar, which in turn weakens the value of other currencies including the kip.
Dr Sonexay said Laos was vulnerable to external impacts and, although a trade surplus of US$1.3 billion was recorded in 2022, illegal imports of goods at traditional and local border crossings remained a great concern.

PM Dr Sonexay Siphandone outlines key measures to tackle economic challenges. --Photo Sangkhomxay

Only just over 30 percent of export receipts entered Laos through the banking system, he noted. 
The premier assured National Assembly members that the government would not allow Laos to default on its debts and pledged to stabilise currency exchange rates, work harder to curb inflation, and regulate prices of products on sale at local markets.
Over the rest of the year, the government will modernise the revenue collection system and create new revenue streams so that more income is amassed for the payment of debts.
Dr Sonexay said the government will strive to plug gaps that result in financial leakages while also preventing extravagance in budget expenditure and pursuing a policy of austerity.
The government is committed to repaying 8,000 billion kip of its debts to private enterprises over the rest of this year by shifting the debts owed to private companies to commercial banks. This will enable private enterprises to maintain their financial liquidity and help them overcome economic hurdles.
The PM said the government will make more foreign currency available for fuel importing companies, modernise foreign currency trading services, regulate import and export financial transaction systems, open more foreign exchange units, and place controls on groups that manipulate foreign currencies. 
The government will continue to improve the investment climate and ensure faster approval of proposed development projects while pushing for continued progress in ongoing mega projects to boost growth.
The government also pledged to carry out more reforms among state-owned enterprises and promote the production of goods for domestic consumption and export.
NA President Dr Xaysomphone highlighted how economic challenges have affected Lao people’s living standards and urged NA members to exercise their right to debate policies and help the country to overcome the current challenges.
The NA’s 5th ordinary session is scheduled to take place from June 26-July 18, and will see NA members debate reports relating to socio-economic development and state budget plans.
Lawmakers are also set to debate the drafts of four new laws and amendments to six existing laws.
The four draft laws concern public health, job creation, land tax and Lao youth.
The six laws to be amended relate to commercial banks, aquatic animals and fishery, wildlife, printing, protection of children’s rights and interests, and the military court.

By Somsack Pongkhao
 (Latest Update June 27, 2023)