PM: Reform state investment, act to avert economic crisis  

Prime Minister Thongloun Sisoulith has told authorities in charge to reform state investment and ensure spending is effective, as part of measures to strengthen the macro-economy and prevent a crisis in the coming years.
The leadership of state entities involved in ineffective investment must take responsibility for mistakes made in accordance with the law, the prime minister told the annual meeting of the finance, planning and investment sector on Friday.

“There must be a focus on investment ‘priorities’ to ensure effectiveness in accordance with the budget law,” he told the meeting.
This would help prevent the accumulation of even more debt, he added.
The prime minister’s advice comes after reports emerged that state investment in many projects in recent years had failed to fully yield fruit.
There was no proper bidding process before contracts were awarded for some projects, resulting in the amount invested being unreasonably high, while many projects were deemed unnecessary.
Such issues have enlarged the budget deficit and debt has spiralled to a high level. Wasteful spending has created budgetary tension and the Covid-19 pandemic has worsened Laos’ fragile economy.
PM Thongloun told the meeting that steps to address financial and economic difficulties would be outlined in the national agenda for the coming years. 
He asked participants to suggest recommendations to address the current difficulties and submit them to the government for consideration.
The premier, who was recently elected as Party Secretary General – the top post in the Lao People’s Revolutionary Party – said the Party Central Committee and Politburo (the top political body) would also hold talks to outline measures to address the difficulties..
The government would also seek recommendations from scholars, experts and think tanks in this regard.
Such collective action is needed to prevent an economic crisis, he said.
He told the meeting to translate the resolution adopted by the recent 11th Party Congress into the finance and socio-economic development plan.
Specifically, the prime minister underlined the need to do more to streamline procedures that would improve the business environment.
“There have been repeated talks about this (by the government) but there are still complaints,” he said.
“We are increasingly relying on private and foreign investment to generate income. We have agreed to encourage investment that supports both domestic supplies and exports to facilitate them quickly.”
Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy, Deputy Prime Minister and Minister of Planning and Investment, Dr Sonexay Siphandone, and relevant officials attended the two-day meeting.
Mr Thongloun asked the meeting to follow the investment promotion plan, for which he had previously given guidance, concerning investment promotion along the under-construction Laos-China railway, which is set for completion at the end of this year.
Participants were told to introduce conditions that would encourage foreign investors to partner with Lao entrepreneurs in various areas of business.
He also told the meeting to maximise revenue collection while tightening up spending, especially with regard to the purchase of vehicles. The prime minister stressed the need to address what it is commonly referred to as “ill issues” within the finance sector, a clear nod to revenue losses because of embezzlement by corrupt officials. Given that almost every state-owned enterprise is making a loss, the prime minister asked for reform, including through cooperation with foreign partners.   
“This must be addressed. There must be reform,” he told the meeting.
He suggested learning lessons from Chinese and Vietnamese state-owned enterprises, as they are very profitable.
The prime minister underlined the need to better manage the high inflation rate, fluctuating currency exchange rates, the gap in the exchange rate between banks and other markets, domestic debt repayment, and the slow implementation of some mining and hydropower projects.

By Souksakhone Vaenkeo
(Latest Update February 8, 2021)