Lao National Assembly warns govt on possible impacts of high debt

Vientiane (Vientiane Times/ANN) - National Assembly (NA) of Laos has expressed its concern about high public debt in Laos and has warned the government not to operate any projects without its approval.

The Assembly drew up a resolution at the closing ceremony of this month's session on Wednesday, which noted that public debt was already high.

The Assembly asked the government to take this matter into consideration, with members saying that operating projects without NA approval could lead to chronic debt, which may spiral out of control and lead the country into recession.

Spelling out its resolution, the NA asked the Ministry of Planning and Investment to consider any projects that have not yet been approved and put them in the plan for this fiscal year.

Assembly members observed that many provinces allow private companies to develop transport infrastructure using their own capital, which the authorities then repay at a later date.

Government officials de-fended this practice, saying it was important to carry out some projects before seeking NA approval as those projects were very important for the country's development and to sustain local people's livelihoods.

For instance, the Khammuan provincial authorities gave permission for companies to spend 3 billion kip to repair irrigation systems damaged by widespread flooding this year. If the authorities hadn't taken this step, the impact could have been much worse.

Lao economist Dr Liber Libuapao said that allowing private companies to carry out work helped to boost economic growth and national development, but the government needs to prioritise projects that are essential for the well-being of the Lao people.

He agreed that the government can allow companies to help in building irrigation or other infrastructure to facilitate productivity and ease poverty in local communities.

Dr Liber said it was also important that the government identify a source of income to pay off its debts, otherwise the country could run into financial problems.

"The most important thing is that we have to be ready to deal with debt," he said, saying that less important projects should be postponed.

According to the Ministry of Finance, public debt in Laos stands at about 45 percent of Gross Domestic Product (GDP).

Dr Liber said public debt has reached an alarming level and all sectors need to turn their attention to managing the situation.

One of the least developed countries in Asia, Laos started out with no infrastructure following liberation in 1975, so the need for rapid development is great.

This month's NA session also approved an increase in the budget deficit for this fiscal year from 2.1 trillion kip (US$263 million) to 3.21 trillion kip, equating to 4.6 percent of GDP, and an increase in budget expenditure from 17,831 billion kip to 18,977.4 billion kip, to maintain economic growth.

The Lao economy is growing at about 8 percent annually but the country mainly relies on Overseas Development Assistance and natural resources, which are considered unsustainable sources of revenue.

COPYRIGHT: ASIA NEWS NETWORK

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Nonviolent disciplining of kids pushed

    Child rights advocates called on senators to pass and strongly endorse a law that will institutionalize positive and nonviolent methods of disciplining children.The Child Rights Network (CRN), Plan International Philippines (PIP), Philippine Legislators’ Committee on Population and Development (PLPCD), and Lihok Pilipinas Foundation led the call for the enactment of the Positive Discipline Bill.Several Quezon City Council members led by Majority Floor Leader Jesus Manuel Suntay, Victor Ferrer …

  • Method to their madness

    [caption id="attachment_256768" align="alignright" width="212"] Illustration by Rod Cañalita[/caption] EMMANUEL PORTUGAL Country Manager for the Philippines, VMware I look after the garden. I’d like to think that I have a green thumb—no plants have died so far! The ones I like now that I planted a few months ago is the Blue Iris. Like the town in the movie, my Blue Iris shows up in the morning and only appears for one day. …

  • JGFP Summer Tour on today

    The summer tour for local junior golfers kicks off with the holding of the ICTSI-JGFP Baguio Junior Open today and tomorrow at the treacherous Baguio Country Club course in Baguio.Sixty players aged 6 to 17 years old are entered in the 36-hole tourney serving as the opening leg of the summer circuit organized by the Junior Golf Foundation of the Philippines with the International Container Terminal Services, Inc. Foundation as main sponsor. ... …

  • PH now market ready to absorb infra bonds

    The Philippine market is now ready to absorb infrastructure bonds that will be issued by private companies amid a growing pipeline of infra-related projects under the government’s Public-Private Partnership (PPP) program. President Benigno Aquino III last week said the government is still committed to spend more on the country’s infrastructure, with 16 PPP projects currently on the pipeline and nine that have already been awarded. Over the years, some of the country’s biggest infrastructure …

  • Filipinos are saving more – BSP survey

    More Filipinos have the extra cash to save for that proverbial rainy day, according to the Bangko Sentral ng Philippines (BSP). Based on a quarterly survey on consumer confidence, domestic households with savings have the means to increase family reserves and to bring up the amount to historical highs. The central bank said improved family income, a generally positive outlook on the economy, inflation and foreign exchange rates encouraged saving behavior during the first three months of 2015. …

  • AXA Philippines growing alongside its parent firm

    Philippine AXA Life Insurance Corp. is growing side by side with its parent firm, global insurance firm AXA, after posting significant growth in its total premium income amid an increasing market share in the country. A statement showed that in the Philippines, multi-billion firm AXA Group saw P18.35 billion in total premium income. The local entity of AXA, AXA Philippines is a joint venture between AXA Group and the Metrobank Group. In 2014, it saw an increase in market share to 11.6 …

  • End to traffic jam in sight? Japan to lend P4B to PHL for road projects

    The Japanese government will be providing some P4 billion to the Philippines for road projects aimed at decongesting monstrous jams in Metro Manila.Noriaki Niwa, chief representative of the Japan International Cooperation Agency (JICA), said the loan will cover major interchanges to address traffic congestion in Metro Manila, including flyovers, and road links.Among them are the interchanges on EDSA-Roosevelt/Congressional, EDSA-West/North, and C-5-Green Meadows and North/Mindanao Avenue. ... …

  • US won’t provide flexibility for countries interested in TPP

    Washington D.C.—The US government will not provide any flexibility for potential member countries, like the Philippines, in their bid to become part of the Trans-Pacific Partnership (TPP), a senior official said. Economic and Business Affairs Deputy Assistant Secretary William E. Craft, Jr., said all restrictions stated under the TPP trade deal will be maintained and have to be met by the current and future member countries. Earlier, the Department of Trade and Industry (DTI) said that the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options