More investment, inflow of foreign currency needed: Govt

The government has vowed to do more to attract more high-quality foreign investment and ensure that more foreign currency flows into Laos.
A three-day open government meeting, which wrapped up in Vientiane on Thursday, approved key measures and policies to address economic challenges and create favourable conditions to ensure that foreign currency earned from investment and exports enters Laos through the banking system.

PM Dr Sonexay Siphandone and other cabinet members at the government meeting wrapped up on Thursday.

The meeting was chaired by Prime Minister Dr Sonexay Siphandone and attended by cabinet members, the Mayor of Vientiane, provincial governors, and representatives of various state agencies.
The government acknowledged that one of the main challenges for Laos is that the amount of money sourced from foreign investment and circulates through the banking system is much less than the agreed value of investments.
In addition, only a little more than 30 percent of export receipts enter the country through the banking system.
The meeting agreed to take additional steps to improve the investment climate in Laos and apply lessons learned from other countries to boost high quality investment and regulate the payment of foreign currency earned from investment and exports.
Cabinet members agreed to respond robustly to all issues arising in relation to investment, especially concerning approved overlapping areas of land for mining projects, the government spokesperson and Deputy Head of the Prime Minister’s Office, Mrs Thipphakone Chanthavongsa, told a news conference shortly after the meeting ended on Thursday.
The government also pledged to tackle tax evasion on the part of investors, as well as unpaid concession fees, ghost projects, and issues linked to social and environmental impacts.
Mrs Thipphakone said the government would also review the effectiveness of mining projects including pilot projects, with the assessment to be completed by the end of this month.
The review aims to ensure that mining operations are yielding sufficient benefits for Laos.
According to a report from the Ministry of Planning and Investment, the value of minerals to be mined in the first six months of 2023 was projected at 10,805 billion kip, an increase of 10.8 percent compared to the same period last year.
Mining authorities plan to amass US$2.8 billion in revenue to contribute to the government’s budget by 2030, an increase of 40 percent compared to the figure for 2011-2020.
Cabinet members also discussed the country’s pressing economic issues, particularly skyrocketing inflation, depreciation of the kip, currency exchange rates, high level of public debt, the labour shortage, and outflow of workers to other countries.
The meeting agreed to address these issues more robustly, as part of the government’s efforts to deal with persistent economic and financial concerns.
The government will continue to push for economic growth and job creation, as well as encourage a higher level of production so that more goods can be produced in Laos to replace the high volume of imported goods.

By Somsack Pongkhao
 (Latest Update July 7, 2023)