Economic policy cooperation essential to ensure sustainable growth
VIENTIANE (Vientiane Times/ANN) - To ensure socio-economic development and further sustainable growth, more cooperation is required from every area of government, the private sector and international partners.
This was the message on Tuesday when the Ministry of Finance in cooperation with the International Monetary Fund (IMF) and the World Bank organised a seminar and consultation on Laos’ macroeconomic policies.
The consultation was attended by senior officials from relevant sectors of the government, the private sector and international partners, including economic researchers and policymakers.
Participants discussed the macroeconomy of Laos and the region, risk management, and suggestions for Laos’ economic policies after a presentation by an IMF expert.
Discussions also covered developing and growing hydropower investment while presentations were given by the World Bank on financial risk as well as the Ministry of Finance on fiscal strategy and the plan for budget reform.
The meeting heard that Laos’ real GDP growth remains at 7 percent, supported by exports, but tourism remains sluggish and despite strong economic growth since 2000 the poverty rate is now higher than in neighbouring countries.
Laos’ economic growth is robust and inflation is low, but high public debt and fiscal deficits pose a key risk, macro-financial feedback could propagate external shocks, and policies should focus on reducing fiscal and banking system risks and rebuilding buffers.
Structural reform is of key importance including developing a public investment framework, improving statistics along with investment in education and health.
In response, the government, notably the Ministry of Finance, plans to reform public finance management by complying with international standards.
The reform strategy has two parts, with the first phase from 2018-2020 and second phase from 2021-2025.
Phase I aims to develop a complete set of public finance management infrastructure such as policies, legislation, organisational structure, personnel and management tools while Phase II will develop fiscal stability and step up to international standards, Fiscal Policy and Law Department Director General, Dr Bounleua Sinxayvoravong, told the seminar.
“The implementation plan includes fiscal policy improvement, legal framework development and improvement for the public finance sector, revenue management reform, expenditure management reform, modernisation of the public finance sector and organisational structure, and human resource development,” he said.
IMF and the World Bank are important partners in Laos’ socio-economic development by providing funding and technical assistance to the government in order to contribute to national economic expansion.