Government of Lao PDR Holds an Executive Level Meeting of Macroeconomics Sector Working Group
Vientiane, 19 November 2019 – The Government of Lao PDR through the Ministry of Planning and Investment with support from Asian Development Bank (ADB) and the World Bank (WB) convened an executive level meeting of Macroeconomics Working Group as part of the preparation for the 2019 Round Table Implementation Meeting. This executive meeting is chaired by madam Khamchanh Vongseneboun, Vice Minister of Planning and Investment, co-chaired by Mr. Yasushi Negishi, Asian Development Bank (ADB) in Lao PDR and Mr. Nicola Pontara, the World Bank (WB) in Lao PDR. More than 70 participants, representing government ministries, LCCI, development partners, private sector, civil society and other stakeholders, attended this important meeting.
The objectives of this meeting is to consult with relevant stakeholders and development partners on issues, priorities and various measures for the implementation of the 8th NSEDP (2016-2020) during the remaining period and to identify lessons learnt which will provide valuable insights and suggestions for formulating the 9th NSEDP (2021-2025). The aim is to reflect reality and local context and to identify possible corrective actions to address various national challenges in order to ensure achievement of the national development targets.
As part of an opening remarks, Madam Khamchanh Vongseneboun highlighted that in 2019, Lao economic growth is expected to be around 6.4% which is below the target of 0.3% (6.7% as target). This is a result of the Lao PDR’s economy which is under pressure from a relatively challenging regional and international environment that directly and indirectly affects progress towards key plan targets. This includes: (i) political uncertainty in several large world economies; (ii) fluctuations in global fuel and food prices; and (iii) growing trend towards trade protectionism and possible retaliation among developed countries. At the same time, domestic context has been putting pressure on the growth. For instance, revenue has fallen short of plan targets and revenue collection has been constrained. Inflation and low level of foreign reserve have also been posting a challenge. At the same time, there are increased incidences of natural disasters across the region. Lao PDR remains susceptible to disasters, most clearly evidenced by the 2018 and 2019 flooding that affected almost provinces across the northern, central, and southern parts of the country. These events will affect dramatically progress towards various sectors. The Government in collaboration with local authorities, development partners, neighboring countries and other stakeholders has committed to ensure that there are measures in place to help all affected communities.
Madam chair also highlighted that for 2018 review, Lao PDR fulfilled eligibility criteria for the first time. The country met the graduation threshold for the first time, above Gross National Income (GNI) and Human Assets Index (HAI) thresholds but below Economic Vulnerability Index (EVI). In any case, this reflect Lao economy is vulnerable to risks. Therefore, whether the country is eligible or not, it is very important to keep working on reinforcing all of those criteria in order for its vulnerabilities to be reduced, its development to be sustainable and LDC graduation to occur smoothly. On the SDG localization and implementation in Asia and Pacific, SDG 8, SDG 13 and SDG 16 are not progressing well enough. Lao PDR was currently ranked 111 on the SDG index and 9 across the ASEAN countries.
This requires structural economic transformation which is central to the vision of the 8th NSEDP and anchors the Government’s long-term sustainable growth strategy targeting non-resource based industrialization, productive capacity building, and reduced economic vulnerabilities. In addition, there is a need to improve social protection, living standard, health and education. Linking budgeting and planning is also important and at the same time, there is a need to strengthen M&E activities to monitor and report on results and outcomes of the plan.
Participants highly appreciate the ownership and commitment of the Government and they also remain committed to continue their support to and to strengthen the result-based planning process in Lao PDR. The meeting was carried out in an interactive mode where constructive comments and suggestions were made. Key discussion points were also highlighted at the end of the meeting in order to identify key measures and corrective actions for the remaining period of the plan. The meeting was concluded at noon.