Country Economic Memorandum : Realizing the Development Potential of Lao PDR, Volume 2. Main Report
To sustain or exceed the 1990s annual average growth rate of 6.3 percent, Lao will need to promote agricultural and manufactured exports, and increase the contribution of natural resources to development. This will require another round of reforms,...
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| Format: | Country Economic Memorandum |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/12/5525048/lao-country-economic-memorandum-realizing-development-potential-lao-pdr-vol-2-2-main-report http://hdl.handle.net/10986/14492 |
| Summary: | To sustain or exceed the 1990s annual
average growth rate of 6.3 percent, Lao will need to promote
agricultural and manufactured exports, and increase the
contribution of natural resources to development. This will
require another round of reforms, and supportive public
spending. These reforms should seek to create a more
enabling environment for the private sector, and for
exports, to raise revenue and maintain macroeconomic
stability, as well as to improve the transparency,
accountability and efficiency of public expenditure
management, and public service delivery. To develop natural
resources and mineral reserves, Lao will need to attract
substantial international and domestic capital to meet the
heavy front-end capital costs required to exploit mineral
deposits. To bring in that investment, however, requires
improvement in governance of the mining sector, particularly
in regard to partnerships with the private sector. Looking
specifically at growth and poverty reduction, three
scenarios for growth - base, base plus and high - show
aggregate GDP growth up to 2015, rising roughly by an annual
average of 4-5 percent, 5-6 percent, and 6-8 percent
respectively. These indicate that this long-term growth will
be driven largely by manufacturing (industry) and services,
with growth from agriculture though important in the initial
years, its contribution declining in the long-term. These
growth scenarios depend very much on the pace and depth of
reforms the country implements. Additionally, rising
government revenues from natural resources alone will not
suffice to meet social needs. On current trends, for
example, per capita recurrent expenditures in health hardly
increase until 2015. The country will need to take
additional revenue measures and reallocate expenditures to
increase recurrent expenditures on social sectors. To be
effective, such revenue and expenditure measures must also
be accompanied by efficient improvements in the service
delivery mechanisms, i.e., increasing the participation of
the poor. |
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