The Banking and Financial Sector of Lao PDR : Financial Sector Note
During the second half of the 1980s, Lao PDR embarked on an ambitious program of economic reforms, called the New Economic Mechanism, whose main purpose was to gradually transform its centrally-planned economy into a market-oriented economy. The in...
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| Format: | Economic & Sector Work |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2002/07/23851589/banking-financial-sector-lao-pdr-financial-sector-note http://hdl.handle.net/10986/21556 |
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okr-10986-21556 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ACCOUNTING FRAMEWORK ACCOUNTING STANDARDS AMOUNT OF LOANS ASSET CLASSIFICATION AUCTIONS BALANCE SHEET BALANCE SHEETS BANK FINANCING BANK RATE BANK SUPERVISION BANKING ASSETS BANKING INSTITUTIONS BANKING MARKET BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKRUPTCY LAW BIDS BONDS BROAD MONEY BUDGET DEFICIT BUDGET DEFICITS BUSINESS PLANNING CAPITAL ACCOUNT CAPITAL ACCOUNT TRANSACTIONS CAPITAL ADEQUACY CAPITAL ALLOCATION CAPITAL MARKETS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANK INDEPENDENCE CERTIFICATE OF DEPOSITS CERTIFICATES OF DEPOSITS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANKING COMMERCIAL BANKS CONTINGENT LIABILITIES CREDIT AVAILABILITY CREDIT PROGRAMS CREDIT RISK CREDIT RISKS CRISIS COUNTRIES CURRENCY CURRENCY BOARD DEBT OBLIGATIONS DEBTS DEFICIT FINANCING DEPOSIT DEPOSIT INSURANCE DEPOSIT MOBILIZATION DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DIRECTED CREDIT DISBURSEMENTS DISCLOSURE REQUIREMENTS DOMESTIC CREDIT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC LIBERALIZATION ECONOMIC TRANSACTIONS EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL HEALTH FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SECTOR DEVELOPMENT FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FISCAL POLICY FIXED ASSETS FLOATING EXCHANGE RATE FOREIGN CAPITAL FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET FOREIGN INVESTMENT FOREIGN INVESTORS GOVERNMENT ACCOUNTING SYSTEM GOVERNMENT BUDGET GOVERNMENT DEFICITS GOVERNMENT SECURITIES GOVERNMENT SECURITY GROSS DOMESTIC PRODUCT HOLDING HOLDINGS INFLATION INFLATION RATE INFLATIONARY PRESSURES INFORMAL LENDERS INFORMATION ASYMMETRY INFORMATIONAL ASYMMETRY INSTRUMENT INSURANCE COMPANY INSURANCE INDUSTRY INTEREST BURDEN INTEREST COSTS INTERNAL AUDIT INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL SETTLEMENTS ISSUANCE JUDICIAL ENFORCEMENT JUDICIAL PROCESS LACK OF TRANSPARENCY LEGAL FRAMEWORK LEGAL SYSTEM LENDER LENDER OF LAST RESORT LENDING DECISIONS LENDING INTEREST RATES LEVEL OF INFLATION LIABILITY LIFE INSURANCE LIQUIDITY LOAN LOAN PORTFOLIOS LOCAL BUSINESS LONG TERM ASSETS LOSS STATEMENTS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MARK TO MARKET MARKET ECONOMY MARKET INFRASTRUCTURE MARKET INSTRUMENT MARKET MECHANISM MARKET SHARE MATURITY MICROFINANCE MONETARY AUTHORITIES MONETARY CONTROL MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL SAVING NON-PERFORMING LOANS OUTSTANDING LOAN PAYMENT SYSTEM POLITICAL STABILITY PRICE STABILITY PRIVATE BANKS PRIVATE INVESTMENTS PRODUCTIVE INVESTMENTS PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC FINANCE PUBLIC INVESTMENT PUBLIC INVESTMENTS REAL INTEREST REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RESERVES RETURN RETURNS REVOLVING FUNDS RISK MANAGEMENT SAVINGS DEPOSITS SAVINGS RATE SAVINGS RATES SECONDARY TRADING SHARE OF CREDIT SHAREHOLDER SOLVENCY STATE BANK STOCK EXCHANGE STOCK MARKET STOCK MARKETS T-BILLS TAX TAX DEDUCTION TAX SYSTEM TRADE LIBERALIZATION TRADING TRANSACTION TRANSACTION COSTS TREASURY TREASURY BILL TREASURY BILL AUCTIONS TREASURY BILLS TURNOVER UNDERLYING ASSET VALUATION |
| spellingShingle |
ACCOUNTING ACCOUNTING FRAMEWORK ACCOUNTING STANDARDS AMOUNT OF LOANS ASSET CLASSIFICATION AUCTIONS BALANCE SHEET BALANCE SHEETS BANK FINANCING BANK RATE BANK SUPERVISION BANKING ASSETS BANKING INSTITUTIONS BANKING MARKET BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKRUPTCY LAW BIDS BONDS BROAD MONEY BUDGET DEFICIT BUDGET DEFICITS BUSINESS PLANNING CAPITAL ACCOUNT CAPITAL ACCOUNT TRANSACTIONS CAPITAL ADEQUACY CAPITAL ALLOCATION CAPITAL MARKETS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANK INDEPENDENCE CERTIFICATE OF DEPOSITS CERTIFICATES OF DEPOSITS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANKING COMMERCIAL BANKS CONTINGENT LIABILITIES CREDIT AVAILABILITY CREDIT PROGRAMS CREDIT RISK CREDIT RISKS CRISIS COUNTRIES CURRENCY CURRENCY BOARD DEBT OBLIGATIONS DEBTS DEFICIT FINANCING DEPOSIT DEPOSIT INSURANCE DEPOSIT MOBILIZATION DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DIRECTED CREDIT DISBURSEMENTS DISCLOSURE REQUIREMENTS DOMESTIC CREDIT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC LIBERALIZATION ECONOMIC TRANSACTIONS EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL HEALTH FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SECTOR DEVELOPMENT FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FISCAL POLICY FIXED ASSETS FLOATING EXCHANGE RATE FOREIGN CAPITAL FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET FOREIGN INVESTMENT FOREIGN INVESTORS GOVERNMENT ACCOUNTING SYSTEM GOVERNMENT BUDGET GOVERNMENT DEFICITS GOVERNMENT SECURITIES GOVERNMENT SECURITY GROSS DOMESTIC PRODUCT HOLDING HOLDINGS INFLATION INFLATION RATE INFLATIONARY PRESSURES INFORMAL LENDERS INFORMATION ASYMMETRY INFORMATIONAL ASYMMETRY INSTRUMENT INSURANCE COMPANY INSURANCE INDUSTRY INTEREST BURDEN INTEREST COSTS INTERNAL AUDIT INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL SETTLEMENTS ISSUANCE JUDICIAL ENFORCEMENT JUDICIAL PROCESS LACK OF TRANSPARENCY LEGAL FRAMEWORK LEGAL SYSTEM LENDER LENDER OF LAST RESORT LENDING DECISIONS LENDING INTEREST RATES LEVEL OF INFLATION LIABILITY LIFE INSURANCE LIQUIDITY LOAN LOAN PORTFOLIOS LOCAL BUSINESS LONG TERM ASSETS LOSS STATEMENTS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MARK TO MARKET MARKET ECONOMY MARKET INFRASTRUCTURE MARKET INSTRUMENT MARKET MECHANISM MARKET SHARE MATURITY MICROFINANCE MONETARY AUTHORITIES MONETARY CONTROL MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL SAVING NON-PERFORMING LOANS OUTSTANDING LOAN PAYMENT SYSTEM POLITICAL STABILITY PRICE STABILITY PRIVATE BANKS PRIVATE INVESTMENTS PRODUCTIVE INVESTMENTS PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC FINANCE PUBLIC INVESTMENT PUBLIC INVESTMENTS REAL INTEREST REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RESERVES RETURN RETURNS REVOLVING FUNDS RISK MANAGEMENT SAVINGS DEPOSITS SAVINGS RATE SAVINGS RATES SECONDARY TRADING SHARE OF CREDIT SHAREHOLDER SOLVENCY STATE BANK STOCK EXCHANGE STOCK MARKET STOCK MARKETS T-BILLS TAX TAX DEDUCTION TAX SYSTEM TRADE LIBERALIZATION TRADING TRANSACTION TRANSACTION COSTS TREASURY TREASURY BILL TREASURY BILL AUCTIONS TREASURY BILLS TURNOVER UNDERLYING ASSET VALUATION Asian Development Bank World Bank The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| geographic_facet |
East Asia and Pacific Lao People's Democratic Republic |
| description |
During the second half of the 1980s, Lao
PDR embarked on an ambitious program of economic reforms,
called the New Economic Mechanism, whose main purpose was to
gradually transform its centrally-planned economy into a
market-oriented economy. The initial reform momentum lasted
about one decade. The far-reaching reform program
encompassed many critical components including: (a)
promotion of private production through improved incentives;
(b) institutional infrastructure to improve market economy
operations; (c) the strengthening of Lao comparative
advantages through trade liberalization and further
specialization; and (d) the establishment of price stability
through macroeconomic policy measures. The systemic changes
introduced in Lao PDR have contributed to a significant
transformation of the country s economic system, away from a
rigorously centrally-planned economy and towards a form of
market economy based on private ownership. The percentage of
poor declined based on the national poverty line from 45 to
39 percent between 1992-93 and 1997-982. But the percentage
of very poor did not decline and remained at slightly above
30 percent evidencing the need for even broader and faster
growth. Moreover, several factors slowed down the economic
liberalization process. Such factors included the lack of
transparency in government-business relations, a weak civil
society, the position of some interest groups at the
national and provincial levels, and the existence of
noncompetitive economic structures with a few firms and
actors accounting for a large share of domestic production
(except in agriculture). In some areas, reform policy
stagnated and is lagging. This is the case in the financial
sector. The creation of a two-tier banking system in the
early 1990s with separate and well-defined functions for the
central bank and the state-owned commercial banks, has not
resulted in the expected benefits: Lao PDR is still
suffering from chronic macroeconomic instability and the
state-owned commercial banks are suffering from a large
amount of non-performing loans. Taking into consideration
the objective of the Lao leaders to improve the well-being
of the Lao People, this paper argues that there are valid
reasons for establishing rules that discipline the political
influence on the design and conduct of economic policy, and
more specifically, policy regulating the financial sector. |
| format |
Economic & Sector Work |
| author |
Asian Development Bank World Bank |
| author_facet |
Asian Development Bank World Bank |
| author_sort |
Asian Development Bank |
| title |
The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| title_short |
The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| title_full |
The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| title_fullStr |
The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| title_full_unstemmed |
The Banking and Financial Sector of Lao PDR : Financial Sector Note |
| title_sort |
banking and financial sector of lao pdr : financial sector note |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2002/07/23851589/banking-financial-sector-lao-pdr-financial-sector-note http://hdl.handle.net/10986/21556 |
| _version_ |
1764448553194749952 |
| spelling |
okr-10986-215562021-04-23T14:04:02Z The Banking and Financial Sector of Lao PDR : Financial Sector Note Asian Development Bank World Bank ACCOUNTING ACCOUNTING FRAMEWORK ACCOUNTING STANDARDS AMOUNT OF LOANS ASSET CLASSIFICATION AUCTIONS BALANCE SHEET BALANCE SHEETS BANK FINANCING BANK RATE BANK SUPERVISION BANKING ASSETS BANKING INSTITUTIONS BANKING MARKET BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKRUPTCY LAW BIDS BONDS BROAD MONEY BUDGET DEFICIT BUDGET DEFICITS BUSINESS PLANNING CAPITAL ACCOUNT CAPITAL ACCOUNT TRANSACTIONS CAPITAL ADEQUACY CAPITAL ALLOCATION CAPITAL MARKETS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANK INDEPENDENCE CERTIFICATE OF DEPOSITS CERTIFICATES OF DEPOSITS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANKING COMMERCIAL BANKS CONTINGENT LIABILITIES CREDIT AVAILABILITY CREDIT PROGRAMS CREDIT RISK CREDIT RISKS CRISIS COUNTRIES CURRENCY CURRENCY BOARD DEBT OBLIGATIONS DEBTS DEFICIT FINANCING DEPOSIT DEPOSIT INSURANCE DEPOSIT MOBILIZATION DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DIRECTED CREDIT DISBURSEMENTS DISCLOSURE REQUIREMENTS DOMESTIC CREDIT DOMESTIC DEBT ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC LIBERALIZATION ECONOMIC TRANSACTIONS EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATES EXPENDITURE EXPENDITURES FINANCES FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL HEALTH FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SECTOR DEVELOPMENT FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FISCAL POLICY FIXED ASSETS FLOATING EXCHANGE RATE FOREIGN CAPITAL FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET FOREIGN INVESTMENT FOREIGN INVESTORS GOVERNMENT ACCOUNTING SYSTEM GOVERNMENT BUDGET GOVERNMENT DEFICITS GOVERNMENT SECURITIES GOVERNMENT SECURITY GROSS DOMESTIC PRODUCT HOLDING HOLDINGS INFLATION INFLATION RATE INFLATIONARY PRESSURES INFORMAL LENDERS INFORMATION ASYMMETRY INFORMATIONAL ASYMMETRY INSTRUMENT INSURANCE COMPANY INSURANCE INDUSTRY INTEREST BURDEN INTEREST COSTS INTERNAL AUDIT INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL SETTLEMENTS ISSUANCE JUDICIAL ENFORCEMENT JUDICIAL PROCESS LACK OF TRANSPARENCY LEGAL FRAMEWORK LEGAL SYSTEM LENDER LENDER OF LAST RESORT LENDING DECISIONS LENDING INTEREST RATES LEVEL OF INFLATION LIABILITY LIFE INSURANCE LIQUIDITY LOAN LOAN PORTFOLIOS LOCAL BUSINESS LONG TERM ASSETS LOSS STATEMENTS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MARK TO MARKET MARKET ECONOMY MARKET INFRASTRUCTURE MARKET INSTRUMENT MARKET MECHANISM MARKET SHARE MATURITY MICROFINANCE MONETARY AUTHORITIES MONETARY CONTROL MONETARY FUND MONETARY POLICIES MONETARY POLICY NATIONAL SAVING NON-PERFORMING LOANS OUTSTANDING LOAN PAYMENT SYSTEM POLITICAL STABILITY PRICE STABILITY PRIVATE BANKS PRIVATE INVESTMENTS PRODUCTIVE INVESTMENTS PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC FINANCE PUBLIC INVESTMENT PUBLIC INVESTMENTS REAL INTEREST REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RESERVES RETURN RETURNS REVOLVING FUNDS RISK MANAGEMENT SAVINGS DEPOSITS SAVINGS RATE SAVINGS RATES SECONDARY TRADING SHARE OF CREDIT SHAREHOLDER SOLVENCY STATE BANK STOCK EXCHANGE STOCK MARKET STOCK MARKETS T-BILLS TAX TAX DEDUCTION TAX SYSTEM TRADE LIBERALIZATION TRADING TRANSACTION TRANSACTION COSTS TREASURY TREASURY BILL TREASURY BILL AUCTIONS TREASURY BILLS TURNOVER UNDERLYING ASSET VALUATION During the second half of the 1980s, Lao PDR embarked on an ambitious program of economic reforms, called the New Economic Mechanism, whose main purpose was to gradually transform its centrally-planned economy into a market-oriented economy. The initial reform momentum lasted about one decade. The far-reaching reform program encompassed many critical components including: (a) promotion of private production through improved incentives; (b) institutional infrastructure to improve market economy operations; (c) the strengthening of Lao comparative advantages through trade liberalization and further specialization; and (d) the establishment of price stability through macroeconomic policy measures. The systemic changes introduced in Lao PDR have contributed to a significant transformation of the country s economic system, away from a rigorously centrally-planned economy and towards a form of market economy based on private ownership. The percentage of poor declined based on the national poverty line from 45 to 39 percent between 1992-93 and 1997-982. But the percentage of very poor did not decline and remained at slightly above 30 percent evidencing the need for even broader and faster growth. Moreover, several factors slowed down the economic liberalization process. Such factors included the lack of transparency in government-business relations, a weak civil society, the position of some interest groups at the national and provincial levels, and the existence of noncompetitive economic structures with a few firms and actors accounting for a large share of domestic production (except in agriculture). In some areas, reform policy stagnated and is lagging. This is the case in the financial sector. The creation of a two-tier banking system in the early 1990s with separate and well-defined functions for the central bank and the state-owned commercial banks, has not resulted in the expected benefits: Lao PDR is still suffering from chronic macroeconomic instability and the state-owned commercial banks are suffering from a large amount of non-performing loans. Taking into consideration the objective of the Lao leaders to improve the well-being of the Lao People, this paper argues that there are valid reasons for establishing rules that discipline the political influence on the design and conduct of economic policy, and more specifically, policy regulating the financial sector. 2015-03-09T18:28:50Z 2015-03-09T18:28:50Z 2002-07-15 http://documents.worldbank.org/curated/en/2002/07/23851589/banking-financial-sector-lao-pdr-financial-sector-note http://hdl.handle.net/10986/21556 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Policy Note East Asia and Pacific Lao People's Democratic Republic |