Asian Development Bank Upbeat on Lao Economic Growth
With economic growth rates close to 7 percent, Laos is a star in South East Asia, buoyed by investment and business ties with China, the country’s largest investor.
In a new assessment, the Lao government and Asian Development Bank predict the country's good economic fortunes will continue.
The ADB said national output (GDP) should reach 6.9 percent in 2017, and 7 percent in 2018, despite fiscal constraints and weaker global demand for minerals in recent years.
Laos’ ambition as the “battery of South East Asia” has seen development of hydro-power dams with 10 now operating. Three more proposed for the Mekong River are moving forward despite criticism from conservationists because of their environmental impact, especially on fish stocks.
Meanwhile, the Tourism Development Department says tourism contributed $724 million to the national budget in 2016. Visitor arrivals stood at 4.23 million, down from 4.68 million a year earlier, but Laos is spending $61 million to expand Wattay International airport.
China is Laos' largest investor with more than $6.7 billion in 760 projects, according to a report by the Xinhua news agency. Behind China, the other key trade and investment partners are Thailand, Vietnam and Malaysia.
China is also contributing 70 percent of the total cost of the $5.8 billion China-Lao railway. The 410-kilometer segment is part of China’s Kunming-Singapore rail link. The rail link is seen as “crucial in boosting development, generating jobs and income for local people”.
However, analysts say Laos faces high rates of corruption. The Berlin-based Transparency International in 2016 ranked Laos at 123 of 176 nations on its corruption perception index. Stuart-Fox says corruption and the black economy, that disregards government rules, remain major issues.
Holly High, a senior research fellow from Sydney University, says there is also a need for “more venues for political dissent” for public debate on social and economic issues.
"Even when there’s good news, about say economic growth or poverty declining, people are still suspicious because there’s not a lot of trust in the political sphere in Laos,” she said.
ADB Headquarters in Mandaluyong City, Metro Manila, Philippines.
