Industrial sector growing but not as fast as expected: economist
Industrial sector growing but not as fast as expected: economist
The government's policy to encourage the industrialisation of Laos' economy is resulting in changes to the country's economic makeup, with the industrial sector gradually growing while agriculture, forestry and the service sector decline.
The agriculture industry has continued to decline sharply, making up 34.9 percent of GDP in the 2004-5 fiscal year, declining to 28.9 percent in 2009-10 and dropping further to 23.5 percent in 2014-15, according to a report from the Ministry of Planning and Investment.
Meanwhile, the industrial sector represented 21.4 percent of GDP in 2004-5, rising to 25.6 percent in 2009-10 and is expected to reach 33.8 percent in 2014-15.
A senior economist at the Lao National Economic Research Institute, Dr Liber Leebouapao, told Vientiane Times yesterday that although the industrial sector was continuing to grow it had not progressed as fast as anticipated.
Dr Liber said between 2002 and 2009 the average growth in the industrial sector was about 14 percent but since 2010 the growth rate had declined to about 7 or 8 percent.
He attributed the slowdown to the delay of various investment projects that had signed agreements with the government.
Dr Liber was optimistic the higher growth rate of the industrial sector would resume in the next five years when mega-projects such as the Hongsa Mine-Mouth Power Project and the Xayaboury hydropower project began commercial operation.
Currently, the service sector makes up a high percentage of GDP but trends suggest it will decline in the near future.
In 2004-5 the service sector represented 37.4 percent of the GDP, rising to 39.2 percent in 2009-10 and 44.2 percent in 2012-13. But it will decline to 36 percent in the 2014-15 fiscal year.
Dr Liber explained that when the industrial sector grows faster, the service sector will go down slightly but still remain stronger than the agriculture-forestry sector. More of Laos' labour force is moving from the agriculture sector to the industrial and service sectors after more investments were made in these two areas, according to a report from the ministry.
In 2005, 78.5 percent of the labour force worked in agriculture and forestry, declining to 70 percent in 2010 and expected to decline to 68 percent in 2015.
Laos is one of the least developed countries in Southeast Asia but the government has a policy to move the country towards a basic level of industrialisation and modernisation by 2020.
The government has tried to sustain the economic growth of 8 percent annually to achieve this goal.
Between 2001 and 2010, economic growth was reported at an average of 7.1 percent annually, rising to 8.2 percent annually between 2011 and 2013.
The government needs 247 trillion kip (more than US$30.6 billion) over the five years from 2016-20 to boost economic growth to at least 8 percent annually in order to ensure that Laos can graduate from the UN's list of Least Developed Countries by 2020.
vientiane times
