Govt urged to prioritise education, infrastructure development
Govt urged to prioritise education, infrastructure development
Although the Lao economy grew by 7.02 percent last year, the country is still heavily reliant on investment in the resource sector, although it is inevitable that mineral resources will one day be depleted.
Given the slower growth of agriculture, it is considered acceptable for the government to further excavate minerals to sustain economic growth.
Nevertheless, economists urge the government to ensure the effective use of revenue generated by this sector, saying it should be used to fund education, infrastructure and healthcare services.
DrManaSouthichak is an independent economist who has done a lot of research for the government, international organisations, and private companies.
“One of Laos’ biggest problems is a lack of infrastructure, particularly good roads, to facilitate economic growth. Our existing roads are too narrow which drives up the cost of transport,” he said.
DrMana likened roads to blood vessels, saying they were essential to successful logistics and productivity.
He also highlighted the importance of education and vocational training as part of efforts to enable Laos to benefit from regional integration.
“If more Lao people get a higher education, they can apply their knowledge to boost productivity, which is an important driver of economic growth,” he said.
In recent years, a huge quantity of minerals has been excavated but these operations have not generated as many jobs for Lao citizens as anticipated.
In Khammuan province, most investment is in mining, particularly the excavation of potassium, lead and other minerals.
Although mining is increasingly popular among Chinese and Vietnamese investors in Khammuan, agriculture has not grown as anticipated.
DrMana said growing crops on a commercial basis was not easy as it required specialised knowledge, sound marketing strategies, and good quality products.
A senior economist at the National Economic Research Institute, DrLeeberLeebuapao, said people in Laos traditionally grow crops solely for their own consumption and sell any surplus to markets.
“To export within the region, we need to produce on large-scale farms so we can ensure that the quantity and quality of crops matches the demands and orders of consumers,” he added.
To accomplish this, DrLeeber said, Laos needs to attract foreign investment into the farming sector. This would result in the utilisation of modern machinery and techniques so that higher productivity will boost exports.
Economists have also called for the government to carry out land reform, ensuring that more land is used to grow crops for export.
Another challenge is that neighbouring countries like Vietnam and Thailand are themselves major agriculture exporters so Laos needs to ensure its products are of high quality and large volume, and can compete in price.
