Senior economist backs mining investment freeze
Senior economist backs mining investment freeze
The economy will not see a downturn over the next few years if the government decides to stop granting permission for new mining investments, according to a senior economist.
“There will be no impact on our economy in the short term if the government stops giving permission for new mining projects this year,” Lao National Economic Research Institute Director General, Dr Liber Libouapao, said on Wednesday.
He made the comment after the Ministry of Planning and Investment suggested to Prime Minister Thongsing Thammavong on Tuesday that no more proposals for investment in the mining sector be accepted. Companies that have already been given the green light to conduct economic feasibility studies for mining projects can continue as planned.
Economic growth has stayed above 7.5 percent over the past five years, with mining as the main driving force. The proposal to rein in the industry has caused concerns that it could result in a slowdown.
Prime Minister Thongsing spoke to investment officials at the second private investment promotion and management workshop in Vientiane on Tuesday, but did not comment on the ministry's proposal to curb investment in the mining sector. The prime minister focused on ways to encourage more businesses to invest in the non resource sector.
Dr Liber said the government had already given permission for several mining projects to go ahead in recent years and should now concentrate on ensuring that investors carry out these projects instead of continuing to allow new ones to be set up.
If these companies proceed with their projects, the economy will continue to grow over the next five years. But he admitted the economy could slow in the long term if the country is unable to source more investment in the non resource sector.
Dr Liber said that cutting off investment in the mining industry would force Laos to boost private investment in the non resource sector to secure stable growth. He noted that it is Party and government policy to reduce investment in the development of natural resources and boost investment in the non resource sector to ensure sustainable growth.
The Ministry of Planning and Investment is recommending that the government promote private investment in agribusiness, the processing industry, education, health and tourism, which have high investment potential.
Dr Liber warned it would not be easy for the government to divert investment from the resource to the non resource sector, pointing out that low education standards and a largely unskilled workforce were major challenges in this regard.
Laos needs experienced businesspeople, a skilled workforce, infrastructure and sufficient investment funding to boost private participation in the development of the non resource sector, he said.
The government is increasing the budget available for education, hoping to provide skilled workers to meet the demands of the growing number of local and foreign investors. But the government is struggling to improve education and train personnel, despite the increasing number of state and private schools.
vientiane times
