Lao export strategy unveiled
Lao export strategy unveiled
The Lao government has to provide both policy and financial support to help businesses in Laos produce at least three new export products in 2015 to control the trade deficit and sustain economic growth.
Ministry of Industry and Commerce officials said last week that the government had approved the Manufacturing and Trade Strategy, aiming to provide direction for the government to establish a policy and financial support for the sectors concerned to boost development of the processing industry sector in the country over the next 10 years.
According to the strategy, Laos will have to establish at least three more export products by 2015 and another three by 2020, aiming to generate foreign exchange for the country and reduce the trade deficit to secure sustainable economic growth.
At present, there are six major foriegn exchange earners: mining, electricity, garments, wood and wood products, agricultural produce and tourism.
Over the first six months of the 2011/2012 fiscal year, Laos' exports reached US$837 million while imports were over US$1 billion, causing a major trade deficit of US$166 million.
Despite the opinion of trade officials who said that the large deficit was due to a growing influx of capital goods, industry and trade strategy makers said that the country has to establish permanent export products to secure sustainable growth of the Lao economy.
At present, the country relied heavily on the export of mining produce, which one day would be exhausted, posing challenges for the future growth of the Lao economy.
The manufacturing and trade sector also urged the government to produce non resource based products to account for at least 30 percent of the total export value in 2015 and 50 percent in 2020.
The strategy recommends that the government has to set targets of maintaining a trade balance in 2015 and gaining a trade surplus in 2020 as one of the first steps to secure sustainable economic growth.
To achieve the targets, the government must ensure that the processing industry and handicraft sector of Laos will have to see at least 12-13 percent growth annually from 2011 to 2015, accounting for 23 percent of GDP in 2015 and 25 percent in 2020.
The country will also have to see at least 11 percent growth in domestic trade annually from 2011 to 2015 and 12 percent growth annually from 2016 to 2020.
Laos will also have to produce goods for domestic consumption and the government has to provide both a policy and financial support to produce goods such as cement, medicines and animal feeds to cover 30 percent of the total import value in 2015 and 50 percent in 2020.
vientiane times
