Mining remains top foreign exchange earner
Mining remains top foreign exchange earner
Mining remains the top foreign exchange earner for Laos despite the halt of Sepon gold mining operations at the end of last year.
According to the Lao Economic Outlook, which was officially released earlier this month, total exports from Laos in 2013 were valued at US$2.4 billion, a 6 percent increase compared to the previous year.
Some 41 percent of the exports were mining products, becoming the largest foreign exchange earner in the countr y.
Sepon mine, one of the largest mines in Laos stopped gold production at the end of 2013, forcing the company to lay off about 4,000 workers. The halt of the mine also caused a slow down of the Lao economy this year.
The second largest foreign exchange earner was the hydropower sector, which contributed 21 percent of the total export value.
The garment industry is the third largest foreign export earner contributing 8 percent. Tourism and agriculture products are also important foreign exchange earners for Laos.
Economists said the export value of mining products will remain as the top foreign exchange earner for a while but will continue to decline if the government does not open new mining operations in the country.
The government is reviewing its mining investment policy and hopes to resume new mining investment projects after 2015.
They said that one of the major driving forces of the Lao economy in the future would be hydropower as a number of power plants are now under feasibility study and construction stages.
Laos has the potential to build dams with combined electricity generation capacity of about 28,000WM.
At present, the country has combined power generation capacity of about 3,000 MW and most of the power is exported to a neighbouring country.
The output of manufacturing goods will also increase in the future as a number of foreign companies have relocated their production base to Laos to produce vehicle and machinery spare parts for export.
The Economic Outlook, which was commissioned by the Ministry of Planning and Investment and the Lao National Economic Research Institute, also shows the value of imports into the country in 2013 was US$2.51 billion, causing a US$224 million trade deficit.
Half of the value was from the import of capital goods and the rest was consumer goods. The most imported goods were construction materials, machinery and vehicles.
Many people have expressed concern over the rising value of imports as it will cause a rapid decline of foreign reserves.
However, economists said that the trade deficit was not due to increasing domestic consumption but growing investment in the hydropower industry.
vientiane times
