GDP growth cut will not cost jobs, economists say
GDP growth cut will not cost jobs, economists say
The unemployment rate in Laos is not expected to see a significant rise despite the fact the government has revised the GDP growth target downwards for next fiscal year, according to a senior economist.
The Lao National Economic Research Institute Director General, Dr Leeber Leebouapao told Vientiane Times yesterday that the government's decision to lower the GDP growth target from 8 percent to 7.5 percent next fiscal year will not cause a big impact on job opportunities for Lao citizens.
“The government has to lower the GPD growth target, partially due to the fact that it has cut the investment budget for public infrastructure in the country,” he said. However he noted that most Lao people are not employed in the construction sector therefore it will not cause huge impacts on local people.
About 70 percent of the Lao population of working age is employed in the agricultural sector or in the service industry, while the industrial sector also provides job opportunities for Lao people in areas such as garment making.
The industry and service sector has seen rapid growth in recent years but the majority of the Lao labour force still remains in the agricultural sector, many of whom by choice.
Overt the past few years, the government has borrowed money from banks, donors and individuals to accelerate the improvement of public infrastructure as part of efforts to welcome the Asean Economic Community (AEC) in 2015.
However the government had to import labourers from neighbouring countries in order to complete the projects on schedule due to a shortage of available labour locally.
“Laos is different from other countries which normally face rising unemployment if they have to lower their GDP growth forecast. One of the facts is that Laos is actually facing a labour shortage to maintain economic growth at 7.5 percent,” Dr Leeber said, adding that the 7.5 percent economic growth target is still very high compared to other countries in the region.
He said that a number of mega investment projects were importing foreign labourers as they could not recruit people locally, and that sourcing adequate skilled labour will remain a challenge for the country in the years to come.
“Rubber plantations in the southern province still need a labour force,” he said.
According to a report from the Ministry of Planning and Investment, it expects that the unemployment rate will not see a rise of more than 2 percent next fiscal year despite the fact the government has lowered the GDP growth target from 8 to 7.5 percent.
The government expects to supply 68,700 skilled labourers to meet demand from investors and employers next fiscal year.
Many observers say that one of the major challenges going forward is that Laos needs to secure a supply of skilled labour to meet the demand of the growing number of investment projects as currently many labourers are being recruited from neighbouring countries instead.
vientiane times
