Govt sets high goal for industrial development
Govt sets high goal for industrial development
The government has set the bar high for industrial development in 2017, hoping the sector can contribute a larger percentage of Gross Domestic Product (GDP).
This is aimed at ensuring Laos moves towards modernisation and industrialisation, which can be seen through changes to the country's economic makeup, with the industrial sector expanding and the share contributed by agriculture and forestry on the decline.
Last year, the industrial sector grew at the rate of 9 percent, accounting for 28 percent of GDP. This year the government's plan is for industry to grow by 8.9 percent and represent 37.2 percent of GDP, according to a report from the Ministry of Planning and Investment.
However, a senior economist at the Lao National Economic Research Institute, Dr Liber Leebouapao, told Vientiane Times it would be impossible for the industrial sector to grow by the extent stated in the ministry's report.
I agree that industry will continue to grow but this sector will not account for 37.2 percent of GDP this year. I think it will take longer for this sector to grow so that it accounts for the largest percentage of GDP, he said.
I think the service sector will contribute the largest percentage to GDP now that Laos is part of the Asean Economic Community. And the building of a railway from China into Laos will drive the growth of transit services in our country.
In 2004, the service sector represented 37.4 percent of GDP, rising to 39.2 percent last year.
According to the report from the Ministry of Planning and Investment, the service sector will grow by 7.8 percent this year, representing 34.7 percent of GDP.
Dr Liber explained that industry could only overtake the service sector if industrial growth was significantly greater than that of the service sector.
Last year, the industrial sector grew at a rate of 9 percent and the service sector by 8.5 percent, which is quite similar, he said.
At the other end of the scale, agriculture has continued to decline sharply. While it accounted for 34.9 percent of GDP in 2004, it dropped to 28.9 percent in 2009 and even further to 23.3 percent last year.
Agriculture is expected to grow by 3 percent this year and to represent 18.8 percent of GDP.
Fortunately, more workers are moving from agriculture to the industrial and service sectors since more investment has been ploughed into these areas.
In 2005, 78.5 percent of the workforce was employed in agriculture and forestry, with the figure declining to 70 percent in 2010 and to 68 percent by the end of 2015.
Last year, the economy grew at an overall rate of 6.9 percent. GDP is now valued at 108,709 billion kip (US$13.37 billion) and annual income per capita stands at US$2,027.
