Transcript Avoiding the curse and sustaining the blessing

Session 4.2: Avoiding the curse and
sustaining the blessing: what progress
in governing natural-resource based
pro-poor growth?
P R ESENTER: MR . BOU N L E UA S I N XAYVORAVONG
N AT IONA L BUDG E T DE PA RTMENT,
M I N I STRY OF F I N A NCE, L AO P DR
Overview of Lao PDR
Lao PDR’s Map
• Situated in the center of Southeast Asia, sharing
common boarder with China, Vietnam, Cambodia,
Thailand, and Myanmar
• Divided into 17 provinces and 1 prefecture which
include the capital city, Vientiane
• 6.77 million population as of 2013
• The terrain is mostly rugged mountains, which
gives the country tremendous hydroelectric
potential. Forest and woodland cover 47% of the
country’s land area. These resources all play a
significant part in inducing foreign investment to
the country
• Political stability and strong social order
• Became member of ASEAN in 1997
• Became member of WTO in February 2013
• GDP per capita of 1,589 USD in 2013
ECONOMY OF LAO PDR AND INVESTMENT OPPORTUNITY FOR THAI
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High and Sustained GDP Growth
GDP (in Kip billion) & GDP Growth (2009-2013P)
• Lao PDR’s has consistently demonstrated high
and sustained GDP growth with 5-year average
growth of 7.9% (2009-2013)
• Total GDP in 2013 is Kip 80,199 billion, with yoy
growth rate of 7.95%
GDP Breakdown by Sectors (2009-2013P)
• Four main GDP contributors include services,
industry, agriculture, and import duties
• Gradual increase in the contribution of services
and industry sectors leads to aggregate
contributions to GDP of 67% in 2013, comparing
with 62.3% in 2009
• Such increase is due to public policy to promote
commercialization in order to gradually transform
Lao PDR from an agricultural-based country to be
an industrial-based and modern country
Source: Ministry of Finance, Bank of the Lao PDR
Remark: P stands for Preliminary Data
ECONOMY OF LAO PDR AND INVESTMENT OPPORTUNITY FOR THAI
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Natural resources
Water for hydropower: Capacity 25,000MW,
completed 3,500 MW and under construction
3,000 MW
Land for plantation: rubber, eucalyptus, acacia
Mining for gold, copper and other minerals
Forestry
Natural resource income
National Budget
National Assembly resolution: 17% of total
spending for education, 9% of total spending for
health sector
Special arrangement: NT2 revenue arrangement; all
revenue is earmarked basic education, basic health
care and poverty reduction
Fund: poverty reduction fund, forestry fund
8th NSEDP (2016-2020)
Outcome 1: Sustain inclusive economic growth with
economic vulnerability (EVI) reduced to level required for
LDC graduation and consolidated financial, legal and human
resources to support growth
Outcome 2: Human development enhanced to LDC
graduation criteria level and achievement of off-track MDGs
through the provision and use of services which are
balanced geographically and distributed between social
groups
Outcome 3: Reduced effects of natural shocks as required
for LDC graduation and sustainable management of natural
resources
Financing the 8th plan
NATIONAL & PROVINCAL STRATEGIES
Alignment to:
NSEDP Strategy
toward 2025
Vision 2030
Order 13
National Investment Strategy
New Regulations: EIA/IEE
Moratorium 13: Evaluating Land Concessions
Getting the best deal for our precious resources…..
Contract
Templates
Align development plan M&E
frameworks to SDGs
M&E framework for 8th National Social Economic
Development Plan
CSR / SDGs and the 8th Plan – how can private sector
contribute to the successful delivery of the 8th plan?
Link CSR reporting to 8th Plan indicators?
Lessons learned
Dutch disease: no significant evidence on exchange
rate appreciation, but rent seeking is an issue
Aggressive budget planning, need fiscal adjustment
when the commodity price falls
Inefficient resource allocation, mainly focus on
resource sector
Future Direction
Increase law enforcement on natural resource
governance
Standardize negotiation process for CA, and
increase institutional and staff capacity to govern
the CA
Better budget planning process, earmark more
revenue from natural resource to human capital
development
