Over half a century ago, Lao PDR began its journey to become a modern nation and committed itself to long-term development ambitions. It has delivered electricity, schools, roads, and has become an important energy exporter.
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VIENTIANE, LAO PDR, February 3, 2015 – The growing Lao economy needs to diversify beyond its natural resource base to create more jobs and improve the business environment for foreign and domestic investors,... Show More + according to two new World Bank Group reports released today.Greater private sector investment in businesses can increase opportunities in the agricultural, services and manufacturing sectors – where the most new jobs can be created - and opportunities for the country’s youth will increase if future workers can learn more and stay in school longer, according to the World Bank Group Lao Development Report and the Investment Climate Assessment.“Fueled by rapid growth in the hydro and mining sectors, the Lao economy is growing fast. However, it is not generating a lot of jobs,” said Sally Burningham, World Bank Country Manager in Lao PDR. “To end poverty and boost shared prosperity, an improved business environment can help increase the number of jobs in agriculture, manufacturing and Show Less -
An additional 96,000 young people will be looking for jobs every year in the coming decades. Having more potential workers presents an opportunity for growth, but only if productive, income-generating... Show More + jobs are available.While the government has focused on the role of education in skills development, the Lao PDR Development Report aims to identify what needs to be done to create more and better jobs for Lao PDR’s growing population.Key findingsLao PDR’s economy is growing fast but growth is mainly driven by the hydro and mining sectors where very few jobs are created: only 22,000 people work in these sectors and this number is unlikely to increase much, given how capital intensive those sectors are.Currently, most of the jobs that are available in Lao PDR are not very attractive: productivity and growth remains very low, and this implies relatively low wages, and relatively slow growth in those wages.The underlying problem is that a difficult business environment keeps foreign and domes Show Less -
Key FindingsEconomic outlookGrowth is projected at 7.2% in 2014, with a moderate slowdown on the 8.1% recorded for 2013. Growth continues to be fueled by the resource sector, continued FDI-financed investment... Show More + in hydropower, and accommodative macroeconomic policies. The resource sector is expected to provide a smaller direct contribution to growth in 2014. This is due to most major projects are under construction and not expected to commence operation this year. It is also due to expected lower gold production, which is likely to offset some of the gains expected from higher copper production.In the 2012/13 financial year, the fiscal deficit widened significantly, due to a combination of a large increase in public sector wages and benefits, and a decline in grants and mining revenues. The primary cause of the expanded deficit was due to an almost doubling of the total public expenditure on civil service wages and benefits.The 2013/14 budget plan indicates a slightly narrower fiscal Show Less -