Lao National Radio (LNR) [00:00-00:12]: Today, the moderator is linking up to the National University of Laos to talk with Mr. Somneuk Davading, Senior Economist of the Lao PDR. Sabaidee Mr. Somneuk Davading.
Somneuk [00:12- 00:13] : Yes, sabaidee.
LNR [00:13-00:14]: Can you hear us clearly?
Somneuk [00:14-00:15]: Yes yes....clearly
LNR [00:16-00:26]: On this occasion, we would like you to share with about the Lao economy and update on the current economy of Lao PDR, as well as the progress on the preparations in acceding to the World Trade Organization.
Somneuk [00:26- 01:46]: On the development of the Lao economy in the last 12 months, in 2011, the World Bank has written a report on the Lao Economy [The Lao Economic Monitor] which we have recently launched and disseminated. In summary, the economy of the Lao PDR has witnessed strong economic growth. We project the Lao economy to grow vigorously at 8 percent, which is relatively high despite the impact of flooding and other crisis in the global economy, particularly the European [debt] crisis, a slowdown in China’s economic growth for example. Having said this, we project a continued strong economic growth for the Lao PDR in 2012, at a project rate of at least 7.5 percent. In terms of inflation in 2011, headline inflation dropped in the second half of 2011 after a peak during the first half of 2011. We can see that inflation rate has gradually dropped in the last few months, but it is still considered high, which is higher than 7 percent, which is still an issue that needs continued monitoring. We are uncertain about the problems that lie ahead for 2012, because the issue of environment, natural disasters may have impact on the prices such as food prices.
LNR [01:46- 01:47]: …yes…
Somneuk [01:47- 02:38]: Overall, public revenue management for 2011 has been performing quite well. We can see that the Government’s fiscal deficit has reduced significantly, especially in 2011, which had dropped to less than 3 percent of GDP which is a huge drop compared to 2010. For these reasons, the balance of payment in 2011 has been at an acceptable level. We can also see a slowdown in credit growth by financial institutions in 2011, which partly contributes to lower inflation leading to more stable asset management and foreign exchange reserves rate although there has been a slight decrease.
LNR [02:39-02:45]: How about preparations of the Lao PDR in acceding to the World Trade Organization? How prepared is the Lao PDR?
Somneuk [02:45-03:18]: Currently, the Lao PDR is in its last stage of preparations in acceding to the WTO. If everything goes as planned, we should be accepted as member by end of this year or beginning of next year. Most notably, a major step forward in the preparation process is the completion of bilateral negotiations with key WTO members, big countries such as the United States, the European Union, this now leaves only Ukraine to complete bilateral negotiations.
LNR [03:18-03:25]-: Yes, for this year to end of this year, what are other preparations from our side?
Somneuk [03:29-04:08]: Overall in the past, the Government has participated in negotiations of bilateral agreements with a number of key TWO members [Working Party], which included answering a series of questions about the Lao trading system, the preparation of numerous Working Party reports that indicates commitment of the Lao PDR. Most importantly, we have to improve the standards, improve laws and regulations, improve trade procedures to bring Lao PDR into line with international standards and WTO standards which focus on transparency and non-discrimination, meaning fair treatment among trader partners, fair treatment towards one another. This is important.
LNR [04:09-04-20]: Yes. We would like to thank you to Mr. Somneuk Davading, Senior Economist of the Lao PDR who has shared with us on the Lao Economic Update and preparations to acceding to the World Trade Organization.