Thailand
Laos: Govt mulls new State investment projects
Laos’ budgetary tensions have forced the government to cut spending in State investment projects in a move to prevent the country from being dragged further into chronic debt.
Therefore some new State investment projects planned for this year might be postponed until next year following the government’s projection that the country’s revenue collection will attain only 96 percent of the annual target.
Deputy Minister of Planning and Investment Dr Kikeo Chanthabouly told Vientiane Times on Friday that State investment projects are mainly in areas related to public works and transport as well as the irrigation sector.
“For sure, our government will not approve new project proposals regarding the construction of public office buildings,” he said.
In principle, the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities will meet to discuss and identify the list of necessary and priority development projects.
Less important projects might be rejected or postponed until next year as part of the government’s efforts to control its budget expenditure.
This year, the government set the revenue collection target at 22,942 billion kip and planned for budget expenditure at 32,402 billion kip.
Of the total budget expenditure, 5,463 billion kip would be disbursed on State investment projects, according to a recent government report.
In the first quarter of this year, relevant authorities in Vientiane and provinces have been informed that 6,465 projects worth 3,300 billion kip can begin. Some new projects which have been approved by the National Assembly are in documentation processes while others are in the process of bidding and waiting for agreements to be signed with contractors.
Laos has faced revenue shortfalls since 2013, affecting the country’s economic growth and poverty reduction efforts. The shortfall also impacted development projects particularly infrastructure construction.
Lao economists agreed with the government’s decision to stop approving construction of new public offices, but noted that more needed to be invested in road improvements to facilitate economic growth.
Expenditure for building new public offices will not necessarily result in positive or sustainable economic returns. On the contrary, government bodies often end up spending even more on electricity and water and other ongoing maintenance costs for the buildings afterwards.
Last year, a total of 5,355 State investment projects worth 3,290 billion kip were carried out in Laos despite the country’s revenue shortfall. In fact, the government attempted to maintain its budget in this sector to boost economic growth, but tried to slash administrative spending.
For instance, the Prime Ministerial Order No.09 signed by Lao Prime Minister Thongloun Sisoulith on May 19 prohibited new vehicle purchases for State administrative affairs for 2018. The order aims to ensure the effective use of the state budget in pursuit of a national thrift policy to maximise the interests of the nation.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Govt_133.html