Productivity improvements key to Laos' future growth: WB

Productivity improvements are key to Lao's further future growth and poverty reduction, according to twin World Bank studies launched Tuesday.

Inadequate basic skills including poor literacy are among factors hampering the nation's socio-economic development, according to findings published in the 2014 editions of Lao Development Report and Lao PDR Investment Climate Assessment.

Both reports called for improvements to the nation's business investment climate including improved transparency and more predictable implementation of existing legislation, coupled with simplified and consistently-enforced taxation compliance measures.

Laos faces significant challenges that threaten to constrain opportunities for further economic growth and poverty reduction, said the report.

World Bank Country Manager for Laos Sally Burningham said rapid rates of economic growth experienced in Laos in recent years had been derived primarily from development of the country's rich natural mineral and hydropower resources, which despite their value created relatively limited employment opportunities.

More efficient utilization of the nation's human resources was therefore necessary if the nation was to achieve its long-term poverty reduction goals.

"To end poverty and boost shared prosperity, an improved business environment can help increase the number of jobs in agriculture, manufacturing and the service sectors," Burningham said.

"Improving education outcomes for all Lao children and young adults is also a key foundation for their future employment opportunities."

World Bank Senior Economist Richard Record said labor productivity in Laos was about half of the level one would expect from a country of comparable GDP per capita.

Record said improving agricultural productivity would allow low- skilled workers to spend less time on farms and more boosting household incomes via the domestic manufacturing and service sectors.

Meanwhile, efforts to increase the pool of skilled workers could help improve labor productivity amid rapidly rising wages, one of the factors that threaten to keep Laos less competitive than its more populous South-East Asian neighbors. Endi