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Lao PM calls for greater self-reliance as foreign aid declines

Xinhua, December 29, 2016 Adjust font size:

Lao Prime Minister Thongloun Sisoulith has called for central and local departments to do more to pursue the development agenda and strive for greater self-reliance as foreign aid to Laos declines.

The trend in the reduction of foreign aid over the coming years is the result of Laos enjoying greater development and donors moving their assistance to other poorer countries.

Speaking at a recent meeting to instruct officials on the implementation of the socio-economic development plan and budget for 2017, the PM stressed the need for state departments to work harder to attract foreign investment as a source of finance.

In order to attract more foreign investment, Lao PM requested central and local authorities to enhance the investment climate by simplifying and expediting the investment proposal process in a transparent manner.

An official from Lao Ministry of Planning and Investment in charge of Official Development Assistance (ODA) was quoted by state-run Vientiane Times as saying on Thursday that it is a common trend globally that foreign aid provided to a country decreases when that country achieves a certain level of development and self-reliance.

However, the official, who asked not to be named, said that even if foreign aid declined, this did not mean Laos would suffer financial problems because the country is expected to obtain more loans.

"Growing development means a country has a growing capacity to repay debt, so it could expect to secure more loans," the official said, adding that though the number of grants might decrease, ODA, which comprises both grants and loans, could increase in the form of loans.

In the 2015-2016 fiscal year, the Southeast Asian country received more than 6.462 trillion Lao kip (over 791 million U.S. dollars) in ODA, of which almost two trillion Lao kip (over 244.8 million U.S. dollars) was given as grants and the rest as loans.

Despite the expected decline in foreign grants, in 2017, Lao government anticipates receiving 8.629 trillion Lao kip (over one billion U.S. dollars) of ODA, which will represent 23.73 percent of total expenditure planned for 2017. Endit