Taibarnok and friends,
Good reading of our:
* (btw, one can travel saftly and freely on any road in Laos. Security
is 100% garanteed. The bad element who dream to cause any harm will be
transformed into meat-ball before his attemps.)
Sixth five-year plan for Socio-Economic Development
At the atmosphere when party, army and the Lao people are delightful
and enthusiasm with the opening of the VIII party Congress, in the
report presented to the VIII party Congress by Comrade Chairman of the
Party, strongly reiterated to further implement the party renovation
policy, which contains ideological guideline and practice, the
direction and step for the comprehensive development. It is firmly
convinced to rid the country from the least developed country by the
year 2020. In order to fulfill the said policy in bringing it into
reality, I have the pleasure to be appointed by the Committee Chairmen
of the Congress, to brief on behalf of the Government the draft
direction and tasks of the Sixth Five-Year plan (2006-2010) Socio-
Economic Development, to the VIII Party Congress of the Lao People's
Revolutionary Party, which was proudly held today.
I am please to inform that, this five-year plan have been studied
since 2004, in the wide- ranging participation from the party and
government agencies, covering central and local agencies, socio-
political organizations, mass organizations, which includes senior
revolutionary officers, intelligence, elite, experts, local and
foreign business have contributed broad and profound suggestions to
this draft. For that reason, it could say that the formation of this
plan was open democracy encouraging real initiatives and cooperative
ideas of all societies. Our concerned agency have spent the efforts
in gathering information, summarizing, analyzing, editing and formed
up in details. Afterward, the draft have been sent to the government
meeting, party central committee meeting, National Assembly meeting
for consideration. The evaluation of the recommendations have been
made, the text have been further improved and have been sent to the
polit-bureau of the party central committee for consideration and
final improvement have been made before presenting today at the VIII
Party Congress.
The 5-year development plan is composed of three parts, which are:
I. Overall Evaluation of the situation in the implementation of the V
5-year (2001-2005) Socio-Economic Development plan.
II. Direction and tasks in the Sixth Five-Year plan (2006-2010) Socio-
Economic Development plan.
III. Some principle policies and measures applied.
Due to the fact that the original document, including the attachment,
of the VI 5-year plan consists of about 180 pages. I therefore, would
like to summarize and brief to the meeting only the concrete
information as following:
I. Overall Evaluation of the situation in the implementation of the V
5-year (2001-2005) Socio-Economic Development plan.
A. Fundamental achievements:
1. National Economic growth.
Having analyzed and collected the results of the implementation of the
V 5-year by various sectors and local levels, it could be generally
estimated that the national economic growth have been steadily and
consistently develop, indicating the average growth of the GDP
increased about 6,2% per year, 0,3% more than the average growth of
previous 5-year (1996-2000). However, if compares with 7% growth of
the set target in the V 5-year plan, it about 0,8% failed to reach the
target, of which:
- The gross of agriculture product has increased 3,4% (the plan was
4-5%)
- The gross of industrial product has increased 11,3% (against the
planned 11% ).
- The gross of service has increased 6,7% (the plan was 8-9%).
Despite the fact that we failed to reach the set target, the economic
growth of our country have been included in the list of the countries,
which achieves the high economic growth in Asian region, if compared
with some countries in the region, in the same period such as Cambodia
5,3%; Indonesia 3,5%, Malaysia 3%, the Philippines 3,9%, Thailand 4%,
Vietnam 7,5%.
In comparison with 1995, the scope of basic economy of our country in
2005, has considerably increased roughly 1,3 time. The average per
capita income, in 2005 reached 491 US$. This gross has emerged in all
national economic sectors, particularly the agricultural product has
remarkably increased in both quantity and quality. Having used the new
technical, technological factors, and the new spices, new products
have been increased in various items. The irrigation facilities to
feed water to cultivated land has increased to 190 000 hectares. The
rice production has increased at the average of 3,6 tons per hectare.
Up to 2005 the rice production has reached 2,6 million tons, on
average of 472 kilos paddy per head. Large size animal, such as
cattle, buffalos, goats, pigs and poultry are also increased. Industry
and handicraft have been speedily developed, and many new sectors
emerged. The most evidence are hydropower and mining sectors, such as
gold, copper, lead, coal, zinc, lime stone and others. Manufacturing
of construction material such as: cement, iron bar, gypsum, cpac and
others have increased in many provinces. Manufacturing of agro-
forestry and handicraft for export have developed in many regions. The
service sector has rapid improved, of which the roads connection with
sub-region such as: route No. 3, 8,9,12,13, the second bridge across
the Mekong between Savannakhet-Mukdahanh, national roads and local
roads have been completed. Up to 2005, about 45% of the total families
have accessed to electricity, and 64% have accessed to clean water.
The local and international transportation with neighboring countries
(Vietnam and Thailand has been connected). Thus made a favorable
increase of transportation of goods by 15% per year, the goods across
border increased 20%. The communication, trade, and tourism have also
increased in the provinces, which has potentially available. The
number of tourism entered into the country in the past 5 years
amounted for 4 million people, in 2005 alone reached 1,05 million
people. Up to 2005, about 80% of the districts and 60% of villages in
the country can communicate by telephone. Particularly, in 2005 there
were over 100 British tourist companies voted for Luangphrabang to be
the world best tourist city.
2. Balance of Macro Economic
2.1. Balance of Development Fund
In the past 5 years, social-economic development in our country has
been observed that rate of investment compared to GDP has tendency
increasing, this rate has increased from 19,7% in 2000 to 27,8% in
2005; average 26,6% of GDP in 5 years, the value of this investment in
the past 5 years at present price has reached to 30.623 billion Kip
(against the planed 27.900 billion Kip), here the rate of investment
from state covers 49% equal to 13,8% of GDP, investment from people
and local business cover 7,4% equal to 2,2% of GDP, foreign direct
investment covers 43,6% equal to 10,6% of GDP. The investment of state
is mostly aimed at developing infrastructure, social development, for
instance, the development of Human Resources particularly aiming at
Education, Health and Cultural development for building condition of
integrated development at present and future.
2.2. Balance of State Budget
In the past 5 years, total of revenue from sources of domestic has
reached 15.010 billion Kip, increased 18, 1% per year. Compared to
GDP, rate of mobilization of revenue has increased average 13, 3% in
period of 5 years, this rate is still low compared to objective of the
planed which estimated at 18% to GDP.
In the past 5 years, total of expenditure has reached 22.830 billion
Kip, increased 15,7% per year. Compared to GDP, rate of expenditure in
5 years covers 20,4%. Rate of expenditure of investment for
development compared to total of expenditure is in high rate covers
49,5%, here fund from domestic covers 1/3 , the rest from foreign
assistance and loan.
In the past 5 years, deficit of domestic budget has researched 7.820
billion Kip, on average 7,1% of GDP. This deficit has been mostly
subsidize by the sources from foreign grant and loan.
2.3. Balance of Foreign Currency
The implementation of the policy and balance of foreign currency in
the past of 5 years has registered some progress which contributed to
control and prevent of inflation for better economic stability. Annual
rate of money flow or M2 has been average 20%, fund mobilization from
society has increased at 19,2%, in general value of Kip in the past 5
years has been stable, inflation rate has decreased gradually, average
9,6% in 5 years. Market and official exchange rates have been close to
each other. Foreign reserve compared to import value increased from
2,6 weeks in 2001 to 12,8 weeks in 2005. That is good trend and
indication of macroeconomic stability in general.
3. Change in Economic and Labor Force Structure
3.1. Change in Economic Structure
In the past 5 years, economic structure of our country has been change
in according to 7 party resolution on gradual industrialization and
modernization, creating better condition capability for regional
integration and competition. In the past 5 years, share of agriculture
in GDP has decreased from dominant position 51,9% in 2000 to 45,4% in
2005, share of industry sector has increased from 22,4% in 2000 to
28,2% in 2005, service sector has increased from 25,7% in 2000 to
26,4% in 2005. That is change in economic structure in a more positive
and correct direction.
3.2. Change in Labor Force Structure
It has been observed that labor force structure has been changed
positively in parolee with economic structure. Labor in agriculture
forestry sector has decreased from 78,6% in 2000 to 76,6% in 2005,
labor in industry and construction sectors has increased from 6,9% to
7,7%, Labor in service sector has increased from 14,5% to 15,6%. In
2005, total labor force in economic sectors accounts for 2,71 million
people. However, in the past 5 years, new job creation has been
limited compared to increasing labor force. Therefore, excess labor
force in agriculture and unemployment rate in cities has been at 5% of
total population in 2005.
4. Regional and International Economic Integration
4.1. Export-Import
Export: In the past 5 years, total export value has been US$ 1,83
billion, increased 7,1% per year. In 2005, average US$ 81,2 per
person, increased 19,3% compared to 2000, compared to other countries
in the region , rate of achievement is in low level. Main exports
have been electricity, minerals, wood, wood products, handicrafts,
silk, garments and etc. Agricultural products that have gained new
markets are tea, rubber, sticky rice, maize, soy been and bovines. At
the end of the 5 years plan, export markets have expended to include
large markets such as EU, USA, Japan, China and etc.
Import: Total import value reached US$ 2,86 billion, increased on
average 4,9% per year. In 2005, on average US$ 122,5 per person.
Import structures have been changed in accordance to economic
structure development such as production vehicle-equipment, fuel, raw
materials, consumption goods and some food items that are not
available in the country.
Trade Balance: In the past 5 years, we have had trade deficit at about
US$ 1,03 billion, equal to 57% of total export in 5 years, average
9,4% of GDP per year. However, it has been observed that trade deficit
compared to GDP has decreasing trend in the period 2001-2005, from
11,1% in the beginning of the plan to approximately 8% in 2005. Trade
deficit is common phenomenon of least developed countries that are in
need of capital and equipment, other technology for development. Most
importantly in the past 5 years we have pay more attention on balance
of payments with other countries.
2. Balance of Macro Economic
2.1. Balance of Development Fund
In the past 5 years, social-economic development in our country has
been observed that rate of investment compared to GDP has tendency
increasing, this rate has increased from 19,7% in 2000 to 27,8% in
2005; average 26,6% of GDP in 5 years, the value of this investment in
the past 5 years at present price has reached to 30.623 billion Kip
(against the planed 27.900 billion Kip), here the rate of investment
from state covers 49% equal to 13,8% of GDP, investment from people
and domestic business cover 7,4% equal to 2,2% of GDP, foreign direct
investment covers 43,6% equal to 10,6% of GDP. The investment of state
is mostly aimed at developing infrastructure, social development, for
instance, the development of Human Resources particularly aiming at
Education, Health and Cultural development for building condition of
integrated development at present and future.
2.2. Balance of State Budget
In the past 5 years, total of revenue from sources of domestic has
reached 15.010 billion Kip, increased 18, 1% per year. Compared to
GDP, rate of mobilization of revenue has increased average 13, 3% in
period of 5 years, this rate is still low compared to objective of the
planed which estimated at 18% to GDP.
In the past 5 years, total of expenditure has reached 22.830 billion
Kip, increased 15,7% per year. Compared to GDP, rate of expenditure in
5 years covers 20,4%. Rate of expenditure of investment for
development compared to total of expenditure is in high rate covers
49,5%, here fund from domestic covers 1/3 , the rest from foreign
assistance and loan.
In the past 5 years, deficit of domestic budget has researched 7.820
billion Kip, on average 7,1% of GDP. This deficit has been mostly
subsidize by the sources from foreign grant and loan.
2.4. Balance of Foreign Currency
The implementation of the policy and balance of foreign currency in
the past of 5 years has registered some progress which contributed to
control and prevent of inflation for better economic stability. Annual
rate of money flow or M2 has been average 20%, fund mobilization from
society has increased at 19,2%, in general value of Kip in the past 5
years has been stable, inflation rate has decreased gradually, average
9,6% in 5 years. Market and official exchange rates have been close to
each other. Foreign reserve compared to import value increased from
2,6 weeks in 2001 to 12,8 weeks in 2005. That is good trend and
indication of macroeconomic stability in general.
3. Change in Economic and Labor Force Structure
3.1. Change in Economic Structure
In the past 5 years, economic structure of our country has been change
in according to 7 party resolution on gradual industrialization and
modernization, creating better condition capability for regional
integration and competition. In the past 5 years, share of agriculture
in GDP has decreased from dominant position 51,9% in 2000 to 45,4% in
2005, share of industry sector has increased from 22,4% in 2000 to
28,2% in 2005, service sector has increased from 25,7% in 2000 to
26,4% in 2005. That is change in economic structure in a more positive
and correct direction.
3.2. Change in Labor Force Structure
It has been observed that labor force structure has been changed
positively in parolee with economic structure. Labor in agriculture
forestry sector has decreased from 78,6% in 2000 to 76,6% in 2005,
labor in industry and construction sectors has increased from 6,9% to
7,7%, Labor in service sector has increased from 14,5% to 15,6%. In
2005, total labor force in economic sectors accounts for 2,71 million
people. However, in the past 5 years, new job creation has been
limited compared to increasing labor force. Therefore, excess labor
force in agriculture and unemployment rate in cities has been at 5% of
total population in 2005.
4. Regional and International Economic Integration
4.1. Export-Import
Export: In the past 5 years, total export value has been US$ 1,83
billion, increased 7,1% per year. In 2005, average US$ 81,2 per
person, increased 19,3% compared to 2000, compared to other countries
in the region , rate of achievement is in low level. Main exports
have been electricity, minerals, wood, wood products, handicrafts,
silk, garments and etc. Agricultural products that have gained new
markets are tea, rubber, sticky rice, maize, soy been and bovines. At
the end of the 5 years plan, export markets have expended to include
large markets such as EU, USA, Japan, China and etc.
Import: Total import value reached US$ 2,86 billion, increased on
average 4,9% per year. In 2005, on average US$ 122,5 per person.
Import structures have been changed in accordance to economic
structure development such as production vehicle-equipment, fuel, raw
materials, consumption goods and some food items that are not
available in the country.
Trade Balance: In the past 5 years, we have had trade deficit at about
US$ 1,03 billion, equal to 57% of total export in 5 years, average
9,4% of GDP per year. However, it has been observed that trade deficit
compared to GDP has decreasing trend in the period 2001-2005, from
11,1% in the beginning of the plan to approximately 8% in 2005. Trade
deficit is common phenomenon of least developed countries that are in
need of capital and equipment, other technology for development. Most
importantly in the past 5 years we have pay more attention on balance
of payments with other countries.
4.2 Official Development Assistance in the form of grants and loans:
Over the past five years, the country has received the Official
Development Assistance in the form of grants and loans totaling
roughly 935 million dollars in the implementation of cooperation
programmes for development, roughly 185 million dollars per annum on
average. The Government has used the said assistance mainly for the
construction of the economic infrastructures such as: bridges, roads,
electricity, water supply, public utilities, for the urban development
as well as the human resources development, particularly in the
education and public health sectors. To sum up, the use of such
assistance has borne fruits and largely been effective, significantly
contributing to the socio- economic development of our country.
4.3 Foreign Direct investment:
Over the past period, the Party and Government have made great
effort in improving the domestic and foreign investment policies,
aiming at attracting financial resources, technologies as well as
experiences from the external sources into the country's economic
development by paying attention to improving the Laws, regulations as
well as procedures, including by decentralizing the promotion and
management of foreign investment to local authorities . As a result,
over the past five years, the foreign investments have been
substantially increased, resulting in 585 projects with the approved
capital totaling 2,8 billion dollars of which 1,07 billion dollars has
been used for the actual implementation, of which 4%, 69% and 27% in
the agriculture, in the industry and in the service sectors
respectively . Major projects of significant importance such as: the
Namtheun 2 and mining have been implemented. The said capital has
enormously contributed to the development and economic growth and
brought our country to a new stage of development.
5. Social Development.
In the past five years, the Government human resources development
programme has been followed up and implemented, particularly through
the focused investment plan, which in each of its respects can be
summarized as follows:
5.1 Education:
Generally speaking, over the past years the education development
programme of all levels has been better implemented and expanded,
both quantitatively and qualitatively, as shown in the following
summarized figures: the net enrollment rate for children at the
primary level has increased from 79% in 2001 to 84.2% in 2005, at the
lower secondary level from 46,8% to 54,8% and at the upper secondary
level from 22,6% to 34,4%. The education at the vocational and
university levels, both public and private has been expanded. The
literacy rate has reached 73% in 2005. The enrollment rate at the
higher level education and university has reached 845 students for
100,000 citizens. Thanks to these accomplishments, the United Nations
Human Development Index issued in 2005 listed the Lao PDR the 133rd
among 177 countries of the world compared to 1993 Index, in which the
Lao PDR was listed 141st among 173 countries.
5.2 Public health
In the past five years, the Government has paid attention to the
expansion of the health service networks at the central and local
levels, particularly the network at the grassroots level has been
further expanded. A village or a group of villages is regarded as a
focal point to provide health services and health cares to the people.
Meanwhile, the private health service networks have been encouraged
and promoted for further expansion, which has significantly
contributed to providing better cure to the people of all ethnic
groups. Nowadays, the supply of medication produced domestically has
ensured 48% of the demand. The supply of medication kits for villages
has been extensively carried out, covering roughly 94% of villages in
the country. By 2005, the average life expectancy of our people has
increased to 61 years.
5.3 Labor and Job creation
In the past five years, we have made efforts to promote the investment
in order to generate more employment opportunities. According to the
report, there has been an increased employment of roughly 504,000
people, of which 342,000, 58,000 and 104,000 people employed in the
agro-forestry, in the industry and construction, and in the commerce
and service sectors respectively.
5.4 Information and Culture
Information and culture networks have been further developed. For
instance, the mass media system such as: television and radio
transmission networks have been expanded to the grassroots, covering
the large areas of the country. The national valuable cultural
heritages and those registered as world heritages such as: the plain
of jars in Xiengkhuang Province, Wattphou in Champasack province,
Luangprabang world heritage and etc have been protected and preserved.
At the same time, the work of mass culture has been widely expanded in
the local areas, for instance, so far 85 villages have been recognized
as culture villages. The fine culture, art performances, and
traditions of the peoples of all ethnic groups have been further
encouraged and promoted in the local areas.
5.5. Social Sector and others.
The party and Government have paid attention to the implementation of
the policies in respect of the people with good deeds towards the
nation such as: providing allowances to the handicapped, to the
heroes' families, as well as to those whose family members sacrificed
their lives during the war according to the Decree No 145. Attention
has also given to the implementation of social welfare policies such
as: building of the orphan centres in four more provinces, providing
assistance to those affected by natural disasters namely floods,
droughts and fires and etc; solving the drugs problem by mobilizing
the public participation in combating narcotic drugs, organizing the
rehabilitation of the drug addicts and building of rehabilitation
centres.
Attention has been given to developing Sports and Gymnastics. The
national games have been regularly organized and the participation of
our sportsmen in the regional competitions has been progressively
successful. The number of gold, silver as well as copper medals won
from those competitions have rapidly increased. Besides, the
attention has also been given to administrative reform to improve the
organizational structures at central, provincial and grassroots levels
in order to make the public administration efficient. At the same
time, the strict disciplinary measures have been imposed on the
cadres, including high ranking officials, who violated the laws ,
abused powers, committed corruptions and breached disciplines through
legal process. The Legislative and Judicial bodies have made great
effort to issue legal acts. A great number of laws have been adopted,
disseminated and better implemented. The personnel development has
been widely undertaken, both inside the country and abroad, which has
contributed to the strengthening of the public administration.
II. Guidelines and main tasks of the Sixth Five-year Socio-economic
Development Plan (2006-2010).
This Five-year Socio-economic Development Plan has been made on the
basis of the main guiding directions and objectives of the Socio-
economic Development Strategies for the period up to 2020, which were
set forth at the VII Congress of the Party, the Strategies for
Industrialization and Modernization, the National Growth and Poverty
Eradication Strategies, the Strategies for Sectoral and Regional
Development aimed particularly at turning into details 7 points of
views and 7 function guidelines, and of the new plan of policies
contained in the political report that the President of the Party's
Central Executive Committee has presented to our VIII Congress.
1. Internal and external situations
The Five-year Socio-economic Development Plan 2006-2010 has been made
and implemented in such conditions that the internal and external
situations are much favourable, with promising opportunities and
various forms of challenges, such as in the case of our country's
domestic situation following the five-year plan 2001-2005, the
potentials and driving force of our country have been strengthened;
the economic structures have shifted in positive directions, the
capacity of developing potentials of each economic sector, localities
and enterprises are being improved to be suitable with the
international and regional environments, the market-oriented economic
mechanism regime have been established and operated more effectively,
our country's status has been assessed by the international community
that Laos is a safe country enjoying political stability, which is a
good condition and a factor in assuring confidence of investors and
integration into the international community in the immediate future
in order to increase the potentials for the development of our country
in the next five years.
On the basis of assessment of the international situation as contained
in the political report presented by the President Comrade, it is
recognized that the international environment in the next five year
will still create favourable conditions for the development of our
country. The economic base of our main trading partners will expand
moving forwards. The flows of foreign capital into our country will be
in the tendency of increasing, thus making a good opportunity for our
country to gain potentials and a good posture from the positive
development of the world with a view to pushing ahead the pace of
growth, and this will provide chance for us to build infrastructures
that ensures integration into the region, gradually reducing
development gaps existing between our country and countries in this
region.
However, difficulties and challenges still remain enormously. The
scale of production of our country's economy is weak; incomes and
consumption of our people are still low, meaning that we must make a
lot of efforts to take jumping steps in the economic production and
the development of various types of markets; the financial system and
foreign exchange are weak and backwards, and the effectiveness of the
state management is still limited. The social and economic
infrastructures have not been able to meet the needs of development;
the technology level is still much backwards, compared with countries
in the region. The competitiveness of our enterprises is also low, in
comparison to the present needs; the unpredictable change of the oil
price, the value of the US dollar currency and the prices of strategic
commodities in the international markets which are related to the
political strategies of powerful states, as well as the climate change
are expected to have an enormous impact on the advancement of the
economy of our country.
On the basis of the overall views of the development as mentioned in
the political report presented to this Congress, the analysis and
careful assessment of international and regional situation,
opportunities and challenges, including advantages enjoyed and
difficulties faced by our country, we have defined the perspectives,
objectives and operating guidelines of the Sixth Five-year Plan
(2006-2010) as follows:
2. The requirements of the Five-year Plan 2006-2010
Based on the overall views of development as defined in the political
report of this Congress, the main requirements of the Sixth Five-year
Plan (2006-2010) are mobilizing all the force of the multi-ethnic
people, the sources of potentials of all economic sectors, exploiting
the potentials providing advantages and opportunities, addressing the
difficulties and drawbacks experienced in the past years, striving to
achieve maximum goals in order to take new steps for fundamental
changes as follows:
2.1. turning from the stagnant and unstable development in the past
years towards the more fast-growing and stable development,
diversifying products and goods with high quality and suitable
production costs, gradually improving and promoting domestic markets,
and increasing exportation of domestic products.
2.2. improving competitiveness based on the exploitation of all
comparative advantages to actively implement economic agreements with
foreign countries in an effective manner.
2.3. taking steps to make fundamental changes in the development that
follows the pace of economic and social development and that is
friendly to the protection of environment and conservation of natural
resources, and foremost to address the urgent social problems such as
eradication of poverty, creation of employment, oppression of negative
setbacks and social problems, as well as to protect political and
social security.
2.4. pushing forwards a systematic and comprehensive foundation of
the economic and social structures, side-by-side with gradual
realization of the market-oriented economic mechanism in the socialist
direction, and making the foundation for industrialization and
modernization.
Therefore, this Five-year Plan is designed to be a plan with the
striving spirit to break through towards the solid, momentous changes
in various aspects, with a view to effectively enhancing
competitiveness for the national economy in the globalization era.
3.Guidelines and main functions of the Sixth Five-year Plan, including
10 main functions as follows:
(1) Striving to achieve the continuous and stable economic growth with
an average rate of 7,5 - 8 % per year; (2) Ensuring the economic and
social development at the pace with the protection of environment; (3)
Improving and promoting the state economic activities and the
cooperative economy of the people, side-by-side with the encouragement
of economic development in various sectors aimed at becoming a driving
force of the national economy; (4) Strengthening a systematic and all-
round development of the capacity of the business sector; (5) Building
and restoring the infrastructure with an appropriate focus; (6)
Further opening up, and increasing the effectiveness of economic and
trade relations, investments and trade in services with foreign
countries; (7) Further improving and strengthening the finance-foreign
exchange system, improving the apparatus of the financial sector, and
absolutely resolving the long-lasting indebtedness; (8) Taking steps
for changes to upgrade education with a new quality, applying the
scientific and technological results for upgrading the quality of
human force, labor force, and urgently addressing problems and
negative phenomena in the society; (9) Encouraging the process of
administrative reform and upgrading the state administrative apparatus
both at the central and local levels so that it has quality and
effectiveness; (10) Paying attention to building the defense and
public security forces with strength in all aspects.
4. Macroeconomic goals
In order to fulfill the above functions, the following
macroeconomic goals and balance have been set in numbers projected:
the total amount of the Gross Domestic Products in 2010 at the
constant price must be increased approximately twofold compared with
that in 2000; the average annual growth rate of the GDP must not be
lower 7,5%, whereby in agriculture-forestry there must be an increase
of 3-3,4%, in industry 13-14%, in services 7,5-8%; by the year 2010
the economic structure must be as follows: agriculture-forestry covers
35-36%, industry 36-37,5%, and services 27,6, the total amount of
export must increase by 18,1% per annum, the growth rate of population
1,2% per year, and the per capita GDP must not be less than 800 US
dollars.
The reasons for determination of the average economic growth rate of
GDP not less than 7,5% are as follows:
(1) the development target of the Lao PDR by the year 2020 is to take
the country out of the Least Developed Country status, meaning that
the per capita GDP must higher than 1,000 US dollars by United Nations
standards. By the year 2010 it needs to ensure the average per capita
income in our country above 800 US dollars; (2) there is a need to
address the situation whereby there exists a gap between per capita
income in our country and those in countries in this region in 2004
such as: in China 1,268 USD, in the Philippines 1,055 USD, in Malaysia
4,245 USD, in Thailand 2,538 USD, in South Korea 14,267 USD, and in
Viet Nam 543 USD; (3) in order to enjoy the political and social
stability, and to have a source of increased savings, it is necessary
to upgrade the living standards; (4) the industrialization and
modernization have the same meaning as alleviation of poverty, in
other words there is a need to increase employment and incomes; to
achieve this, the only way is to advance the strong economic growth;
(5) there is an obvious desire to higher the status of our country so
as to gradually become an equal development partner with others within
ASEAN and the region.
The above-mentioned goals may be realized thanks to the followings:
(1) we have lessons and backgrounds in implementation of many previous
socio-economic development plans; (2) we have rich and fertile
resources which are to be exploited and utilized more in quantity; (3)
our country is situated in the centre of the economic integration,
with a number of potentials; (4) the culture and circumstances all
provide facilitation for the development, whether in the fields of
tourism, trade and investments as well; (5) labour force exists in a
large number, wages are lower than elsewhere, the sources for
producing energy are enormous, thus being attractive to potential
investors; (6) there have been more opportunities for us to wide up
economic integration with international and regional partners; (7) the
political and social situation is full of security, thus providing
favourable conditions for development.
Beside the above reasons, there exist production bases in such
successful sectors as:
- Agriculture: there have been great potentials; according to
estimation, production in sector may achieve 4% annual growth,
moreover the total amount and quantity will even faster increase
thanks to the expansion of processing industry and the emerging of new
markets for exports, the changeover of production components due to
the use of more productive plant seeds and animal off-springs, and
also the thanks to fact that following the previous five-year plan the
production of commodities in the category of crops and industrial wood
for exportation and supplying to the domestic market has been in the
tendency of substantially increasing, particularly the plantation of
industrial trees and crops demanded by the markets has strongly
expanded and the prioritization planning have set a rather exact,
focused targets.
- Industry: some main products, such as net electric energy to be
exported from 6 to-be-constructed power stations, which are to be
operated during the next Five-year Plan, calculated from just 70% of
production capacity, are available at approximately 3,000 MW; in
addition, there is available electric energy from about 6 to 8 small
scale power stations which have the capacity of producing 600-800 MW;
cement products of one million tons have yet to be calculated into the
potential production of the country ( Khammouane
Cement Plant: six hundred thousand tons per year, Saravane Cement
Plant: three hundred thousand tons a year, two small cement plants in
Savanakhet: approximately four hundred thousand tons a year); the
exploitation and processing of various kind of minerals are increasing
substantially.
- Services: tourism is in the tendency of booming; on the basis of
yearly calculation, approximately 1,7 million foreign tourists visit
our country, each spending 5 days in the country at an average. The
infrastructure and atmosphere for tourism have been improved and more
favourable, thus leading to the increase in the visiting time to 8-10
days at an average; in this case, the average revenue from tourism may
increase over 500 million dollars per year.
Therefore, the estimation that the annual growth rate of GDP must not
less than 7,5% is highly probable.
5. Guidelines and functions in the sectoral and regional development
Complying with the first view and goal enshrined in the political
report, in this draft plan there have been determined in details
targets, guidelines, programmes and detailed projects for the sectoral
and regional development, which are summarized as follows:
5.1. Sectoral development
A. Agricultural and forestry development
First of all, we further implement the Government's priority
programmes for food production, by striving to produce approximately
3.2 - 3.3 million tons of rice by the year 2010, particularly in the
area of 7 plains which already have several agricultural
infrastructures; at the same time we shall accelerate the production
of commodities from agricultural and forestry resources, in a greater
quantity to meet the demand of markets, by focusing on plantation of
industrial crops with potentials in each region to increase
exportation, particularly at the projects promoting the plantation of
coffee, tea, cashew nuts, corns, cassava, beans, tobacco, sugar canes
and so on; actively promote animal husbandry with an appropriate
focus, particularly big domestic animals such as: cows and buffalos
for exports, goats, pigs and fish for supplying the day-by-day
growing, domestic markets; plant, conserve and exploit forest products
in the direction of commodity production in diversified forms and in a
gradually expanding scale; further develop and create intensified
commodity producing zones in each region, and upgrade the productivity
by applying the new, scientific and technological results and
progress; pay more attention to the promotion of commodity processing
in order to increase the amount of exports in the next five years;
make efforts to basically reduce the areas of slash-and-burn
cultivation, by using the various, new job alternation, such as
industrial tree plantation projects (........fragrance trees, paper
woods), animal raising, alternate commodity trees plantation,
arrangement of fixed habitation and so on; create and implement the
water source forest restoration and conservation; striving to expand
forestation in the area of 25 - 30 thousand hectares, thus increasing
the proportion of forest-covered areas to 53% of the total land area.
(The list of priority projects to be implemented in this sector exists
in the annex of the Plan)
B. Development in the industry sector
Secondly: To improve systems of marketing economic development. To
help us move toward becoming a progressive and modern society in line
with socialism. The Party's leading and the Government's
administration and encouragement, which load to perform some
conditions as following:
a. To improve precedence of laws. To serve for marketing economic
systems.
b. To pay attention to the important marketing development as
following:
(1) To increase the merchandise markets and services in order to
ensure that Laos becomes competitive in the market mechanism.
(2) The immovable market: To shift rights of using land to enhance
production .To strategic land becomes funds and to strategic trade
under laws.
(3) To increase labor market: To set up artisan skills and to train
people in key vacations in order to meet the demands of domestic
market and abroad. To send some labors train and gain work experience
abroad.
(4) To develop financial market: Start from providence of a banknote
mechanism .To amends the shift some companies that have conditions
became pubic companies. To permit bank of Lao PDR starts research
regulations for developing stock markets. To create opportunity for
investors in order to find ways to trade. (Try to establish a stock
market in Vientiane capital at the end of era of the fifth five - year
plan.)
(5) To perform some conditions for developing technological science
markets: To perform funds for insuring risk in research and new
technological development. To sustain and formulate increasingly
researches, analysts, and experts in many fields.
Thirdly: To pay attention to upgrading worker's skills and abilities
across all economic sectors join to marketing economy as following:
(1) To continued to deal with adjusting Government's administrative
organization of the state.
(2) To upgrade officers' qualities in each fields of Government as
well as performing to against corruption and evil.
(3) To amend state enterprises make more self-sufficient strengthen
our national economic system in order to ensure that Laos becomes
competitive in the global market.
(4) To continued to develop and strengthen private economy and family
economy. To pay attention to medium and small enterprises as well as
expansion of production with farms. To formulated corporative economy
of people.
(5) To promote widening economic investments with foreign countries.
Fourthly: To continue to attract funds from domestic and abroad for
investment. Aim to develop social regions for improvement of people's
living conditions. Establish the national project by having the
implementation of the economic development plan in each period.
The general orientations and tasks of the sixth five - year plan are
able to gain satisfactory achievements in each field. By the time in
2010, our country's economy will be able to gain satisfactory
achievements in each field. To built economic structure in each area
in order to explore all the potentials of each locality as well as
country as a whole. The main target of the 2010 socio - economic
development plan as following:
Economic Sector Development:
The economy of our country will improved the country begin from slow-
impermanent development to quicker development and more permanent. The
productive structure and productive quality will have been basically
changed in line with industry and modernization. The structure of
economy, agriculture, industry, and services will become greater
increasingly as well as aggrandizing permanently. Aims to expand the
sectors in which the country has potential. To promote the
productivity of the people will have been fundamental and stipulated
importantly for the main budgets of Government. The budgets will have
been serene basically.
The principal economy will have been more permanently. The balance in
each field may not be permanent, but the relationships between
accumulation and consuming will have been assured. To convince
elaborately the investment so that people's living conditions will
have been gradual improvement. Employing personages will have been
more numerous at five to six percentages. It will have been
stipulation toward the purpose of dispensing productions in domestic
markets. The financial status, which keeps states of concord, will
have been better. Circumstance of finance that is shortcoming will
have been able limited in size.
Constructing potentiality in other to cop with arduous competition in
the regions will have been better step-by-step. To enact the economy
of our country will have become deeply integrated. The status and role
of our country will have been increasable and permanent in the region
and on the international stage.
Social Sector Development:
Over the next five years, the quality of education will have been
changed better. The quality of human resource will have been changed
more brightly. The majority of people's abilities will have been
replied to demand in line of the declaration of the policy on shifting
the country to industry and modernization. By the beginning of a
period of the important of time, the dissimilar social situation of
the country where the majority of people live in poverty will have
been more improved. The living conditions of people all over the
country will have been improved by focusing on people's health. The
mortality is to reduce so that people will live longer. With healthier
lifestyles and better medical care the average person will probably
live 63.5 or more instead of 61 today.
Social dangerous problems will have been solved certainly. In
compliance with labor laws, Labor and Social Welfare will have been
made efforts to gradually organize and regulate the labor force. In
order to promote employment for Lao people of all ethnic group, which
suitable to people's abilities and needs. The social welfare will have
been achieved important successes particularly in the areas of
pension, salaries, and allowances.
The information sector and mass media sector will have been developed
widely and played a strong role in the dissemination. National
Culture will have been preserved and developed.
The grassroots level of people will have been more improved. The
construction of political foundations will have been improved. The
policy to change provinces became to unit of strategies, districts
became to unit of plan-finance, and villages became to unit of the
implementation as well as villages and developing groups for
villages. All will have been more improved. Defense and Security
strengthened will have been continued to be stronger. Preserve
permanently the peace of political. The status of social security will
have been peacefully under law.
All is the main general orientation and task of the five - year plan
of the sixth, which is offer at the eight of Party Congress. All was
the report and plan a strategy for a stipulation. All was collected
opinions and intelligence from sentiment of community life. Therefore,
it was offered to the Party Congress. The purposes submitted to you
for making opinions to be plans and projects, which implemented with
success.
Thank You.