Southeast Asia For Laos, it's steady as she goes By Fred Thurlow BANGKOK - Laos has opted to stay with its ruling team to achieve its goal of moving from a least-developed nation to an industrialized one, which to start with will require an annual growth rate of 7 percent for the next five years. Laos will pursue a "strong people's democracy political system" led by the Communist Party, stated a resolution issued this week at the end of the three-day Seventh Congress of the Lao People's Revolutionary Party, in the capital Vientiane. The statement added that Laos will also follow a "systematic state managed market economy", indicating the state will continue to play a guiding role despite moves towards a free market economy over the past 15 years. Despite speculation that there would be a shake-up in the Politburo, where the real power lies, all that happened was that it was expanded. President Khamtay Siphandone, 77, was re-elected as party chief and the seven men below him kept their positions. Three younger members were added. Two of the them, Bouasone Bouphavanh and former Foreign Affairs Minister Thongloun Sisoulith, earned doctorates at Moscow's Academy of Social Sciences. The other newcomer to the new 11-seat politburo is Laos army chief of staff Major-General Douangchay Phichit. The politburo has been one member short since last December when former vice president Oudom Khattigna died. The policy-making central committee, which essentially administers the country, was also expanded from 49 to 53 seats. In a bid to rejuvenate the central committee, all new members must in future be aged under 60. There had been speculation that Prime Minister Sisavat Keobounphanh would be demoted because of recent economic difficulties and a series of unexplained bombings, but nothing happened. However, a new cabinet lineup is scheduled to be announced later this month and presented to the rubber-stamp parliament, the National Assembly. Surprises could be sprung here. The Congress, which takes place every five years, was attended by 452 delegates representing more than 100,000 party members. The Lao People's Revolutionary Party, the only legal political party in the country, has ruled Laos since 1975 when, with military support from Vietnam, it defeated a United States-backed government. Most of the Politburo members are veterans of that struggle. Initial close ties to Vietnam have been replaced with a gradual return to private enterprise, an easing of foreign investment laws and admission into the Association of Southeast Asian Nations in 1997. During his opening address, Khamtay stressed the importance of economic development, saying the party aimed to triple the average incomes of Laos's 5 million people by 2020. The government has struggled to contain hyperinflation and currency instability since the Asian economic crisis struck in 1997. Khamtay said the government had fallen short of its 8-8.5 percent target for annual economic growth set at the last congress in 1996. It had averaged only 6.2 percent. In the next five years, the economy would grow by at least 7 percent annually, halving the number of poor people in an aim to triple the average income, Khamtay said. The slow growth in the past was "fundamentally" due to "internal causes", including a failure to boost domestic production, develop industry and mobilize domestic funds, he said. Laos, a landlocked nation with an average per capita gross domestic product of just US$300, remains highly dependent on foreign aid, which accounts for 80 percent of public investment. In a sign of improving ties between Laos and China, the visiting Secretary of the Party Central Committee of the Communist Party of China, Lo Kan, commented, "Lao PDR and the People's Republic of China are neighbors, which share common mountain chains and river sources, and the people of the two countries have enjoyed a time-memorial tradition of friendship." Economic targets President Khamtay said the country's economic renovation policy and the direction to be pursued are aimed at "leading the country out of underdevelopment, and become one with firm political stability, peace and social order, with a continuously and steadily growing economy at a relatively fast pace; with the people's living conditions increasing thrice compared to the present time". To achieve this, the country must have a firm basis for the national economy in which agro-forestry, industry and services are closely related in an active and balanced manner; with systematic state-managed market economy having as a fundamental factor a gradual shifting towards an industrialized and modern economy, he said. Khamtay said, "To accomplish the goals, from 2006 to 2010, we have to create every condition to push the economy on continual growth with the average rate of at least 7 percent per year by developing the agriculture and forestry sector simultaneously with development of industry and services, and on the basis of strong agricultural production and effective exploration of focused potentials, slash and burn cultivation would be basically terminated, thus solving the situation of poor families. "To concretize the aims of the 2001-2005 period, our common tasks are: increasing unity throughout the Party and people, developing patriotism, the spirit of independence and self-strength building; exploring and exploiting local potentials in conjunction with active seeking of international assistance and cooperation," said Khamtay. Bouathong Vonglorkham, representing the Party Committee of the State Planing Committee, presented the Draft Socio-Economic development Strategy for 2001-2020, 2001- 2010 and fifth five year Socio-Economic development plan (2001-2005). The macro-economic targets set in the Fifth Five Year Plan are: * To achieve an average increase of 7-7.5 percent per year in GDP growth, of which: an average increase of 4-5 percent per year in gross agro-forestry products; an average increase of 10-11 percent per year in gross industrial-handcraft products; and an average increase of 8-9 percent per year in services; * To strive to institutionalize the agro-forestry-industry-service economic structure in 2005, and the GDP structure shall be composed of: 47 percent of gross agro-forestry products of GDP, 26 percent of gross industrial-handicraft products of GDP, and 27 percent of services of GDP; * To control the annual inflation rate to one digit; * To maintain the stability of exchange rates; * To pursue increased annual budget revenue, and for 2004-05 it shall make up 18 percent of GDP; and to maintain the budget deficit at 5 percent of GDP; * To keep imbalances in regular foreign transactions (the current account) in 2005 at not more than 6 percent of GDP, and; * To ensure that public investment makes up approximately 12-14 percent of GDP; and to endeavor to secure domestic saving of about 12 percent of GDP in 2005. The population is estimated to reach 5.9 million by 2005, and the average GDP per capita income about $500-$550. The thrust goals of 2001-2010 are to concentrate on improving and expanding the economic foundation at a steady and firm pace, primarily to intensify agricultural production; to put an end to slash and burn cultivation practices and succeed in solving poverty problems; to establish rudiments of basic industry and develop sufficient human resources in terms of quantity and quality in order to gradually move towards industrial development and modernization; and to fundamentally build the country as a hub for transit services. The draft plan points out that by 2010, the Lao population will total approximately 6.7 million; GDP growth must average not less than 7 percent per year. The GDP per capita income is to reach $700-$750 . The literacy rate of people aged over 15 years is to increase to 84 percent of the total, and a 67-year life expectancy realized. ((c)2001 Asia Times Online Co, Ltd. _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
