The Asian Development Bank’s Country Director for Laos, Mr. Gil-Hong Kim, recently confirmed that the ADB has pledged to increase its financial assistance to the Lao PDR in the next two years, aiming to help Laos mitigate the impacts of the current global financial crisis to enable its economy to recover by 2010 at the earliest. For this year, 2009, the Bank has allocated US$89 million to fund five important projects, including improving the quality of higher education, developing public health services, improving production efficiency of small and medium businesses, and developing and improving transportation and communication links between northern Laos and its neighbors in the Greater Mekong Sub-region, as well as providing technical assistance to the Lao administration. In 2008, the Asian Development Bank provided Laos a total of US$ 53 million in assistance that was used mainly to fund Laos’ poverty reduction projects in rural areas.
The current global financial crisis has also led the ADB to lower its forecasts of Laos’ economic growth, predicting that Laos’ economy will expand at an annual rate of between 5.5% and 6.5% during 2009 from its earlier forecast of 7.5%, and between 1.5% and 2.5% lower than that of the Lao government’s projection.
In another development, the 6th Legislature of the Lao National Assembly, during its 6th ordinary session in December, approved additional funding for the government, increasing its budget for 2008-09 from 10,026 billion Kip to 10,648 billion Kip. The additional money is meant to help the country recover from the damages caused by severe flooding in September of 2008. The government has said it expected its recovery efforts to cost 217 billion Kip more than the original estimates, because flood damages are widespread, with almost 80,000 hectares of farmland and over 520 irrigation canals destroyed, as well as many roads linking urban centers to rural areas.
Listen to Songrit’s report in Laos for more details.