Economic issues to dominate Lao national assembly

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Discussions regarding the economy and government debt are predicted to dominate the seventh ordinary session of the Lao National Assembly (NA), state-run daily Vientiane Times reported on Tuesday.

The seventh ordinary session of the National Assembly, which opened Monday here, will continue until July 25. President Choummaly Sayasone, Prime Minister Thongsing Thammavong, and other senior Party and government officials were present for the opening ceremony.

In her opening remarks, National Assembly President Pany Yathortou stressed that economic instability was being felt not just in the region but around the world. A fluctuating global economy, outbreaks of disease and natural disasters have both direct and indirect impacts on growth in the region and the world, she said.

Pany's comments come as the Lao PDR prepares to conclude the Seventh Five-Year National Socio-Economic Development Plan (NSEDP).

In his report to the National Assembly, Minister of Planning and Investment Somdy Duangdy highlighted the successes of the NSEDP's implementation over the last six months. Somdy also pointed out the country's predicted economic growth for the 2013- 14 financial year which sits at 7.6 percent.

On the topic of government debt to development projects Somdy did not disclose the exact amount but said that initial calculations show the amount to be reasonably high.

The government is facing pressure to pay debts resulting from the development of a number of projects implemented without approval from the National Assembly. These projects have been implemented at a time when the government has been experiencing a revenue shortfall which is expected to continue into the 2013-14 financial year.

The debt payment plan is expected to be implemented in the next financial year. The Ministry of Planning and Investment has agreed with the Ministry of Finance to pass on the responsibility of payment to various sectors and local authorities. At least 35 percent of the future allocated budget will be used to pay the debts with a focus on repaying the debts of completed projects.

In a report containing the National Assembly's comments regarding the socio-economic development and state budget plans of the government, Vice President of the National Assembly Xaysomphone Phomvihane said that the government needed to enhance its efforts in collecting revenue.

According to Xaysomphone the government needs to ensure that enterprises pay taxes based on the country's laws while limiting financial leaks and extravagances in budget expenditure.

He urged the government to make sure that all sectors and companies pay their taxes before the end of the financial year in order to reduce the government's financial burden.

The National Assembly has urged the government to impose clear mechanisms and measures to collect key revenue and deal with the issue of rising debts. According to Xaysomphone, it is critically important for the government to identify sources of income and improve coordination between relevant sectors in the capital and various provinces in regards to revenue collection.

The government has proposed that the National Assembly consider approving its plan to cut spending and revenue collection targets for the 2013-14 financial year after recognizing that the targets were unreasonably high.

Minister of Finance Lien Thikeo proposed that the NA consider cutting the domestic revenue collection target from the original plan of 20,186 billion Lao kip (2.5 billion U.S. dollars) to 19, 229 billion Lao kip (2.38 billion U.S. dollars).

Additionally the government has asked the NA's permission to cut state spending amounting to some 659 billion Lao kip (81.77 million U.S. dollars) and sell government bonds amounting to some 727 billion Lao kip (90.2 million U.S. dollars).

The government has asked permission from the National Assembly to increase the budget deficit from 5 percent to 5.8 percent.

In addition the government hopes to collect revenues that local authorities have collected amounting to some 206 billion Lao kip ( 25.56 million U.S. dollars).