Source: Vientiane Times
The government is aiming for a trade surplus of at least US$1.55 billion this year, despite the country’s economic difficulties triggered by the Covid pandemic.
The value of exports is projected to reach US$7.6 billion while the value of imports is forecast at US$6.05 billion, according to a recent report from the Prime Minister’s Office.
To achieve this goal, the government has pledged to boost agricultural production and the processing of goods for export, especially to China, whose markets can now be more easily accessed via the Laos-China railway.
The government will focus on enhanced production in northern provinces through which the railway and expressway pass, by strengthening crop yields and the raising of cattle for export to China.
The sectors involved have been instructed to help businesses access funding, apply science and technology to production, and help producers to find markets.
In recent decades, the government has attempted to increase exports while minimising imports as a means of earning more foreign currency, especially Thai baht and US dollars, and stabilising the value of the kip.
Last year, Laos recorded a trade surplus of US$1 billion, with the value of exports amounting to US$7 billion and imports valued at US$6 billion.
Laos’ main exports come from the mining industry (gold ore, gold bars and iron ore), as well as paper products, wood pulp, garments, rubber, cassava, bananas, and other agricultural products.
Meanwhile the main imports are fuel, vehicles, mechanical equipment, spare parts, steel products, pharmaceuticals, plastic products, electrical appliances, food items, camera equipment and wood products.
In January this year, Laos recorded a trade surplus of US$41 million, with the value of exports reaching US$598 million and imports valued at US$557 million.
One of the main challenges is the rising price of fuel on the world market, since fuel accounts for the country’s biggest slice of imports.
The surge in fuel prices has had a huge impact on the consumer price index due to the fact that rising fuel prices have driven up the cost of transport.
Economists say it is important for Laos to further improve the investment climate to attract foreign investment and grow the export sector, which in the long run would be good for the economy.
China has become a key export market for Lao goods, especially agricultural produce, following the opening of the Laos-China railway at the end of last year.
Government bodies have been told to spur productivity so that more goods are produced for export and manufacturing is strengthened. At the same time, producers need to improve the quality of their products in response to market demand.
According to the government’s report, entrepreneurs must modernise their production methods to improve the quantity and quality of goods produced for export along the railway.