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No more unnecessary state investment projects, PM says

Vientiane Times, 14th December 2018

Source: http://www.vientianetimes.org.la/freeContent/FreeConten_No_292.php

Prime Minister Thongloun Sisoulith told the National Assembly (NA) that the government will thoroughly scrutinise state investment projects to prevent money from being spent on highly unnecessary projects as was the case in past years.

 
“In 2019, the government will emphasise quality investment,” he told the parliament recently.
Responding to questions raised by MPs at the NA’s ongoing 6th ordinary session, the premier said state investment in previous years was not based on the budget available as the planning and investment, and finance sectors drew up plans individually.
The planning and investment sector set out plans and implementation of investment projects took place, despite the budget not being available.
The insufficient budget had seen many state departments giving green lights to private businesses to put in investment upfront on the agreement that the state bodies repaid them at a later date. Many of these projects did not undergo bidding processes driving investment costs unreasonably high.
Such a practice has resulted in the budget deficit accumulating public debt to a very high level.
The National Economic Research Institute said in its report that public debt has risen to over 60 percent of the country’s gross domestic product (GDP) making the government struggling to repay the high-level debt.
Worse, the quality of many projects, especially infrastructure projects was poor, despite high investment costs.
“This will not happen in 2019,” PM Thongloun said referring to investment for unnecessary projects and investment that exceeded the available budget.
He added that approved investment will be based on the available budget.
State investment was set at more than 11,473 billion kip representing 6.93 percent of GDP, which is a slight decrease from last year’s investment, according to the drafted socio-economic development plan for 2019.
The decrease was the result of limited budget and declining foreign grant provided to Laos, Deputy Prime Minister and Minister of Finance Somdy Duangdy told the parliament.
He warned that the Lao economy would continue to face difficulty in 2019 amid the budget tension.
PM Thongloun assured that his administration would prioritise state investment projects and those deemed unnecessary will be halted.
For instance, the government would scrutinise necessary infrastructure projects in a province that fit the available budget and sufficient to finish construction on time instead of commencing construction of many projects, which eventually results in funds shortages delaying construction as it was in the past, the PM said.
“This is one of the measures to increase the quality of investment and GDP,” he told the biannual session.
“My cabinet has reached a consensus that ministries and local authorities revise their plans in this regard.”
The prime minister said he ordered the review of more than 4,000 state investment projects across the country and found that a number of them were unnecessary and ineffective.

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