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The 4th Annual National and International Conference on Sustainable Rural Development 2014

Title: Social Development for Sustainability in ASEAN Community (Lao Case)

Presented by: Mme. Souphanh KEOKHAMPHETEconomic and Commercial Counsellor

The Lao Embassy to Thailand

The Centara Hotel and Convention Center Khon KaenJune 11, 2014

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Content1. Preparatory for joining AEC 2015

2. Social and Economic Development Outlook determined by the 7th Five Years Plan of National Social and Economic Development (2011-2015), its implementation mechanism and some successful data showed in 2013.

3. Obstacles/Challenges

4. Conclusion/comments

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1. Preparatory for joining AEC 2015

- Policy Guidance- Change Economic Management Mechanism

towards Market Oriented Economy

- Focus on Human Resource Development

- Provide facilities to business operation

- Poverty eradication.

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2. Social and Economic Outlook set out by the Seven Five year Plan of National social and economic development (2011-2015)

It’s a five year plan which continues to implement the previous five year plan and has objectives to take the country out of the poverty and least developed in the year 2020.

• GDP Growth increased by 8% per year; Of which:

- Agriculture sector should be increased by 3.5% with the share of 23%

- Industry by 15% with the share of 39%

- Service by 6.5% with the share of 38%

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• Public Investment

- Economic sector: 30%- Infrastructure (Roads and Building): 35%- Social development: 35%

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• Tourism- Promote tourism development focused on areas of (1) the

natural resource (2) culture and (3) History by participation of local community and keeping clean environment

- Provide facility and good environment to attract number of tourists to visit Laos not less than 2.8 mil. in 2015 and income generating estimated for 350 mil.US$ a year

- Improve quality service of the hotel, guest houses, restaurants and others

- Pay more attention to the tourist safety and their valuable assets.

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• Forestry- Increase Green forestry areas up to 65% of the total

forestry areas in 2015

- Areas of protected forestry should be covered by 3.9 mil. hectares

- Plantation forestry area should be expanded to 200.000 hectares

- Sustainable forestry should be grown up by 10%

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2.2 Social Development- Number of population would be 6.9 mil. Increased

by 2% a year

- Labor Need will be increased to 3.17 mil; of which agriculture sector would be needed 70%, industry sector (including construction and mining) would be needed 7% and service sector around 23%.

- Decrease number of poor families to less than 10% of the total number families countrywide

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- Establish merit villages development by 1-2 in each district

- Bring together small villages which located in the remote areas to be a big village or become a new community or as a small district at least 1-2 district each province

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- The rate of children in the primary school should be increased to 98%, lower and upper secondary to 75% by the year 2015

- Establish 3 technical schools in the big cities.

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- Reduce mortality rate of mother to 260 per 100.000 alive child

- Reduce mortality rate of child aged lower than one year to 45 per 1.000 alive child and

- child aged lower than five year to 70 per 1.000 alive child

- Increase using clean water rate by 80% of the total number of population

- Control dengue, tuberculosis, and HIV/AIDs spreading

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- Increase number of women working for leadership position in each levels of public organization more than 15%

- Increase the rate of women at the National Assembly to more than 30% of total members

- Reduce violation to women and children (Law on women and children protection)

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2.3 Implementation Measures

- Promote all business sector including local and foreign investors to invest for the social-economic development projects with the share of capital more than 32% of the GDP by establishing appropriated policy and complied mechanism to the market economy.

- Accelerate to improve law of investment promotion and other relevant regulations.

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- Establish Information Center to provide information, guidance for business operators,

- Cutting-off unnecessary document, reduce time for business registration procedure,

- Establish one stop service station at the central, provincial and district level to help investors in doing business faster

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- Set out project development as merit (the best example) in each province, each district and villages called “Three Builds” has a meaning as “Three level of development” under three level of provincial administration based on the consensus of the National Assembly number 050 dated 13/6/2012.

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Details of “Three level development” are:

(1) To develop province as a Unit of strategy

(2) To develop district to be a Unit stronger in all areas

(3) To develop village to be a Unit developed

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• How does Central Government do under building up province as a unit of strategy policy ?

- The Central Government decentralize full rights on management and controlling to the local government (Provincial Governors) such as rights to appoint or move executive officers in their province locality.

- Allocate budget to provinces for practical implementation of Poverty eradication Projects .

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- Dispatch technical officers from all ministries to be advisors or to conduct implementation of strategic plan, policies, laws and regulations related to social and economic development projects within provincial locality. ( including district and village levels)

- Now there are 51 districts, covered 32.12% of total number of districts the whole country and 105 villages were focused to develop as merit district and village under three build policy.

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• Conditions- Moderated Public Infrastructure. If there is no

infrastructure or low level of public infrastructure facility providing it would take too much time and could not reach the goal of development (new community or small district in the rural areas).

- Moderated size of population.

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• Success evaluated in 2013

- GDP Growth at 8%, of which Agriculture sector shared by 25.5% increased by 3.1%, Industry covered by 30.3% increased by 10.9% and Service sector increased by 9.8% and shared by 38.4%

- GDP per capita 11.86 mil. Kip. approximately to 1.490 US$.

- Number of Population estimated 6.64 mil.

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- Investment from 2010-2013:

1. China: 755 projects with value of investment 6.501.957.317 US$

2. Vietnam: 412 Projects with values of 4.984.047.168 US$

3. Thailand: 114 projects with investment value of 1.515.408.657 US$

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Trend of Trade2006 2007 2008 2009 2010 2011 2012 2013

Export 878 926 1307 1124 1789 1976 1696 3381Import 931 916 1364 1065 1671 2324 2567 3650

0

500

1000

1500

2000

2500

3000

3500

4000

2006 2007 2008 2009 2010 2011 2012 2013

Export

Import

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1 2 3 4 5 6 7 80

500

1000

1500

2000

2500

3000

3500

4000

ExportImport

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25

26

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- Rural development and Poverty eradication projects have a good success especially in the areas of infrastructure construction both internal and international linkage such as roads connected between villages to villages, villages to districts, districts to the cities, and to neighboring countries.

- 80% of villages has clean water drinking

- Most of villages have an access to the information of the central and provincial administration on time

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- The rate of poor people remains 19% and poor families accounted for 14.8%.

- There are 170 project of poverty eradication, of which 102 project was completed.

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- Women and Children were promoted to access to the health care and equality rights to education.

- Complete establishment of the 2nd National Committee for women promotion and its Strategy Plan. All Ministry and province were installed such kind of this committee.

- Allocate production land for 354 villages of 47 the poorest districts.

- Allocate reserved and protected forestry for 24 and 47 areas respectively.

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- 10 Hotels has been rating for ASEAN standard service as green hotels, not damaged environment.

- Country was awarded by the European Trade and Tourism Union as a famous tourist site destination for the year 2013.

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4. Challenges

- Loss of import duty from current items of goods with the rate lower than 5% would be affected to the government revenue

- Small volume of agricultural production could not be sufficient materials supporting to industrial production.

- Export agricultural products as raw materials would loss benefits for both farmers and value-added for processing production

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- No processing production inside the country would be lost part of jobs creation.

- A free flow of goods would be given more choices for domestic consumers but it could be harmful to some sectors of domestic production and its export competition in the free markets, especially agricultural production and production which is needed high skilled labor for the workmanship of processing, packaging, decorating, carving and neat.

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- A workmanship would be a high competition among free flow of skilled labor after AEC for Lao people, especially for the woodcarving sector, residence construction, inside houses decorating and other services.

- A free flow of investment, capital, and skilled labor among ASEAN countries would bring into Laos a lot of tools, equipment, knowledge, and technology and that may be affected to some jobs creation due to limitation of knowledge in using new technology.

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- Limitation of ability to the market access and supporting resource of importers, exporters, producers, manufacturers and other business operators due to its limitation on English speaking compared to other member countries of ASEAN.

- Small number of international transportation companies with unskilled service system.

- No coastline at all, roads linked to the sea ports make higher costs transportation for importation and exportation of goods than other countries in ASEAN.

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- Even though the Lao Government place first priority on nature and green environment for the tourism but there is a poor of nature trail to the beautiful nature landscape of ethnic minority villages.

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4. Conclusion and comments- Since The Lao Government has agreed to join AEC and

approved ASEAN Blueprint in the year 2007, the Lao Government has tried to disseminated the reason why Laos has to join AEC and what benefits Lao People will get and what challenges would be faced after joining AEC.

- There are two phases of the Five Year Plan of National Social and Economic Development; the 6th Five Year Plan ran from 2006-2010 and the 7th Five Year Plan ran from 2011-2015 respectively.

- Each has determined estimated outlook for social and economic development.

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- To make a sustainable development of Lao people lifestyle, the Government has set out policy guidance focused on the economic mechanism, human resource development, establishing good conditions for business operation and poverty reduction.

- Under this policy, the Three Builds has introduced as its implementation measures.

- Through evaluation last year we have seen a great success of its implementation

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- However, there are some obstacles and challenges caused by country conditions (both social and economic) and the effects of AEC.

- To complete the government policy implementation aiming to catch up the level of social development among ASEAN member countries and take people from the AEC affecting after the year 2015. From my view, it needs to review some important points as following:

1. The implementation of three builds must be continued but needs to give more dissemination of AEC to the local authorities, private sector and grassroots people.

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2. Review some articles of laws and regulations related to the investment, business operation, and taxes in order to provide appropriated incentives and to attract more FDI.

3. Continue to promote three tourist site resources by improving communication to the natural tourism, ethnic villages, and historical places.

4. Continue to invest for human resource development by increasing number of vocational school and vocational training center in the big cities to create number of technical and mechanic jobs for young people.

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5 . Continue to cooperate with ASEAN countries under culture and social pillar development, especially in the area of education and exchanging culture

6. Review policy and its practical implementation mechanism on social welfare, especially the gap of lifestyle between people living in the cities and rural areas.

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Thank you for your kind attention