Press Release: Statement by IMF Deputy Managing Director Naoyuki Shinohara at the Conclusion of his visit to Lao P.D.R.

Press Release No. 13/31
January 31, 2013

Mr. Naoyuki Shinohara, Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement in Vientiane at the conclusion of his visit to Lao People’s Democratic Republic (P.D.R.):

“I wish to thank the Government of the Lao P.D.R. and the officials I met during my visit for their gracious hospitality and productive discussions. In particular, I wish to thank Deputy Prime Minister Somsawat Lengsavad, Vice President of the National Assembly Dr. Xaysomphone Phomvihane, Minister of Finance Phouphet Khamphounvong, Minister of Planning and Investment Somdy Duangdy, and Bank of the Lao P.D.R. (BOL) Governor Somphao Phaysith for their warm welcome and frank exchange of views.

“In my meetings with the government, I commended them for their work in creating conditions for robust economic growth and for acceding successfully to membership in the World Trade Organization. The progress made by the Lao authorities in achieving the Millennium Development Goals is also laudable, particularly on poverty reduction and rural development.

“Our discussions focused on how to broaden and sustain this growth, ensure macroeconomic and financial stability, and take full advantage of regional and global integration. While near-term economic prospects for Lao P.D.R. remain favorable, strong credit growth and low international reserves coverage have emerged as sources of vulnerability. To safeguard macroeconomic and financial stability, actions are needed to expand the fiscal space, especially by increasing revenues, while maintaining fiscal sustainability; bring credit growth down to a healthier level and safeguard international reserves; build a well-supervised and sound financial system; and promote private sector-led economic growth to enhance competitiveness in the non-resource sector.

“Lao P.D.R.’s economy has shown much resiliency during these turbulent times and has great potential in the years ahead. The IMF will continue to work closely with the authorities to provide high-quality policy advice to enhance stability and growth. The recent opening of the Technical Assistance Office for Lao P.D.R. and the Republic of the Union of Myanmar in Bangkok also enhances the possibilities for further deepening of cooperation in important areas of capacity building.

“During my stay in Vientiane, I also participated in a roundtable discussion, co-organized with the National Economic Research Institute and Faculty of Economics and Business Management of National University of Lao P.D.R., at which we shared views with leaders of the National Assembly and academics on recent developments in the Lao economy, as well as regional and global trends. I also had an opportunity to visit the World Education Laos Office and the Cooperative Orthotic and Prosthetic Enterprise Center, which are having a meaningful impact on the lives of the underprivileged in Lao P.D.R.

“Once again, I would like to thank the authorities and the people of Lao P.D.R. for their warm hospitality, and look forward to continuing our cooperation.”