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Laos Steps Up Debt Reforms With New Strategy, Stronger Oversight

Laos Steps Up Debt Reforms With New Strategy, Stronger Oversight

Lao Ministry Partners With ADB to Enhance Capacity in Public Debt Management The Lao Ministry of Finance, in partnership with the Asian Development Bank (ADB), concluded a 2-day training on “High-level Policy Dialogue on Good Practices for Enhancing Public Debt Management in Laos” on Thursday. The high-level dialogue aimed to establish links between public debt management and fiscal, monetary, and financial policies, with the goal of creating a comprehensive government strategy for improving public debt management. Consisting of government officials, private sector representatives, experts and development partners from the region and beyond, the dialogue aims to draw on international and regional experience to review past lessons, and make proposals for the Lao government to consider in its plans to strengthen public debt management. In July 2017, the Lao government approved the Public Finance Development Strategy 2025 and Vision 2030, which aims to strengthen public finances to contribute to sustaining dynamic and stable economic growth and a graduation from Least Developed Country (LDC) status, reflecting the objective of the Government’s 2016–2020 8th National Socio-Economic Development Plan. “The experiences and lessons of other countries facing similar public debt challenges discussed during the dialogue will greatly help the government, and the Ministry of Finance in particular, to elaborate specific measures to enhance public debt management,” the Ministry of Finance Director General of Public Debt Management Soulivath Souvannachoumkham said during the dialogue. Soulivath also stressed the need for more comprehensive, accurate, timely and transparent monitoring of all public debts, guarantees, onlending agreements and potential future financial obligations of state-owned enterprises and from public-private partnerships. Onlending agreements is the mechanism by which one party borrows money to lend out to another party. “The task for the [Lao] government going forward is to translate good practices identified into specific policies as soon as feasible, including by revising the Public Debt Management Law and elaborating a Medium-Term Debt Strategy,” ADB Deputy Director General for Southeast Asia Emma Veve said. The ADB has reiterated its support to the Ministry of Finance to strengthen public debt management in Laos. All the stakeholders will work in close collaboration with other development partners by providing steady technical assistance to current and future projects. The new country partnership strategy, 2024–2028, is scheduled for ADB Board consideration early next year. The ADB has committed to provide Laos with a total of USD 2.6 billion in the form of 364 public sector loans, grants, and technical support. So far, the bank has already provided Laos with USD 2.41 billion funded by regular and concessional ordinary capital resources, including the Asian Development Fund (ADF). The current ADB’s portfolio in Laos includes 12 loans and 10 grants worth a total of USD 610 million.

Lao Ministry Partners With ADB to Enhance Capacity in Public Debt...