Laos has invited private investment in national road construction for the first time, media reports said on March 31, as it faces mounting budget problems.
The Communist government has chosen two road projects – from the capital Vientiane to Vang Vieng and to Pakxan, in Bolikhamxay province – to launch a public-private partnership, the Vientiane Times reported.
“It is seen as a way to source finance for infrastructure development amid the financial difficulty the government is currently facing,” the state-run newspaper said.
Laos, a landlocked nation ranked among the world’s least developed countries, has been expanding its national road network about 7 per cent per year. Earlier this month, the government sacked former Finance Minister Pouphet Khamphounvong for failing to meet revenue collection targets and for excessive expenditures this year.
According to the World Bank’s latest economic outlook report, the country’s fiscal deficit widened last year “due to a combination of a large increase in public sector wages and benefits, and a decline in grants and mining revenues.
“In addition to revenue measures, there is a need for more prudent medium-term expenditure planning and execution by the government going forward,” the bank advised.