Lao Public and Private Sectors together with Development Partners discuss the impact of COVID-19 pandemic to the economy of Lao PDR

Vientiane, 24 July 2020. The annual Trade and Private Sector Working Group meeting took place at Landmark Riverside Hotel, Vientiane to discuss the impact of COVID-19 on the economy of Lao PDR.

The meeting was chaired by H.E. Mr. Somchith Inthamith, Deputy Minister of the Ministry of Industry and Commerce (MOIC), and co-chaired by H.E. Mr. Leo Faber, Ambassador of the European Union to Lao PDR, and Mr. Paul Stephens, Charge d’Affairs, Australian Embassy. More than 80 participants from line ministries, development partners, and domestic and foreign private sectors participated in this meeting.

The Deputy Minister of MOIC stated in his opening remarks that the meeting would focus on the economic impact of the COVID-19 and the government policy responses.

“Our meeting is taking place at a critical juncture as the outbreak of the COVID-19 is affecting the health, safety, and life of people around the world, the global economy, including our economy are confronting severe disruptions and a significant fiscal squeeze – from the global demand shock, supply chain disruptions and significantly reduced income from tourism and remittances. Similar to many other countries, when it became clear that COVID-19 pandemic required widespread lockdown of all but essential firms, our Government also took immediate measures to protect vulnerable workers and firms from the worst effects of the sudden drop in economic activity.” He added.

In addition, he also announced the process of conducting the Diagnostic Trade Integration Study (DTIS)  update 2020 by MOIC that “The DTIS Update will be based on a review of existing reports, detailed interviews with a wide range of stakeholders from the government, private sector, and civil society. The work will involve desk research and analysis and consultation (via video/telephone) to a representative selection of private sector firms including agribusiness, manufacturing, and tourist companies.”

Following the remark by the Deputy Minister of MOIC, Mr. Paul Stephens emphasized the importance of the cooperation between the government and development partners and domestic and foreign private sectors in overcoming the impact of the pandemic and sustain long term economic recovery.

“With the onset of the COVID-19 pandemic and its significant economic and health impacts, sustainable economic growth and economic resilience are more critical than ever. While the real economic impact of COVID-19 will not be apparent in Laos, or elsewhere, for some time, we know it has had a severe effect on economic activity and growth prospects. Therefore, development partners in this sector must work closely with the Lao Government to ensure that Government and development partner resources are prioritized where they can achieve the most impact, sustain and increase the momentum of vital reforms, and ensure close coordination between all development partners and relevant government agencies.” He added.

The meeting discussed three main topics regarding the impacts of the COVID-19 pandemic in Lao PDR. The first topic on the economic impact of the COVID-19 pandemic in Lao PDR, following by the recommendations to cope with the impact. The second topic was about how Lao government responded to the COVID-19 pandemic through policy measures, following by the perspectives of the health sector on the topic of balancing public health with economic well-being. Finally, the third topic was the update of the business environment reform focusing on the progress of implementation on Prime Minister’s order No. 02 and No. 03 and introduced the investment-related dispute settlement mechanism in Laos.

Before the closing remarks, the Gender Strategic Action Plan for Lao Competitiveness and Trade project was officially launched.

In his closing remarks, H.E. Ambassador Leo Faber, the co-chair of the meeting, stressed that a prerequisite to a better-functioning Lao internal market is the establishment of a level playing field for all actors, including speedy and effective complaint-handling procedures. He also noted that while Laos has avoided a COVID-19 health crisis, the disruption to supply chains has seriously impacted country’s key economic pillars: tourism, services and remittance from overseas workers.

In his closing remarks, H.E. Mr. Somchith Inthamith reiterated Lao Government’s commitments to work closely with development partners and private sector in implementing necessary support measures that focus on maintaining jobs and livelihoods, prioritizing the health and safety of employees, communities, and healthcare workers, protecting SMEs, ensuring business and supply chain continuity, mobilizing private sector capabilities and resources, and protecting social stability.  Finally, he closed the meeting by expressing his sincere thanks to all speakers for their excellent presentation, his co-chairs and all participants for their active contribution to the meeting.

The TPSWG is one of ten sector working groups under the Round Table Process and is the main forum for policy dialogue between the government of Lao PDR and development partners. Participants of the forum usually come from government, development partners, the private sector and civil society. Other 9 sector working groups include Health; Education; Governance; Macroeconomics; Infrastructure; Illicit Drug Control; UXO; Agriculture and Rural Development; and Natural Resource and Environmental Management.