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Laos - Issues in public economics (English)

Since 1986, the Government has embarked upon an accelerated transition from a centrally planned to a market economy, based on the mobilization of and competition between all economic agents, including the private sector. This policy has led to a thorough decentralization of economic responsibilities, the extension of financial autonomy to state enterprises and local governments, the adoption of a market-based exchange rate and the liberalization of most prices. However, by 1989, economic tensions had increased as demonstrated by the increase in the inflation rate from 7 percent to 50 percent. This report demonstrates how deteriorating public sector performance has hindered macroeconomic stability and has thwarted the development prospects of the country. Moreover, this report demonstrates that the reform process must undergo consolidation, chiefly with respect to the role of the public sector in the economy. The four priorities for reform consolidation are as follows: 1) deepen the enterprise reform to restore state enterprise profitability; 2) enhance fiscal resource mobilization; 3) adapt the instruments of public expenditure management to the new role of the State in the economy; and 4) strengthen government administration.

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  • Document Date


  • Document Type

    Pre-2003 Economic or Sector Report

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  • Total Volume(s)


  • Country

    Lao People's Democratic Republic,

  • Region

    East Asia and Pacific,

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  • Doc Name

    Laos - Issues in public economics

  • Keywords

    state enterprises;Exchange Rates;efficiency of the public sector;fiscal revenue;Public Utilities;positive real interest rates;Tax Reform;access to foreign market;exchange rate arrangement;Cost, Insurance and Freight;public investment program;Monetary and Credit Policies;optimal allocation of resources;efficient allocation of resource;operation and maintenance expenditure;access to world market;excise tax on import;central planning system;rate of growth;balance of payment;parallel market;public resource;profit tax;performance evaluation system;Public Expenditure Management;multiple exchange rate;public sector performance;lack of communication;access to import;natural resource tax;limited administrative capacity;state trading company;reform process;fiscal resource;public saving;market price;public finance;banking system;import of goods;Civil Service Employment;sale of asset;choice of supplier;autonomous state enterprise;export of goods;current account balance;access to bank;market exchange rate;payment in kind;areas of trade;public resource allocation;local civil servant;terms of trade;agriculture and industry;private sector transactions;decentralization of revenue;central government policy;public enterprise sector;central government control;acceleration of inflation;share of revenue;domestic resource mobilization;collect all taxes;open trade regime;undervalued exchange rate;monitor of enterprise;movement of good;inadequate legal framework;parallel market rate;public sector financing;sales tax rate;centrally planned economy;system of price;growth in agriculture;payment of salary;capita calorie intake;payment of wage;source of revenue;dual price system;form of investment;basic social service;natural resource royalty;medium-term public expenditure;foreign exchange control;system of production;domestic trade flow;sectors of production;recovery of investment;procurement and distribution;state enterprise performance;price of labor;crude birth rate;foreign exchange transaction;population per nurse;nominal interest rate;price of fuel;domestic money supply;



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Laos - Issues in public economics (English). Washington, D.C. : World Bank Group.