VIENTIANE, Nov. 20 (Xinhua) -- The Lao government is keen to move towards modernization and industrialization by ensuring changes in the country's economic makeup, with the share of the industrial and service sectors expanding and that of the agriculture sector declining.
The economic structure of Laos has not changed as anticipated over the past few years due to the slower growth of the service and industry sectors, Lao national TV on Monday quoted Lao Minister of Planning and Investment Khamjane Vongphosy, as saying.
Speaking at the ongoing sixth ordinary session of the National Assembly's ninth legislature, Khamjane attributed the drop in growth of the industry and service sector to the COVID-19 pandemic.
Under targets set by the government for the period until 2025, agriculture and Forestry were projected to contribute 15.3 percent of the gross domestic product (GDP), the industry sector 33.3 percent, the service sector 41.3 percent, and the remainder coming from taxes and tariffs.
Over the past nine months of 2023, the agriculture sector grew by 3.4 percent, representing 17.3 percent of the GDP. Meanwhile, the industry sector expanded by 3.5 percent over the past nine months of 2023, accounting for 34.5 percent of the GDP.
The service sector grew by 5.6 percent over the cited period, making up 37.2 percent of the GDP.
The slower growth of the service sector is linked to a decline in the number of foreign tourists visiting Laos. In addition, the high cost of production and decline in energy output, because of natural disasters affecting the production of some hydropower projects, have also hit the industry and service sectors, according to the report.
Economists say the government needs to do more to improve the investment climate and attract more foreign investors into the industry sector. In addition, policies relating to labor need to be reviewed to address a labor shortage in the country, especially after thousands of Lao people have left the country to seek better jobs overseas.
Between 2002 and 2009, the average growth of the industry sector was about 14 percent due to the massive inflow of foreign investments. But after 2010, the growth rate declined to 7-8 percent, said the report.