As Prepared:
Statement
by
His Excellency Dr. Thongloun SISOULITH
Deputy Prime Minister and Minister of Foreign Affairs
of the Lao People’s Democratic Republic
at the Bahrain Forum on Rebalancing Global Geo-Economic Strategies for Security, Growth and Development
Plenary Session III: “Harnessing Energy Resources for
Economic Prosperity and Security”
Bahrain, 15 May 2010
Mr. Chairman,
Distinguished Guests,
Ladies and Gentlemen,
I am greatly honoured to attend this Bahrain Global Forum. Let me hereby express my sincere thanks to the Government of the Kingdom of Bahrain as well as the International Institute for Strategic Studies (IISS) for the warmest hospitality extended to our delegation. We also appreciate the impeccable arrangements made by the host for the meeting. The convening of this forum is most essential and timely for it takes place at the time when our world is facing daunting challenges, primarily the need to speed up economic recovery in the wake of the global economic and financial crisis, oil and food price fluctuations, climate change, including global warming, natural disasters and pandemics. All these require joint brainstorming by all parties and states so as to identify root causes of the problems and their impacts on world nations. By doing so they will be able to respond to and address those consequences and ensure future prosperity and security.
As you are aware, in the era of globalization, the “chain” like interdependence and mutual reliance among global states both big and small, developed and developing are increasing. Therefore, wherever a crisis exists, it must unavoidably affect one another at least in an indirect if not direct way. Moreover, a crisis that originates from a big power would easily become something like a “domino” and a small state with a fragile economy become more vulnerable and likely to take much longer time to overcome the turmoil.
Mr. Chairman, Despite double challenge as a landlocked least developed country surrounded by big neighbours with strong economic growth, Laos has some experience drawn from her efforts to respond to and permeate fallouts of regional and global economic crises in order to build immunity, capacity to exist as well as create a certain momentum for economic growth thanks to the following factors and grounds:
Laos was hardest hit by the 1997 “Tom Yum Krung” (or prawn sour soup) crisis from Thailand, which was spread throughout Asia. Despite rescue efforts by IMF and other international financial institutions, the catastrophe prolonged until 2002-2003 during which our economy could manage to recover gradually because of effective measures taken by the government as follows:
1. set up a new prudent and rigid mechanism for macroeconomic management:
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balance budget deficit at a manageable rate;
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balance at a certain level import and export;
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balance public debt(better handling debt services);
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pursue “austerity” policy in terms of public expenditure and revenue collection.
2. improve bank reserve capacity and piecemeal non-performing loans (NPL);
3. improve domestic and foreign investment laws with more incentives to attract increased FDI;
4. maintain political stability and social order, a prerequisite for sustained economic growth.
Mr. Chairman, Through its recovery efforts from 1997 crisis, the Lao PDR has learned some lessons of how to deal with and shield the serious effects of the economic and finance-banking crisis that started from USA and proliferated across Europe, thus hitting Asia including the Lao PDR. To respond to and overcome this turmoil, I can say that with the lessons learnt and support of the international community, including international financial institutions, the Lao PDR has made every effort to exploit its latent potential of natural abundance (natural resources) for maximum benefit. In this regard, all economic sectors are encouraged to invest in the areas of hydropower, mining, export-oriented processing industry and tourism promotion.
Laos has been heavily affected by swelling oil prices. Yet: There is no choice for Laos has no oil resource of its own. Consequently the country has to import expensive oil products. In spite of this, an alternative currently available to us is utilizing water and coal resources for producing electricity for export.
As far as the area of hydropower is concerned, the Lao PDR has 18 tributaries of the Mekong river, which serve as potential for the generation of hydropower for export and development projects. Furthermore, there are coal, large cultivation land area for growing bio-fuel crops and so on.
It is our Government’s consistent policy to utilize clean hydropower and preserve forests and environment in a sustainable manner. At present, the Lao PDR’s total hydropower generation capacity accounts for 87 dams or about 25,000 MW and thermo-electrical power of more than 3,000 MW for export to neighbouring countries, namely Thailand, Vietnam and Cambodia as well as for domestic industries.
In short, there are many alternatives for regional energy security, yet whatever it is we have to ensure its equilibrium with nature and environment. For this reason, the Lao PDR will do every thing possible to restore its forests to cover 65% and 70% of the country’s land area by 2015 and 2020 respectively.
Mr. Chairman, I wish to praise ASEAN member countries’ commitment to building a community by 2015, which is endowed with great potential for development in the years to come. It is also my pleasure to see ASEAN+3 (China, Japan and Republic of Korea) and ASEAN+India become a strong mechanism in creating collective strength for ASEAN to prevail over the crises. To this end, we ASEAN are in the process of implementing the Chiang Mai Initiative Multilateralization (CMIM) and Asian Bond Market Initiative (ABMI).
In conclusion, let me say that the unfolded crisis suites the desire of no one. However it is unavoidable for it represents the law of evolution of human society. The only thing to be done is we have to afford to identify its real causes and the international community must promptly take collective measures to prevent and address it. Otherwise it would turn into a catastrophe to mankind, thus making them fall into the abyss of crisis that will never recover.
I hope the Bahrain Global Forum proceeds with brilliant success!
I thank you, Mr. Chairman!
