VIENTIANE, May 4 (Xinhua) -- Grants provided to Laos by foreign countries in the first quarter of 2017 dropped by more than half compared to the same period last fiscal year, the government has told parliament.
Laos received just over 438 billion Lao kip (over 53.5 million U.S. dollars) in grants over the first three months of this year, a drop of 57.06 percent over the same period last fiscal year, Lao Deputy Prime Minister and Minister of Finance Somdy Douangdy told the ongoing ordinary session of Lao National Assembly (NA) in capital Vientiane, reported Lao state-run media Vientiane Times on Thursday.
Grants provided in the first quarter represented only 78.87 percent of the amount expected and accounted for just 17.68 percent of the annual target.
Meanwhile, Minister of Planning and Investment Souphanh Keomixay told the NA that the Official Development Assistance (ODA), which comprises both loans and grants, received by Laos in the first quarter had reached only 903 billion Lao kip (over 110 million U.S. dollars), representing 10.4 percent of the annual plan.
According to Lao Prime Minister Thongloun Sisoulith, foreign aid provided to Laos was likely to decline now that Laos was enjoying greater development, so donors were moving their assistance to other poorer countries.
"We shouldn't expect much (from the assistance). We should try to be self-sufficient," the PM told a recent meeting in Vientiane when giving instructions on the implementation of the 2017 socio-economic development plan, adding that the decline in foreign aid comes as Laos approaches the 2020 deadline for graduation from Least Developed Country status.
An official from the Ministry of Planning and Investment in charge of ODA said it was a common trend globally that foreign aid provided to a country decreases when that country achieves a certain level of development and self-reliance. However, the official said that even if foreign grants declined this did not mean Laos would suffer financially because the country could expect to obtain more loans, reported Vientiane Times.
The official explained that growing development means a country has a growing capacity to repay debt, so it could expect to secure more loans. But the interest rate on the loans could be higher compared to loans provided under the ODA scheme.
In 2016, Laos received more than 5.053 trillion Lao kip (nearly 617.6 million U.S. dollars) in ODA, representing 90.8 percent of the plan for that year. Despite the expected decline in foreign aid in 2017, the government anticipates it will receive ODA worth 8.629 trillion Lao kip (over 1.05 billion U.S. dollars).
