In her opening address, NA President Mrs Pany Yathotou hailed the strong economic growth, political stability, and social order and security that Laos has enjoyed in recent years.
She also expressed concern, describing the current economic and financial difficulties as ‘a considerable challenge’ for socio-economic development.
Those attending the opening session included President Bounnhang Vorachit, Prime Minister Thongloun Sisoulith, cabinet members, members of parliament, and retired state leaders.
Mr Thongloun told the session that Laos is on track to graduate from Least Developed Country status even though this will not take place in 2020 as targeted in the five-year plan.
A UN assessment conducted earlier this year indicated that Laos passed two of the three thresholds - the Human Asset Index (HAI) and Gross National Income (GNI) - with only economic vulnerability still needing to be addressed.
If Laos passes two of the three thresholds again in the next assessment scheduled for 2021, the nation will be eligible for graduation from Least Developed Country status in 2024.
The prime minister said Lao people across the country now enjoyed a better quality of life.
The government’s report showed that more Lao people have access to basic public services such as healthcare, education and employment. Poverty has declined, while average incomes have increased.
In 2018, the government forecast that Gross Domestic Product (GDP) would grow at 6.5 percent, amounting to 152,425 billion kip with GDP per capita reaching US$2,599 and Gross National Income reaching US$2,209.
But along with these achievements, the economy continues to face a number of challenges that could undermine efforts to pursue development targets for the rest of the five-year plan.
The chronic budget deficit has caused financial and budgetary tensions, posing risks in the management of the macro-economy, which is heavily dependent on natural resources, the premier stated.
The budget deficit has driven up public debt, which now stands at over 60 percent of GDP, and the government is struggling to repay this high level of debt, according to the National Economic Research Institute (NERI).
Since taking office more than two and a half years ago, the PM said his cabinet had worked to improve and strengthen the financial and budgetary systems in an attempt to ease budget tensions.
The head of government pledged to exercise austerity when it comes to state investment, saying funds will be allocated in line with budget capacity.
Economic difficulties have resulted in an economic slowdown over the past two years, with average growth decreasing to 6.8 percent, a decrease of 0.4 percent compared to the target set in the adjusted four-year socio-economic development plan for 2017-2020.
PM Thongloun promised to prevent the rolling out of unapproved projects as had happened previously and to cancel projects that were deemed unnecessary.
He said the government had managed and stabilised the currency system to make it conducive for business operations, while intensifying efforts to improve the business environment to attract more investment to boost the economy.
Despite these increased efforts, Laos’ ease-of-doing-business (EDB) ranking has fallen for the last three consecutive years - from 139th to 141st and then to 154th this year - as ranked by the World Bank’s latest annual EDB index which surveys 190 economies worldwide.
“The government has done its absolute best, although not all of our tasks have been accomplished yet. But many have been completed,” he told the biannual session.
The premier committed to using more electronic systems to collect revenue to prevent losses, repay more debt, and introduce more incentives to better promote small and medium enterprises.
Greater importance will be attached to poverty alleviation and efforts to address social ills, including drug abuse and trade.
Mrs Pany praised the government for its achievements and called for Assembly members to frankly share their thoughts to help the government overcome the challenges.
During the session, which runs until December 21, lawmakers will debate a number of topics including the socio-economic development plan and budget plan for 2019.
The State Inspection Authority and the State Auditing Authority, People’s Supreme Court and People’s Supreme Prosecutor will present their work performances and future plans.
Assembly members will debate seven newly-drafted laws and amendments to two laws, towards their approval.