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New Lao new premier faces heavy economic difficulties
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Tuesday's decision by the ruling Lao People's Revolutionary Party to put former Finance Minister Boungnang Vorachit at the helm as prime minister is an attempt by the party to steer the country out of poverty, analysts and party sources said.
Boungnang, 63, is the only figure that the party can rely on to help combat chronic poverty in the country in an era of globalization, the sources said.They pointed to his experience in governance and economic management. Boungnang is a former army colonel who served in the military from 1954-1980 before shifting to work for the party's political wing as provincial secretary general in the central province of Savannakhet in 1982.
Although long retired, he is still widely regarded and supported by a faction in the armed forces, another party source said. His retirement from the military allows him to be perceived as a ''civilian'' compared to leaders such as Choummaly Sayasone, who became vice president but who had previously been tipped for the premiership, the source said.
Unlike other senior Lao leaders, Boungnang is remembered and heralded for his service in the political arena, including a stint as governor of Savannakhet and his political posts in the Vientiane municipality. It was in Vientiane and in Savannakhet where Boungnang showed his capability in governance, enough to earn him laurels and a seat in the powerful Politburo in 1996. He was promoted to the post of deputy prime minister in April 1996.
A graduate of a Vietnamese junior high school, Boungnang has no economic training. He learned macroeconomic management on the job while serving as deputy prime minister, when his duties included overseeing domestic investments. In August 1999, he assumed the post of finance minister and exercised his influence as Lao's economic czar.
Boungnang's ascent to the post coincided with the impact of the Asian regional financial crisis on the landlocked country. The Lao currency, the kip, depreciated heavily during the regional crisis. Wide fluctuations began in 1998, when the kip was valued at about 6,200 to the U.S. dollar. In 1999, it was about 7,700 to the dollar. Last year, the authorities managed to narrow the fluctuation to an average of 8,000 and the currency has since been stable.
''It has been stable during Boungnang's tenure. More or less, it can be attributed to his performance,'' a party source told Kyodo News.
The new premier is seen as bringing new hope for spurring economic growth. However, a Vientiane-based banker said Boungnang's knowledge of macroeconomic management is ''relatively poor.'' ''It seems he has an open mind and always listens to the opinion of others,'' the banker said, adding that Boungnang is studying the negative impacts of liberalizing the Lao economy.
The party, acknowledging that growth in gross domestic product averaged only 6.2% in recent years, well short of the 8-8.5% targeted by its previous congress in 1996, set a new target of 7% annual growth for 2001-2010 at its seventh congress held March 12-14. Boungnang's mettle will be tested in the next five years. In particular, he will have to deal more with international agencies to satisfy the party's goal of bringing in more foreign grants and loans to generate growth, sources said.
Boungnang, 63, is the only figure that the party can rely on to help combat chronic poverty in the country in an era of globalization, the sources said.They pointed to his experience in governance and economic management. Boungnang is a former army colonel who served in the military from 1954-1980 before shifting to work for the party's political wing as provincial secretary general in the central province of Savannakhet in 1982.
Although long retired, he is still widely regarded and supported by a faction in the armed forces, another party source said. His retirement from the military allows him to be perceived as a ''civilian'' compared to leaders such as Choummaly Sayasone, who became vice president but who had previously been tipped for the premiership, the source said.
Unlike other senior Lao leaders, Boungnang is remembered and heralded for his service in the political arena, including a stint as governor of Savannakhet and his political posts in the Vientiane municipality. It was in Vientiane and in Savannakhet where Boungnang showed his capability in governance, enough to earn him laurels and a seat in the powerful Politburo in 1996. He was promoted to the post of deputy prime minister in April 1996.
A graduate of a Vietnamese junior high school, Boungnang has no economic training. He learned macroeconomic management on the job while serving as deputy prime minister, when his duties included overseeing domestic investments. In August 1999, he assumed the post of finance minister and exercised his influence as Lao's economic czar.
Boungnang's ascent to the post coincided with the impact of the Asian regional financial crisis on the landlocked country. The Lao currency, the kip, depreciated heavily during the regional crisis. Wide fluctuations began in 1998, when the kip was valued at about 6,200 to the U.S. dollar. In 1999, it was about 7,700 to the dollar. Last year, the authorities managed to narrow the fluctuation to an average of 8,000 and the currency has since been stable.
''It has been stable during Boungnang's tenure. More or less, it can be attributed to his performance,'' a party source told Kyodo News.
The new premier is seen as bringing new hope for spurring economic growth. However, a Vientiane-based banker said Boungnang's knowledge of macroeconomic management is ''relatively poor.'' ''It seems he has an open mind and always listens to the opinion of others,'' the banker said, adding that Boungnang is studying the negative impacts of liberalizing the Lao economy.
The party, acknowledging that growth in gross domestic product averaged only 6.2% in recent years, well short of the 8-8.5% targeted by its previous congress in 1996, set a new target of 7% annual growth for 2001-2010 at its seventh congress held March 12-14. Boungnang's mettle will be tested in the next five years. In particular, he will have to deal more with international agencies to satisfy the party's goal of bringing in more foreign grants and loans to generate growth, sources said.
