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S. Korea gives US$200m loan to support Lao development
Publication Date : 14-01-2014
The Republic of Korea has agreed to give Laos a US$200 million loan for development projects to enable the country to accomplish its millennium development goals and graduate from least developed country status by 2020.
The low-interest loan will boost the government's socio-economic development and poverty reduction efforts in the wake of recent budgetary tension.
Lao Minister of Finance, Phouphet Khamphounvong, and his Korean counterpart, Hyun-Oh-Seok, signed a memorandum of understanding for the loan in Vientiane on Friday, which will be provided by Korea's Economic Development Cooperation Fund until 2017.
Under the agreement, the two countries will develop infrastructure in Savannakhet province such as roads and irrigation projects and build embankments in Champassak province along the Mekong River. They will also construct roads and bridges and seek new projects.
The two finance ministers also discussed ways to allow Korean firms to participate in La os' resource development projects.
The two sides discussed bilateral cooperation on the stock market and also in investment cooperation.
Ministry of Finance's Office Head, Bounzoum Sisavath, told Vientiane Times yesterday that South Korea also agreed to support the development of Laos under its Knowledge Sharing Programme (KSP).
The KSP is a policy research and consultation programme which utilises Korea's knowledge and experiences accumulated throughout the development process to assist development partner countries.
During his visit to Laos, Hyun-Oh-Seok also attended the handover ceremony for the Mekong embankment project, which protects the inner city from flooding.
Relations between Laos and South Korea have grown rapidly in recent years with more trade and investment cooperation between the two countries.
The Republic of Korea has become one of the top 10 investors in Laos among over 50 investor nations. From 1989 to 2012, the country invested more than US$740 million in Laos.
Trade value between the two nations has also risen over the past five years. It reached US$132 million in 2010 and is expected to grow in the future thanks to the removal of trade barriers.
Korea offers low import tariffs on Lao agricultural products while Korean products like electronic equipment and cars enjoy an increasing market share in Laos.
Tourism cooperation between Laos and Korea is one of the fastest growing bilateral sectors. Laos has become attractive to Koreans recently with nearly 54,000 of them visiting the country last year – up 55 percent on 2011.
The increasing number of Korean visitors is partly attributable to direct flights launched last year by Lao Airlines and Korean service Jin Air.
In November last year, President Choummaly Sayasone visited the Republic of Korea in response to his Korean counterpart Park Geun-hye's invitation, to discuss ways to boost economic, political and cultural cooperation between the two nations.