VIENTIANE, Nov. 13 (Xinhua) -- The Lao government is looking at the possibility of issuing bonds on the Chinese market to finance its investment projects, local daily Vientiane Times quoted a Lao finance official as saying.
Speaking at a meeting with development partners in capital Vientiane, Deputy Director General of the Lao Ministry of Finance's Fiscal Policy and Law Department Pasomphet Khamtan said the Lao government wanted to expand its overseas bond market, with China being a potential target.
At present, Laos mainly issues bonds in Thailand to finance government-funded projects such as electricity generation. Thai investors are confident about buying Lao bonds because the government uses royalties and taxes earned from hydropower projects to repay the loans plus interest owed to investors, said the report.
Pasomphet did not give any details as to how the government would sell its bonds in China and what projects the money raised would finance. But observers believe "Laos has been a target of China's expanded investment so there is a strong possibility that China would purchase Lao bonds."
In addition to the expansion of the overseas bond market, the Lao government would distribute bonds in the Lao Securities Market, which opened in 2011, according to Pasomphet.
According to a report from the Lao National Economic Research Institute, a local think tank, accumulated public debt is about 60 percent of GDP, which is considered to be abnormally high in the eyes of international finance institutions.