Laos is seeking $500 million in aid to carry out its five-year socio-economic plan. Donors, however, told the Asian country not to keep its hopes up. One foreign diplomat said “the budget assumes a rise of annual aid to 500 million dollars” but “it’s not going to happen – there is no credibility to the budget process whatsoever.” Donor agencies like the International Monetary Fund and the World Bank have been calling on the Lao regime to reform the tax system so it will become self-sufficient. According to United Nations representative Finn Reske-Nielsen, “the donors may accept to increase aid if the government also increases its share … but if the government’s contribution over the years is flat, the aid is unlikely to grow.” Aside from smuggling and poor revenue collection, rampant corruption is another reason for the donors’ unenthusiastic reception of the proposal. One aid worker said: “I think it’s assumed and accepted that 20 percent of the funds for every project will disappear. At 400 million dollars’ aid per year, that’s a lot of money going into people’s pockets.” (Source: Lao banks on aid but donors losing patience/Agence France-Presse)
