Risk Management in Public Sector: The Risk of Capitalizing on Natural Resource Exports in LAO PDR

Abstract or Introduction

The Lao People’s Democratic Republic (Lao PDR) is one of the smallest and poorest nations in Asia. However, in recent years, the country has experienced massive economic growth since their shift toward a more market-oriented economy and many trade and investment reforms. Since the 1980’s, the Lao government focused on boosting natural resource-based exports, resulting in the country's constantly strong economic growth of approximately 6,5 percent. Despite the economic growth at national levels, it can be observed that inequality and an uneven spatial development has risen. This is due to deficiencies in the public development strategy of the Lao government, which main objective is to free the country from the status of “least developed country” (LDC) as soon as possible. This particular objective is embodied within the framework of the so-called “National Growth & Poverty Eradication Strategy” (NGPES). The strategy of shifting the focus toward an export-led growth strategy is subject to many risks and uncertainties especially to the rural people of the Lao PDR, who are particularly vulnerable to external threats and who benefit at least from the country’s economic growth.
With specific focus on the Lao PDR’s natural resource exports and its adverse effects, the following paper will examine economic, environmental, and societal risks associated with the government’s regulatory growth strategy.