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.
Table of Contents
1. Introduction
2. Problem statement and background information
3. Overview & Regulatory Mapping of the NGPES
4. Risk Analysis and the impact on the rural communities
4.1. Economic Risks
4.2. Social Risks
4.3. Environmental Risks
5. Analysis of the stakeholders involved
6. Recommendation and Conclusion
Research Objective and Focus
The essay explores the economic, environmental, and social risks associated with the Lao PDR government's market-oriented growth strategy, which heavily relies on the extraction and export of natural resources.
- Impact of extractive industry investments on rural livelihoods.
- Evaluation of the "National Growth & Poverty Eradication Strategy" (NGPES).
- Analysis of rising inequality and corruption in the context of export-led growth.
- Institutional vulnerabilities and the lack of legal protection for local communities.
- Assessment of sustainable development criteria versus fast economic growth objectives.
Excerpt from the publication
4.2. Social Risks
Many big companies in the mining sector contributed to the marginalization of rural communities. Especially ethnic minorities are at risk to be expelled due to a lack of legal security. Deforestation in rural regions threatens not only the existence of rare species but also steals the basis of life from many minorities within these regions and leads to massive human rights abuses. Many ethnic minorities who live nearby and economize parts of the forests lose their rural livelihoods. Mostly they do not get any compensations and are required to sell their land to the companies. This contributes to rising inequality and the marginalization of these communities in affected regions. Other social risks are the risks of social conflicts in the mining regions. Frustration through the loss of lands, and linked unemployment and increasing poverty pose drastic risks to those people affected. Research shows, that almost 18% of all villages in Laos lost their land concessions to big companies (Pimhidzai, 2015, p.13). Therefore, in recent years, many conflicts of interests between the local communities and the big companies intensified the problems and risks additionally.
Summary of Chapters
1. Introduction: This chapter introduces the economic development of Lao PDR and outlines the focus on natural resource exports and the associated risks for rural populations.
2. Problem statement and background information: This section details the shift toward market-oriented trade and the subsequent rise in inequality despite overall GDP growth.
3. Overview & Regulatory Mapping of the NGPES: This chapter analyzes the framework of the NGPES and highlights its limitations regarding sustainable poverty reduction and legal enforcement.
4. Risk Analysis and the impact on the rural communities: This section categorizes the strategic risks into economic, social, and environmental areas and examines their specific impact on rural demographics.
5. Analysis of the stakeholders involved: This chapter assesses the winners and losers of the national growth strategy, concluding that the current model favors elites over the rural poor.
6. Recommendation and Conclusion: This final section proposes a transition toward more sustainable development, emphasizing the need for stricter environmental laws and improved transparency.
Keywords
Lao PDR, NGPES, Natural Resource Exports, Mining Sector, Sustainable Development, Economic Growth, Poverty Eradication, Social Risks, Environmental Destruction, Rural Communities, Inequality, Corruption, Foreign Direct Investment, Extractive Industry, Risk Management
Frequently Asked Questions
What is the fundamental focus of this paper?
The paper focuses on the risks associated with the Lao PDR's government strategy to achieve fast economic growth through the export of natural resources.
What are the primary themes discussed?
The primary themes include economic strategy, rural poverty, environmental degradation, social marginalization of minority groups, and the impact of the NGPES policy.
What is the main goal or research question?
The essay aims to examine to what extent the export-led growth strategy, specifically within the mining sector, creates adverse environmental and social risks for the poor populations in Lao PDR.
Which scientific method is utilized?
The paper utilizes a qualitative analysis based on secondary literature, policy documents, and expert reports to evaluate the effectiveness and impacts of the NGPES.
What is addressed in the main body?
The main body examines the background of the Lao economy, maps the NGPES policy guidelines, conducts a risk analysis, and maps the roles of various stakeholders in the development process.
How would you summarize the keywords of this paper?
The keywords are centered on the intersection of developmental economics, environmental policy, and social justice within the specific context of the Lao People’s Democratic Republic.
Does the author believe the NGPES is effective for the poor?
The author argues that while the NGPES is an optimistic policy, it lacks the necessary legal basis and enforcement to ensure that poverty reduction is truly sustainable for the most vulnerable people.
Why does the author suggest the mining sector causes social conflicts?
The author points out that massive land concessions to mining companies frequently lead to the expulsion of rural residents and ethnic minorities, often without proper compensation, which fuels local frustration and conflict.
What role does corruption play in the author’s risk assessment?
Corruption is identified as a major risk factor that allows capital-rich companies to exploit gaps in governance, bypass local laws, and avoid accountability regarding their environmental and social duties.
What recommendation does the author provide for future growth?
The author recommends that the government must move beyond just economic growth metrics and integrate social safeguards, enforce stricter environmental regulations, and increase fiscal transparency.
- Arbeit zitieren
- Anonym (Autor:in), 2021, Risk Management in Public Sector: The Risk of Capitalizing on Natural Resource Exports in LAO PDR, München, GRIN Verlag, https://www.grin.com/document/1245162
