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WB: Natural resources hold key for Laos' future
Laos can make great strides in further boosting economic growth and reducing pove rty with appropriate macroeconomic and government priorities, according to a new World Bank (WB) report.
The ‘Laos Development Report 2010' was launched yesterday at the WB office in Vientiane.
WB Managing Director Mr. Mahmoud Mohieldin said “Laos is rich in natural capital and, if managed well, this wealth can be turned into genuine development assets for the benefit of the country and its people.”
“Globally about one-third of the wealth of developing countries comes from their natural capital which includes forests, water, protected areas and minerals. Countries that can manage these natural assets cautiously are able to move up the development ladder – investing more in human capital, infrastructure, new technologies and innovation,” he said.
According to the report, forests, agricultural land, water resources, hydropower potential and minerals comprise more than half of the total wealth of Laos.
Minister to the Prime Minister's Office and Head of the Government Secretariat Mr Cheuang Sombounkhanh said “The large amount of natur al wealth is also a huge responsibility for policy makers. Introducing policies that take into account the presence of this wealth and thinking about how to develop it sustainably will be crucial for maintaining high levels of economic growth in Laos.”
The report focuses on natural resources management for sustainable development with specific emphasis on hydropower and mining.
WB Country Manager in Laos Keiko Miwa said “The hydropower and mining sectors combined have contributed significantly to Laos' rapid economic growth, accounting for, on average, about one-third of the country's 7.5 percent annual economic growth between 2005 and 2010.”
However, the report noted, along with some obvious benefits, there are also significant risks associated with the country's natural wealth.
WB Senior Economist for the East Asia-Pacific Region Ekaterina Vostroknutova said “If revenues from natural resources are not well managed, microeconomic risks include a possible a slowdown in industrialisation.”
“There are significant environmental and social risks and the danger that some investments might not represent the best possible use of the natural resources given the socio-economic goals of the country,” she said.
“There is also a risk that the gap between demand for natural resources and the capacity of the government to manage their sustainable use will only widen as more projects come on stream.”
The report suggested some main guiding principles to make maximum use of natural resources in Laos, including ensuring the speed of natural resources development is in line with capacity and quality control of projects, choosing the right projects and implementing them well by strengthening environmental and social safeguards, project-level governance, agency coordination and the government's capacity to monitor and enforce regulations, indentify risks and deal with them effectively at any level from local communities to international, and be strategic by using resources to reduce poverty, support growth and ensure social and environmental sustainability by balancing national and local environmental and s ocial priorities.
vientiane times
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