Lao PDR

UNDP News

30 October, 2007

Nobel prize-winning economist visits Laos
to discuss effects of natural resource-based growth and globalization on developing countries

Nobel prize-winning economist, Dr Joseph Stiglitz, traveled to Lao PDR this week to participate in the consultation process ahead of the 10 th Round Table Implementation Meeting in November.

Dr Stiglitz, whose visit was organized by the United Nations Development Programme (UNDP), shared his knowledge of natural resource-based growth and globalization with the Government.

He met with the Standing Deputy Prime Minister and discussed the implications for developing nations of natural resource-based growth. He also met with senior government ministers and delivered a lecture to enthusiastic students at the National University of Laos.

Dr Stiglitz and Vice President of National University of Laos

Many of Laos ' recent investment programmes have been natural resource based, particularly hydro-power schemes and mining projects. Dr Stiglitz pointed to other developing countries' experiences who have suffered badly from such schemes, often to the benefit of their ‘first world' partners. He encouraged Laos to ensure that their natural resources are properly managed and that they generate revenue from which all can benefit. In particular, the country should prepare for the future by transferring ‘below ground resources' into ‘above ground resources' - or human resources. This would ensure sustainable, socio-economic development in the future when resources might have depleted. This would also help the country to avoid the trend suffered by many resource-rich developing countries that tend to perform poorly economically.

“Economic growth in resource-rich countries is 30 to 50 percent lower than in resource-poor countries,” Dr Stiglitz said.

Dr Stiglitz also urged developing countries not to rush into trade agreements which were not fair to them as this had the potential to further hold back their development.

Dr Stiglitz is a renowned champion of developing countries and has written numerous bestselling books calling for fair treatment in the globalization process.

Most developing countries that have set their hopes on natural resource-driven growth have suffered serious setbacks through unforeseen risks and impacts.

In 2001, Dr Stiglitz and two other American economists were awarded the Nobel Prize in Economics for their work on the Economics of Information.

In addition to his groundbreaking contributions to economic theory, Dr Stiglitz also served as chair of US President Bill Clinton's Council of Economic Advisers and as Chief Economist and Vice-President of the World Bank.

Resident Representative a.i., Mr Stéphane Vigié, said UNDP was delighted that the Nobel Laureate agreed to visit the Lao PDR.

“It is an honour to have a person of Dr Stiglitz's standing come to share his knowledge with us all, particularly in an area such as natural resource based-growth which has significant implications for the Lao PDR's development. We have all benefited greatly from his wisdom and it will give us important insights into issues that will be discussed at the Round Table Implementation Meeting coming up next month,” Mr Vigié said.