Lao PDR

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Achieve Human Development by boosting International Trade: states the Lao PDR's National Human Development Report

The Lao National Human Development Report 2006 is released at the
9th Round Table Meeting on the 28 - 29 November

Vientiane, 21st November 2006: The third Lao National Human Development Report “International Trade and Human Development” supported by the United Nations Development Programme is released by the National Statistics Centre under the Committee for Planning and Investment at the 9th Round Table Meeting. .

The Lao People's Democratic Republic (PDR) is preparing to become an active participant in regional integration and globalization. Since it joined the Association of Southeast Asian Nations (ASEAN) in 1997, its pace of involvement in regional activities has steadily accelerated. Trade agreements with various partners and Normal Trade Relations with the USA have expanded Lao products' horizons for increased exports. The mining and hydroelectricity sector has experienced spectacular growth. In many ways, Lao PDR is standing at a fork in its development path; it therefore important to consider which is the best path to take for sustainable growth, poverty reduction, and human development.

The “best path” to take that will simultaneously boost trade and human development is highlighted by the new Lao National Human Development 2006 “International Trade and Human Development.” The NHDR spearheaded by the Committee for Planning and Investment, with support from UNDP, confirms that under the right conditions, increasing international integration and trade in the Lao PDR could play a vital role in the realization of the Millennium Development Goals and in the country's graduation out of Least Developed Country status by 2020.

However, the report also makes clear that for m arket-oriented trade and equitable economic growth to be sustainable and successful; it needs to be accompanied by well-targeted public policies and appropriate governance reforms that are pro-poor in their focus and outreach. The report's authors note that “there needs to be clear pathways connecting the benefits of trade directly and indirectly, with the realities of Lao families and providing them with improved living standards, new choices and emerging opportunities”.

The five pathways that need to be addressed are highlighted by the NHDR 2006 and include: cross-border trade, migration and remittances, employment, rural electrification, and improved information.

Cross-border trade: Currently, more than half of the population lives in border districts due to the promise of enhanced income through trade and work opportunities in neighboring countries. A significant amount of the cross-border trade is conducted informally by individual traders, and this increase in income for traders has positive flow-on effects to the local domestic economy. The NHDR Report recommends that small-scale informal cross-border trade should be protected by the Government attention and not restricted.

Labour Migration and Remittances: There are at least 200,000 Lao workers in Thailand , 55% of them women. These Lao workers send back as remittance an estimated US$100 million a year, which is equivalent to approximately 5 percent of Gross Domestic Product (GDP). Thailand now offers work permits and other benefits if foreign workers register with the Thai government.

Employment: In recent years there have been large increases in direct employment in export sectors and in small-scale retail trade due to increased imports. People are better-off, and their local expenditures make an important contribution to the local and national economy. International tourism also contributes significantly to human development. It is important for human development that most of the estimated direct employment in exports is in rural areas and that more than half of the direct employment in exports is of women. Government policies and reforms need to be focused on strengthening sectors with high human development potential such as agriculture, manufacturing, and tourism.

 Rural Electrification: Rural electrification is one of the key ways to improve human development, and has been shown to lead to increased school enrolment and retention rates, particularly of girls. It has also contributed to improved health levels in rural areas, as well as the reduction of women's household work. Moreover electricity can increase access to information due to radio, television and mobile phones.

Improved Information: International trade improves information and communication in many ways. For example, traders are more able to access business networks and market information; farmers not yet producing for export observe and learn from the success and problems of those who do. Better information, bought about in part by trade, contributes significantly towards change and development.

About this Report: This is the third National Human Development Report (NHDR) Lao PDR has produced and it examines the relationship between human development and international trade. The Human Development Reports share the single goal of putting people back at the center of the development process in terms of economic debate, policy and advocacy and help to shape a clearer path towards the achievement of the Millennium Development Goals.