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Utilizing Laos’ Forests for Poverty Reduction

Laos' forestsLaos’ forests may be the key to reducing poverty in the country. The World Bank and the Ministry of Agriculture and Forestry created a new program titled the Lao Landscapes and Livelihood Project. The project, running from 2021 until 2027, seeks to help reduce poverty and kickstart the economy in Laos. The project will cost roughly $57 million and aims to alleviate the economic hardships of the COVID-19 pandemic through the preservation of Laos’ forests.

History of Poverty in Laos

Over the past 30 years, poverty in Laos has decreased dramatically. Poverty went from 46% in 1993 to 18% in 2019, coinciding with rapid growth in GDP. Much of this is a result of farming reform as farmers “moved from subsistence rice cultivation toward the commercial production of cash crops,” increasing income for farmers. However, poverty reduction has recently been slowing down in Laos with a lack of new jobs to drive economic growth and rising inequality.

Additionally, the COVID-19 pandemic is causing even more employment uncertainty. There has also been a sharp decline in tourism due to COVID-19 restrictions and border closures. Workers have to deal with job informality and fluctuations in demand as well. However, remittances, an income source for about 15% of households between 2013 and 2019, contributes to poverty reduction in Laos.

The Role of Forests

There are several ways that the government can ignite poverty reduction, including improving infrastructure and investing in education. However, the Lao Landscapes and Livelihood Project looks toward one of the main sources of income: Laos’ forests.

Much of Laos’ poverty is present in the country’s rural areas, specifically in the central provinces, which are home to an abundance of forests. The main goal of the project is to utilize Laos’ forests to increase investment in sustainable forest management and preserve the country’s “natural capital” while creating employment opportunities that will help reduce poverty. About 70% of Laos is covered in forests and nearly 70% of the population lives in these forest-dense areas. This means that forests can play a key role in igniting economic growth in Laos.

Although the economy improved consistently in the past few decades, Laos’ natural resources have not. The deterioration of natural resources makes “vulnerable rural people more susceptible to floods and droughts while jeopardizing their access to food, fiber, fresh water and income.” This degradation prompts preservation efforts to protect the forests while improving the livelihoods of the people living around them.

Lao Landscapes and Livelihood Project Goals

The project focuses mainly on encouraging economic growth, which slowed during the pandemic. There are three main areas of focus for the project: conservation, tourism and production. Conservation and production relate to new jobs through investment in sustainable practices and facilities. As there is more societal pressure to obtain “good wood,” or environmentally friendly wood production, more companies are willing to invest in sustainable ways of producing wood. Consequently, this may result in nearly 300,000 new jobs in Laos.

Tourism also grows through the protection of the abundant biodiversity in Laos’ forests. Biodiversity is one of the most important, yet quickly disappearing parts of the environment. Therefore, biodiversity protection will not only help the environment but will also attract tourists who wish to see the various plant and animal species that are native to Laos, spurring economic growth.

Looking Forward

The Lao Landscapes and Livelihood Project is one part of the 2030 National Green Growth Strategy. The project intends to utilize the forests of Laos to promote economic growth while also reducing poverty by aiding the federal government in passing legislation and designing policies to align with these priorities. The project also prioritizes gender equality, with roughly 50% of the jobs allocated to women. Overall, the project will ultimately help put Laos back on the right track to continued economic growth and reduced poverty.

– Ritika Manathara
Photo: Flickr

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How the World Bank is Helping Grow Laos’ Economy

Laos’ Economy
The Southeast Asian nation of Laos has a heavily agricultural economy with substantial income from tourism, logging and other natural resources. Although poverty has been reducing across Laos, the distribution of incoming wealth has been unequal. Laos’ beautiful and resource-rich forests are key to building economic strength and sustainable development.

In January 2021, the World Bank approved $57.37 million for the Lao Landscapes and Livelihoods project. This project will involve forest management guidance, small business training, Laotian forest management agencies, villages and small business owners to create plans for forest conservation and economic growth.

Tourism

Laos’ economy relies on its beautiful forest landscapes to draw in tourists. The majority of tourists who come to Laos are from neighboring countries in Southeast Asia, but half of the income from tourism comes from distant international travelers.

Though tourism in Laos is on an upward trend, it could improve with better infrastructure, staffing and management of tourism-based businesses. The Lao Landscapes and Livelihoods project includes training for small business owners and those in the tourism industry to improve their business strategies and bring in more income.

Forestry

Laotians use natural resources both for industry and for sustenance, with forestry as their second-largest economic sector, primarily exporting lumber to Vietnam. Unfortunately, loopholes and poor landscape management allow the government to approve many unsustainable logging projects.

Laos’ landscape offers opportunities for growing more high-quality timber to increase logging income without the destruction of forests. The World Bank plans to collaborate with forest management agencies and businesses to incentivize and incorporate more sustainable business practices that will boost Laos’ economy.

Sustainability

In addition to food, tourism and logging, the forests of Laos also protect villages from floods and soil erosion. The Lao Landscapes and Livelihoods project includes funding for experts to work with forest management agencies to develop more effective wildlife protection policy, as well as funding for forest-friendly infrastructure and livelihood training within targeted villages. World Bank officials will encourage village members to engage in sustainable projects such as weaving, fishponds, home gardens, bamboo production and black chicken raising.

Impact

The World Bank will directly support 600 Laotian villages with 400,000 residents living in targeted protected areas. The programs will go toward addressing gender inequality including the pay gap, focusing livelihood training towards women and with earmarked funding for the most vulnerable community members including the poor and ethnic minorities.

The goal of the Lao Landscapes and Livelihoods project is to protect the natural landscape that benefits all Laotians and reduce income inequality by providing improved economic opportunities for small business owners and impoverished residents. Focusing on the most vulnerable villagers will improve livelihood opportunities for low-income areas. With better tourism management, high-quality timber growing, sustainable forest policy and improved village infrastructure, Laos’ economy can grow and better serve the entire population.

– Elise Brehob
Photo: Flickr