Impact of Climate Change on Poverty in Laos

The climate change is global problems. It is predicted to have more severe impact on developing country which most of population are poor. The main impact of climate change on poverty is changing crop productivity and commodity prices. However, there are few studies on the relationship between climate change and poverty. Therefore, this study will use Laos which has a high share of agriculture sector on GDP and high poverty rates as a case study to assess the impact the climate change on national wide-economy and climate change using CGE model. The preliminary result shows that climate change has serious impact of Lao economy in term of declining GDP. On the other hand, the micro-simulation indicates that the impact on poverty was negligible. This is because the households in Laos are autarky and not affected by the changes of prices and wages due to climate change.Environmental Economics and Policy, Food Security and Poverty,

Willingness to Pay for Cleaning up Road Dust in Vientiane

This paper sets out to estimate residents’ Willingness to Pay (WTP) for cleaning up road dust in urban areas of Vientiane, Laos. The analysis relies on the Contingent Valuation Method (CVM) and seeks to identify the factors affecting WTP. Based on a sample of 6,590 respondents, the results show a mean WTP of 7069 kip (USD0.86) per person per month. This amounts to 4.7% of residents’ average monthly income. Education and income have a statistically positive impact on WTP. Conversely, the number of children in family has a statistically negative impact on WTP. These results offer information to policy makers dealing with the dust problem on urban roads in Vientiane.Key words: Road dust; Contingent valuation method (CVM); Willingness to pay; Vientian

Impact of irrigation on aquatic wetland resources : a case study of That Luang Marsh, Lao PDR

This study assesses the impact of irrigation on That Luang Marsh (TLM) in Vientiane, the capital city of the People’s Democratic Republic (PDR) of Laos. It was carried out by Phouphet Kyophilavong from the Faculty of Economics and Business Management at the National University of Laos. The study finds that the economic benefits provided by the marsh (particularly in terms of the fish it supplies to local people) far outweigh the benefits provided by the extraction of water for irrigation. As extraction of water for irrigation is threatening the ecology of the marsh and its ability to maintain a viable stock of fish, it is clear that the amount of water extracted for irrigation should be reduced. The report recommends that a minimum level for the water in TLM should be set to ensure the conservation of its precious wetland ecosystem. The report finds that, on balance, this would have a positive impact on the livelihoods of local people. This means that the conservation of the marsh makes good economic sense. To help the farmers who would be negatively affected by these measures, the report shows how they could be trained to use irrigation water more effectively, grow alternative crops that require less water than rice, catch fish and collect vegetables

Policy options deal with resources booms in Lao PDR

Resource booms can result in overvaluation of the national currency, an effect commonly referred to as Dutch disease. Laos is a resource-rich economy in terms of mining and hydropower, but the government has not formed relevant policy to deal with this issue. Studies show that resource-rich countries can suffer from slow growth compared with resource‐poor countries often due to effects of Dutch disease, conflicts, and rent seeking. This brief investigates and considers policy options: diversification of the economy; management of fiscal and monetary policy; balancing the budget; reduction of external borrowing; rapid repayment of debt; and setting up funds for future expenditure

Twin Deficits in the Lao PDR: An Empirical Study

In this paper, we investigate the dynamic relation between the budget deficit and the current account deficit in the Lao PDR from 1980 to 2010. We apply an approach that uses cointegration and an autoregressive distributed lag (ARDL) combined with a Granger causality within a vector error correction framework (VECM). The results disclose that a long run relation exists between the two variables. There is long run bidirectional causality between the budget deficit and the current account deficit that supports the twin deficit hypothesis and confirms the strong Granger causality between the budget deficit and the current account deficit in the Lao PDR. Key words: Government budget deficit; Current account deficit; ARDL bounds testing; Granger causality; the Lao PD

International relations in the environmental Kuznets curve - theoretical considerations

Purpose: This study aims to develop the economic model of the environmental Kuznets curve that would show the effect of international trade on the environment's aggregate pollution. Design/Methodology/Approach: We will examine two areas with different economic policies. Following the commonly adopted terminology, the first, more developed area will be called Home Country (Home), while the other one – Foreign Country (Foreign). Home and Foreign are placed in different environmental Kuznets curves. Findings: In this economic model, the trade exchange results in increased growth of both countries, affecting the degradation of their environment, with the perspective of the turning point being crossed faster in a less developed country. This is a new point of view in the literature on the subject. Practical Implications: General recommendations that can be formulated based on the model include, among others, influencing the income elasticity of demand for environmental quality. This can be done by increasing economic policies to support structural changes in the economy, get the public sector more involved in environmental protection, and raise social awareness of the necessity to protect the environment. Originality/Value: The environmental Kuznets curve concept got spread at the beginning of the 1990s. However, it has not been used to refer to the effects of international economic relations, e.g., trade, which have increasingly influenced economic growth today. The model presented in the article contributes to filling this gap.peer-reviewe

Impacts of trade liberalization in the least developed countries: evidence from Lao PDR

This study empirically investigates the effects of tariff reductions in a least developed country on its economy. Specifically, we focus on tariff reductions based on the ASEAN Free Trade Area (AFTA) in Laos. F irst, we analyze how the reduction of AFTA tariff rates in Laos affects Lao imports from AFTA membe r countries. Our main finding is that the reduction of AFTA tariffs in Laos does not significantly chang e Laos’ imports. Second, we investigate their effects on plant-level employment. Consistent with the observa tion of a negligible change in Laos’ imports, we find no significant changes in plant-level employ ment. In short, although Laos decreased its tariff rates against other AFTA members, imports from them d id not significantly increase, and no significant changes occurred in employment. We discuss several possible reasons for these insignificant effects

Revisiting the emissions-energy-trade nexus: Evidence from the newly industrializing

This paper applies Pedroni's panel cointegration approach to explore the causal relationship between trade openness, carbon dioxide emissions, energy consumption and economic growth for the panel of newly industrialized economies (i.e. Brazil, India, China and South Africa) over the period of 1970–2013. Our panel cointegration estimation results found majority of the variables cointegrated and confirm the long-run association among the variables. The Granger causality test indicates bi-directional causality between carbon dioxide emissions and energy consumption. A uni-directional causality is found running from trade openness to carbon dioxide emission and energy consumption, and economic growth to carbondioxide emissions. The results of causality analysis suggest that the trade liberalization in newly industrialized economies induces higher energy consumption and carbon dioxide emissions. Furthermore, the causality results are checked using an innovative accounting approach which includes forecast-error variance decomposition test and impulse response function. The long-run coefficients are estimated using fully modified ordinary least square (FMOLS) method and results conclude that the trade openness and economic growth reduce carbon dioxide emissions in the long-run. The results of FMOLS test sound the existence of environmental Kuznets curve hypothesis. It means, trade liberalization induces carbon dioxide emission with increased national output, but it offsets that impact in the long-run with reduced level of carbon dioxide emissions

Does J-Curve Phenomenon Exist in Case of Laos? An ARDL Approach

This study aims to test the existence of J-curve phenomenon in Laos’s economy using quarterly data over the period of 1993-2010. The ARDL bounds testing approach to cointegration is used to examine short run as well as long run impact of real depreciation of Lao kip on Lao trade balance. The empirical results suggest that there is J-curve effect in case of Laos. The impact of real depreciation of the Lao kip on Lao trade balance is insignificant in long run. In short-run, real depreciation has inverse impact on Lao’s trade balance. The long-run trade balance is determined by domestic income

Resource Booms, Growth and Poverty in Laos -What Can We Learn From Other Countries and Policy Simulations?

Abstract. Laos is a resource-rich economy with over 570 identified mineral deposits. Despite the likelihood that resource booms will carry both positive and negative impacts on the Lao economy, this issue has been under-researched in Laos. This study uses a computable general equilibrium (CGE) model with the goal of providing policy recommendations to mitigate the negative effects of Dutch disease. In order to investigate the impact of the mining sector on the Lao economy, we assume that the stock and productivity of capital both increase in the mining sector. We find that the higher capital stock and productivity led to increased value added, production, exports and investment in the mining sector, resulting in higher real GDP, exports and investment. Unfortunately, the associated Dutch disease effects (particularly real exchange rate appreciation) negatively impact real production and value added in agriculture, industry and government services. Suitable macroeconomic management and prudent administration of windfall income from mining are crucial