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

Phouphet Kyophilavong, Chanthachone Senesouphap and Somnack Yawdhacksa

No 160434, PEP Working Papers from Partnership for Economic Policy (PEP)

Abstract: Laos is a small, open, least-developed country (LDC) in Southeast Asia. However, it is a resource-rich economy with over 570 identified mineral deposits. As a result, Laos has experienced massive inflows of foreign direct investment (FDI) in the mining and hydroelectricity sectors since 2003. Despite the likelihood that resource booms will carry both positive and negative impacts on the Lao economy, this issue has been underresearched in Laos. This study thus lays out a framework to quantify the impacts of resource booms on the macro economy and on poverty in Laos using a computable general equilibrium (CGE) model. 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.

Keywords: International Development; Public Economics; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 29
Date: 2013-07
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Resource booms, growth and poverty in Laos: What can we learn from other countries and policy simulations? (2013)
Working Paper: Resource Boom, Growth and Poverty in Laos: what can we learn from other countries and policy simulations? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:peppwp:160434

DOI: 10.22004/ag.econ.160434

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