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

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.


Issue Date:
2013-07
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/160434
Total Pages:
29
JEL Codes:
D58; Q33
Series Statement:
MPIA
2013-05




 Record created 2017-04-01, last modified 2017-08-22

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