Sustainable Development of Natural Resources in Laos

Asian Journal of Environment and Disaster Management Vol. 3, No. 4 (2011) 475–490 c Research Publishing Services

doi:10.3850/S1793924011001039

Sustainable Development of Natural Resources in Laos: Evaluating the Role of International Cooperation

Juha I. Uitto Evaluation Office, United Nations Development Programme, One UN Plaza, New York, NY 10017, USA. E-mail: [email protected]

Located in one of the most dynamic regions of the world, the Lao People’s Democratic Republic belongs to the group of Least Developed Countries. Laos is landlocked and much of the country is hilly with rugged terrain and only basic infrastructure. The country is characterized by remarkable natural and ethnic diversity. Today the country is changing rapidly. Its larger neighbors wield significant influence. Regional integration is probably the most powerful force of change in Laos and is resulting in rapid economic development in the country. My aim is to explore the challenges of environmentally sustainable development in the face of the rapid change in this country whose economy is still overwhelmingly based on the exploitation of natural resources. An important factor to deal with is environmental governance. Corruption is prevalent, especially with regard to illegal logging. I also discuss the role of external actors, including the United Nations, bilateral donors and the neighboring countries. It is argued that close engagement even in cases where the government may not be responsive to its citizens in a democratic manner is preferable to isolation. Constructive engagement helps both the people and sustainable development. It also balances the influence of neighboring countries wishing to exploit the natural resources of the poorer cousin. Most of the findings are based on research conducted in connection with a comprehensive evaluation of the United Nations Development Program’s contributions to the Lao PDR development results over the past several years. Keywords: Laos, Southeast asia, Sustainable development, Natural resources management, Environment, Energy.

1. Background Located in a dynamic region, Southeast Asia, experiencing in general some of the highest economic growth rates in the world, the Lao People’s Democratic Republic (PDR) still belongs to the group of Least Developed Countries (LDCs) of the world according to the United Nations. Within the world’s nations, it has been ranked 122nd in human development based on an index that combines economic and social indicators, such as health, education and gender equality.1 Both geographical and political factors have conspired against development in the country. Laos is landlocked and much of the country is hilly with rugged terrain and only

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Figure 1

Map showing the areas of high UXO contamination.4

basic infrastructure. The national territory is 236,800 km2 or approximately the size of the United Kingdom, but the population is only 5.7 million. Yet, population increase is rapid, estimated to be 2.8% per annum. Furthermore, the country is characterized by remarkable natural and ethnic diversity. The dominant group, the ethnic Lao, do not even form the majority of the country’s population, but are rather in the 40–50% range.2 The rest of the population belongs to several minority groups, often called ‘hill tribes,’ many of which have barely been integrated into the national mainstream. Laos is also the most bombed country in the world (Fig. 1). During the Second Indochina War, 1965–75, the United States Air Force dropped 2 million tons of bombs on Laos, including more than 300 million anti-personnel ‘cluster bombs’.3 An estimated 30% of these cluster bombs went unexploded and still today pose a real danger to people, especially in the eastern provinces towards the border with Vietnam. People are still today killed or maimed as they happen upon such unexploded ordnance (UXO). Even cattle that wander beyond their designated pastures risk blowing themselves up. The prevalence of UXO is an impediment to expanding farming area in this country where fertile flat land is at a premium.

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Since 1975, the Lao PDR has been ruled by the authoritarian Lao People’s Revolutionary Party (LPRP). The party leadership consists of an old guard that fought the Western backed royalist regime, and subsequently the Americans and their allies during the Vietnam War, in a decades-long struggle for communist rule. Not unexpectedly, the LPDR has been resisting change since it gained power. In 1986, however, Lao PDR embraced market economy while the party maintained its firm grip on the politics. Today the country is changing rapidly. Its larger neighbors wield significant influence on it. Traditionally, Vietnam has held most sway with Lao politics. LPRP has always looked towards its larger neighbor in the east for guidance and has assessed its options taking into account Vietnamese experiences. China is more distant but especially in the northern provinces of Laos the economic ties are close. The relations with the wealthy western neighbor, Thailand, are complex and at times intense. The cross-border trade — both legal and illegal — is thriving, as is labor migration of Laotians to the advanced markets of Thailand. There are at least 200,000 — perhaps even 300,000 — Lao workers in Thailand, of whom more than half are women.5 This relationship is mostly benefiting both parties and the annual remittances from the Lao migrants in Thailand are estimated at $100 million. Nevertheless, there are many downsides to this transnational economy: sale of Lao women into prostitution in Thailand and exploitation of men in dangerous occupations, like fisheries on the Gulf of Thailand, are prevalent. Due to the close linguistic relationship, Thai popular culture is seen as dominating to the extent that at times the government of Lao PDR has banned the performance of Thai pop music in the country. Regional integration is probably the most powerful force of change in Laos and is resulting in rapid economic development in the country. In 1999 Lao PDR joined the Association of Southeast Asian Nations (ASEAN), an influential regional grouping, and the country is in the final stages to join the World Trade Organization (WTO). The aim of this article is to explore the challenges of environmentally sustainable development in the face of the rapid change in this country whose economy is still overwhelmingly based on the exploitation of natural resources. The article also discusses the role of external actors, including the United Nations, bilateral donors and the neighboring countries. It is argued that close engagement even in cases where the government may not be responsive to its citizens in a democratic manner is preferable to isolation. Constructive engagement helps both the people and sustainable development. It also balances the influence of neighboring countries wishing to exploit the natural resources of the poorer cousin. Most of the findings are based on research conducted in connection with a comprehensive evaluation of the United Nations Development Programme’s (UNDP) contributions to the Lao PDR development results during the 2000s.6 The author was the evaluation manager and team member focusing specifically on

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environment and natural resources management. Within this context, the author visited Lao PDR four times in 2006–2007, including a period of field work in March–April 2006. When no specific source is given, the article relies on data and information collected during the evaluation.

2. Evaluation Approach UNDP is the United Nations lead agency working on development issues at the country level. While implementing programs in selected areas of its own competency, UNDP is the main international partner to the government in policy dialogue and capacity development, with the aim of integrating internationally agreed targets, such as the millennium development goals (MDGs) and human rights, into national policies. Furthermore, UNDP usually is the coordinator of all UN activities in the country. In the case of Lao PDR, it goes even further, being the coordinator of the round-table process that brings all official international donors to the table together with the government. The evaluation was designed to assess the overall contributions of UNDP to the national development results over the preceding seven years. During the period covered, UNDP’s purpose was to support the Government of Lao PDR in four main areas: (i) poverty reduction and MDGs, (ii) fostering democratic governance, (iii) energy and environment for sustainable development, and (iv) crisis prevention and recovery (largely focused on the UXO problem). The programs consisted of many types of activities ranging from policy dialogue with and advice to the government regarding planning and implementation of programs, to providing direct assistance to the 47 poorest districts identified in nation-wide surveys. UNDP has also helped the government to set up a statistical monitoring system for tracking the progress towards the MDGs. In addition, the program paid particular attention to important crosscutting issues, such as gender equality. There were seven key evaluation criteria used in the evaluation to assess UNDP’s performance in Laos: (i) relevance and positioning in relation to national priorities; (ii) extent of national ownership of development programs; (iii) contribution of UNDP to national capacity development; (iv) effectiveness of donor coordination and synergy; (v) contribution of policy dialogue to poverty reduction; (vi) resource mobilization; and (vii) appropriateness of shift from rural development to governance. The key questions related to the above criteria that the evaluation sought to answer were organized around UNDP strategic positioning and its contributions to national development results. The former included an analysis of the perceived comparative strengths and support of the program vis-`a-vis major national development challenges, such as the decentralization process in the country, as identified in official policy documents; and an assessment of how UNDP had anticipated and responded to significant changes in the national development


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context, affecting the specific thematic areas, including the environment sector. In this respect, the evaluation also examined issues related to synergies and alignment of UNDP support with other initiatives and partners, as well as systemic issues, such as policy and administrative constraints affecting the program. With respect to the development results, the evaluation examined the effectiveness and sustainability of the program, highlighting the main outcomes (both anticipated and unanticipated, positive and negative) and UNDP contribution to capacity development at the national and sub-national levels. It also provided an in-depth analysis of the main program areas and analyzed the main factors influencing results. Finally, the evaluation identified key lessons that could provide a useful basis for improving program performance, results and effectiveness in the future. The evaluation utilized a range of methodologies, including in-depth reviews of existing documentation on program and project progress and achievements, interviews with government officials, project personnel and civil society representatives, and focus group discussions with intended program beneficiaries. One limitation was that the operation of non-governmental organizations (NGOs) has been severely restricted by the government. Only lately have international NGOs been accepted in the country, mostly as executing agencies for projects promoted by UNDP and aid organizations. The operation of domestic civil society is still mostly confined to government approved entities, such as the Lao Women’s Union, with semi-official agendas. The evaluation team also undertook a limited number of field visits to key program sites in the northern provinces of Luang Prabang and Xieng Khouang. Both contained some of the poorest districts. The former province was selected because of the prevalence of minority ethnic groups and a number of programs supporting their development. The latter is one of the regions most affected by UXO. The governance program designed to address poverty issues by improving government capacity to plan and deliver services to the poorest districts was equally active in both of these provinces. By necessity, the evaluation methods were limited to qualitative research, interviews and purposive sampling of projects to visit. Due to time and budget constraints, it was not possible to utilize tools, such as quasi-experimental techniques or even with/without comparisons. Given the nature of the programs that mostly centered on ‘soft’ assistance, such as policy advice, advocacy and capacity development, the attribution of results to a particular project cannot be ascertained in statistical terms. Nevertheless, the evaluation was designed to collect large quantities of qualitative data, which could be analyzed and triangulated. The concept of triangulation refers to empirical evidence gathered through three major sources of information: perception, validation and documentation. Although the evaluation had a very practical focus — to assess the relevance and results of UNDP’s support to the country both for accountability purposes and

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for learning lessons to improve the organization’s performance — it was obvious that certain theoretical constructs were useful for understanding the development processes. In this article, the focus is on sustainable environmental management. This is an area where power relations related to the control of natural resources are central. The people most dependent on the natural resources for their livelihoods are small farmers and ethnic minorities. Their use rights of the land and resources are easily overridden by the government that blames shifting cultivation for deforestation. As we will see below, the government has severely restricted forest use, while illegal logging controlled by powerful interests continues. This political ecology of resource control is not dissimilar to many other countries.7 Furthermore, the abundance of natural resources, such as forests and hydropower, poses the risk of dependence on them at the expense of other sectors, such as manufacturing. Empirical research has also suggested that reliance on natural resources has a tendency to derail democratic institutions and processes, especially in the poorest countries, leading to a ‘natural resource trap’.8 The paper discusses issues arising from the scrutiny of policies and programs related to the focus area of energy and environment for sustainable development. Importantly, it will discuss what UNDP did not include in its program, the reasons for such omission, and what could be done to rectify such missed opportunities.

3. Dependence on Natural Resources The Lao economy and people are highly dependent on the abundant natural resource base that the country is fortunate to possess. Managing this legacy sustainably is one of the great challenges for the future as the country is undergoing rapid change. 3.1. Environment and Local Livelihoods Four in five Laotians still live in rural areas depending directly on the land and the ample resources provided by the Mekong and its tributaries. Agriculture is responsible for producing 47% of the GDP, while industry’s share is only 27%. The agricultural sector is dominated by small individually operated farms. In addition, people are utilizing forest products, both wood and non-timber forest products (NTFPs), such as mushrooms, to supplement their income and nutrition. Fishing and hunting remain important activities, especially for the hill tribes. The Mekong, Southeast Asia’s largest river that flows through Laos from north to south, provides the lifeline and much of livelihoods for the people. The Mekong river basin covers 90% of the total area of Lao PDR. Water development in Laos is still at early stages and the river is rather pristine when it runs through the country. Still the World Wide Fund for Nature (WWF) has included Mekong amongst the world’s top ten rivers at risk.9 The main risk comes from overfishing. The Mekong


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contains some 1,200–1,700 fish species of which 62 are endemic to the basin. While fisheries do not play an equally important role in Laos as in the lower Mekong basin, fish and aquatic animals form the main source of animal protein to most Laotians. Most of the fisheries are for subsistence and the utilization of illegal fishing methods is reportedly high. Mekong wetland resources have been found to be particularly important for the livelihoods of the poor and vulnerable people.10 It is estimated that the irrigated area in Laos, while low compared with neighboring countries like Thailand and Vietnam, grew at an average annual rate of 34.8% between 1962 and 1998.11 As the area under irrigation is growing fast, rice paddies are becoming an equally important source of food for rural villagers. A recent appraisal of a new irrigation scheme found that 90% of the households surveyed regularly engaged in fishing and that fishing provided 15% of the household income. In turn, 90% of the fish production came from rain-fed rice fields indicating that increasing irrigated agriculture could also increase fish production.12 The biological resources in the country, whether pertaining to land or water, are particularly rich and their importance to local livelihoods is significant. Biological diversity is seen to contribute directly to poverty reduction through a number of avenues, including food security and income generation. In addition, biodiversity enhances ecosystem resilience and reduces vulnerability to fluctuations in weather and climatic conditions. A local study found a wide range of products used by households residing close to a protected area in Laos, ranging from various tree, bamboo and palm species to large numbers of wild vegetables, fruits, grasses, vines, medicinal plants and mushrooms to birds, snakes, frogs, fish, porcupine, deer and wild pigs.13 Biological resources are thus essential for local populations who directly depend on the health of the ecosystems for their survival and livelihoods. 3.2. Environment and the National Economy Apart from the reliance of local populations on the land, forests and aquatic resources, the country’s cash economy is directly reliant on the same. Thanks to its low population density — just some 28 people per km2 — the territory of Lao PDR is still rather forested. Regretfully, the forest cover is being reduced at alarming rates, from a base estimate of 70% in 1940 to around 41% in 2002.14 The current annual deforestation in 2004 was estimated at 53,000 ha.15 Although, Laos remains one of the most forested countries in Southeast Asia, with a rich biodiversity, this state of the environment is threatened by the rapid deforestation and conversion of natural habitats to other uses. The conflicts in resource use are potentially significant. Much of the deforestation can be traced back to illegal logging. It is estimated that 45% of logging taking place in Laos is illegal.16 Forestry stands for about 10% of GDP and produces about a quarter of Lao PDR’s export earnings. Much

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of the exports are in the form of logs and unprocessed wood. The domestic wood processing industry that could add significant value to the produce exported is largely lacking. A strong case can be made that Lao PDR is mismanaging its most vital natural resource and not benefiting from it to the extent it easily could. In this regard, corruption plays a major part in illegal logging and is deeply ingrained in the political culture of the country.17,18 Furthermore, four-fifths of domestic cooking is done with fuel wood. It is estimated that the annual amount of wood cut by local communities is about 4–5 million m3 .19 However, household consumption of wood remains a minor factor in deforestation compared with logging. Apart from forest products, another main source of foreign exchange is hydropower. It is estimated that the country has the potential of producing 23,000 MW of hydropower, of which only a minor fraction is currently developed. Laos has nine operating hydropower plants with a combined capacity of 624 MW. The government places significant hopes on hydropower development as a driver for development. A major hydropower station, Nam Theun 2, was constructed with financing from the Asian Development Bank and the World Bank and inaugurated just in December 2010. It is scheduled to add another 1,070 MW to the electricity production.20 While beneficial to the economy, hydropower is problematic in a variety of ways. Laos exports 65–80% of the power it produces. Most of it goes to Thailand at what some argue are below market prices. Its dependence on the exports to the powerful neighbor is high, while at the same time many rural villages even in the vicinity of the power plants remain powerless. Experience from around the world shows unequivocally that the availability of electricity is strongly and positively correlated with economic and social development.21 Electricity allows people to enhance their productivity, it facilitates education and information flow, and provides security during dark hours. Again, there is a risk that electricity production for export is depriving local people from much needed development opportunities. Such unintended consequences have been observed elsewhere around energy development projects.22 One of the most promising avenues for economic development in Laos is tourism. Since the country opened up, it has become increasingly a destination of foreign tourists. International tourism is today the largest service export for the country and the visitors fall into various categories. In 2004, there were some 900,000 international tourists visiting Laos and bringing in some $119 million in revenues.23 By number, the most part — some 54% — come across the borders from Thailand, Vietnam and China. Laos also has a long history as part of the hippie trail and backpacker routes. However, today these strains of tourism are increasingly supplemented by package tours as well as individual travelers of more established and wealthier status. These latter types come to Laos precisely because it is still more pristine than most


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of its neighbors. Places like the country’s second largest city, Luang Prabang — that features on UNESCO’s World Heritage Site list for its cultural uniqueness and well-preserved traditional architecture — nestled in the bend of the Mekong between lovely forested hills, attract Western and Japanese tourists in ever larger numbers. Eco-tourism is similarly on the rise. Lao PDR must be extremely careful that its well justified efforts towards economic advancement do not backfire by way of destroying its amazing natural and cultural diversity. Most importantly, all of these efforts at economic development may come with a high environmental cost unless managed diligently. The impact on the local people and their natural resources based economy is immediate. If forests are cut or cordoned off for logging, this limits access to these resources, including NTFPs, by the people who have relied on them for generations. Similarly, when land is set aside for hydropower development or flooded under dams, this is away from the people who used to live there. At the same time, globally significant biodiversity resources are lost as some of Asia’s largest remaining tropical forests are being felled. The direct value of biodiversity in Laos has been estimated at $650 million per year at the national level.24 This does not take into account the intrinsic value of maintaining the diversity of life, nor aesthetic damage to the landscape.

4. Protecting the Environment: Policy and Praxis The official attempts to control logging go as far back as 1991 when a new forest harvesting and logging plan system was introduced nationally, with subplans for the provinces set by the government. It created a nationwide logging ban and ordered the Ministry of Agriculture and Forestry (MAF) to prepare measures ensuring that management, logging, processing and trade followed and respected laws and regulations. The decree also made provisions for forests to be surveyed and classified into protection, conservation, regeneration and economic/production categories. Initially the logging ban was well implemented causing log production in 1992 to fall to half of that of the previous years. However, many provinces continued to harvest above their allocations to create additional funds for development projects and there were many irregularities concerning log sales. In 1993, log production again increased dramatically to levels in excess of those recorded before the ban. The following year, the prime minister issued an order to cease the timber permits that were not approved by related ministries and the government. According to the order, provinces were to cease the export of timber and sawn wood. For the export of sawn wood, the government would give the permission strictly to only some companies. In practice, this consolidated timber export to the three state owned enterprises. This system continued until 2000 when the Prime Minister’s Order nr. 11/PM was issued to return to the previous system in which all harvest and logging plans

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were allocated to the provinces. The Prime Minister’s Order nr. 18/2002 on forest management policy for 2002–2003 required MAF to reassess national forest cover, allocate and designate all forest categories according to present conditions, determine regions where logging bans should be placed on natural forests, and develop strategies for forest conservation and reforestation. Export of logs and sawn timber from natural forests was banned in order to promote domestic processing of wood products. The Forestry Strategy until 2020 (FS2020) prepared under the leadership of MAF was launched in 2005.25 It presents the objectives of the forestry sector development, and a set of policies, programs and actions in the sector. FS2020 is set within the overarching objective of poverty eradication. It specifies three major sector objectives that must be achieved to contribute to poverty alleviation:

• To maintain a healthy and extensive forest cover as an integral part of rural livelihood support system, including stable water supply and mitigation of natural disasters; • To generate a sustainable stream of forest products for domestic processing and consumption (many of them for eventual export generating adequate household incomes), contributing to the country’s foreign exchange resources and fiscal revenue, and increasing direct and indirect employment; and, • To preserve the existence of many species and unique habitats, which are threatened with extinction. FS2020 is thus clear on the importance of forests, not only for the national economy, but also for the rural poor who depend on forest products for their subsistence and livelihood, as well as the environment. It recognizes watershed management as important for essential economic sectors, including sustainability of hydropower and tourism. Adequate forest cover is seen essential also for sustaining the national water resources and for the continued operation of hydropower installations. As is so often the case, the well-intentioned policy — even if it were implemented — comes with unfortunate unintended consequences. The ban on export of unprocessed wood could in principle encourage sustainable forest harvesting for the development of industry that adds value to the timber, such as furniture making. However, the logging ban has mostly affected the local people and communities, while illegal logging under the auspices of the provincial authorities continues unchecked. A contributing factor to this is the high level of autonomy by the provinces. The provincial governors are without exception members of the LPRP and hold the rank equivalent to minister at national level. There is thus no credible authority that could bring them to heed the laws. The party leadership also has a close relationship with the eastern neighbor, Vietnam, which is the destination of most of the logs. One high government official in Vientiane told the author that the logging


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and export ban is fully enforced, except when some friends in the neighboring country need wood for an important temple they are building. It was impossible to tell whether the official was being serious or sarcastic. Often, the logging operations do not take fully blatant forms of clear cutting, like in some other countries. Rather, when new roads or power lines are being built through the forest, the corridors are cut several hundred meters wide instead of being just adequate for the purpose at hand. The timber that is thus cut is then trucked across the eastern border. In addition to the obvious environmental damage, the country and the provinces themselves lose significant amounts of income by exporting the wood without adding any value through processing. Short-term profit to the few government leaders trumps such rationality.

5. Role of External Support A few years ago the Government of Lao PDR adopted a comprehensive National Strategy on Environment.26 Similarly, the five-year plan NPGES emphasizes the importance of sustainable management of natural resources.27 The fact that the NGPES is now aligned with and incorporates the globally agreed MDGs can be seen as a major achievement to which UNDP directly contributed through advice to and dialogue with the government. Yet the principles seconded in these admirable documents again are not fully incorporated into practice. While promoting the incorporation of MDGs and the principles of democratic governance into government policies through its programs, UNDP has stopped short from addressing head-on politically sensitive issues, such as illegal logging. This has in fact been a conscious decision on behalf of the UNDP leadership in the country. Instead, the organization has focused on areas where it has deemed it more feasible to make progress without stepping on important toes. It is understandable that as a guest, partner and advisor of the government UNDP must work carefully to advance its agenda and the global principles of good governance, equality, human rights and human security. Confrontation jeopardizes any progress made in a sensitive environment. Yet other actors, including governmental aid agencies of the Nordic countries as well as the World Bank, have successfully addressed issues pertaining to forest management. For instance, the Sustainable Forestry and Rural Development project funded by the Finnish Government with the World Bank made significant headway in promoting sustainable co-management of forests whereby new models of community ownership and management have been tested and replicated over increasing areas. Such approaches are likely to reduce illegal logging, as local people who depend on and benefit from the forest assume increasing control over the resource. Laos is highly dependent on official development assistance (ODA). While the share of ODA has been slowly declining, it was still estimated at $390 million in 2004, standing for 18% of GDP and more than 80% of public investment in the

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country. This ratio is by far the highest for any country in the Mekong region. Money-wise, the three largest donors in Laos — Asian Development Bank, the World Bank and the Government of Japan — together contribute about 60% of the assistance, while other important donors include France, Sweden, Germany and Australia. The UN’s financial contribution is relatively small, less than 30% of the total ODA. Of this, UNDP’s share is about one-third, still amounting to a respectable amount. However, the amount allocated to environment-related issues — including those central to social and economic development in the country, such as forest and water management — is minimal. In 2005, UNDP’s program delivery in these areas amounted only to some $317,000. In the current UN development assistance framework approved for a period of five years in 2007 environment entirely disappeared as a separate program. What remained was absorbed under poverty reduction and economic development. With such small contributions and low profile it is evident that UNDP’s (and that of the UN as a whole) leverage on promoting sustainable management of natural resources with the government is very limited. In the meantime, the neighboring countries are consolidating their influence on Laos. As member of ASEAN, Lao PDR’s political and economic development is more than anything shaped by its interactions with the powerful regional grouping. However, ASEAN’s policy of non-interference in its members’ internal affairs is not likely to affect positive change in the country. Thailand has already transformed itself from an aid recipient to an emerging donor, which funds programs in Laos and elsewhere through its Thailand International Cooperation Agency (TICA). Supporting development in Laos is a worthwhile goal even if it’s driven by enlightened self-interest. Naturally, Thailand has its particular interests in the exploitation of Lao natural resources. Similarly, the centrally planned neighbors to the north and east, China and Vietnam — the main destination of logs from Laos — are increasing their aid flows through investments in infrastructure, dams, energy and tourism. The projects supported by the neighboring countries are outside the normally recognized ODA and not coordinated with it. Similarly, they tend to be free from any social or environmental safeguards that are important to guarantee sustainable long-term development in Laos. It would be a high priority to bring them to the round-table process with the Government of Lao PDR, the western donors and the multilateral organizations. As stated above, environment is not a major feature in UNDP’s program in Lao PDR. The 2002–2006 UN development assistance framework defined two national development goals related to natural resources and the environment: (i) preserving Lao PDR’s natural resources, especially forest and water, and using them in the most sustainable way; and (ii) protecting forests — reforestation, preservation and management of national protected forests receiving special attention. Most of these


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activities were left to other UN agencies except UNDP active in the country. The role of UNDP was defined to expand national capacity to comply with global environmental conventions, regulatory regimes and funding mechanisms for environmentally sustainable development, including assisting the government in the development of the regulatory framework of the Environmental Protection Law, the formulation of a biodiversity strategy and action plan, and human resources development. In addition, UNDP participated in regional projects providing support to the Mekong River Commission and promoting biodiversity conservation and sustainable use in the Mekong basin wetlands. It subsequently withdrew from these activities. Most of UNDP’s support to the environment sector pertains to enabling the country to fulfill its obligations towards multilateral environmental agreements (MEAs), such as the Convention on Biological Diversity (CBD) and the UN Framework Convention on Climate Change (UNFCCC). The 1999 Environmental Protection Law designates the Science, Technology and Environment Agency (STEA) of the Prime Minister’s Office as responsible for coordinating, managing and monitoring activities related to the environment both at the national and provincial levels, while line ministries, such as MAF, would carry out projects within their purview. UNDP’s support has been mostly successful in terms of incorporating environmental concerns into national plans. It is also significant that UNDP has worked successfully to enhance national ownership of the regional cooperation around the Mekong, linking wetlands conservation and sustainable use to rural livelihoods and to sustainable development models. However, given the centrality of natural resources to the economy and sustainable development of Laos, UNDP has shied away from taking a coordinating role in policy dialogue in this area — a natural role it could have assumed, given its mandate amongst the donor community. This appears to be a missed opportunity to incorporate environment and natural resources management explicitly into the area of good governance. While other agencies and donors may have the mandate to take the lead in the environment, and especially the forestry sector, UNDP could do better to incorporate this into its policy dialogue with the Government of Lao PDR.

6. Conclusions: Prospects for Sustainable Development Still an LDC, Laos depends on natural resources for its development. Despite improved intentions, the country’s environment is still threatened due to conflicting demands, such as the development of hydropower with large dams vs. preserving the sites for local people and tourism. Lao PDR now has a legal and policy framework for natural resources management and environment, which may be reflected in further institutional developments. The 6th National SocioEconomic Development Plan emphasizes the productivity of the agriculture sector

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and pays increased attention to forest conservation and development. The plan links economic growth to social progress, equity, cultural development and environmental conservation. It is thus evident that the needed policy frameworks are now in place. What is now needed is effective enforcement of the rules and implementation at the field level. Natural resource riches, such as in Laos, can actually become a trap leading to overdependence on exports based on the non-processed products and the underdevelopment of other sectors, such as manufacturing. It is therefore essential that Laos diversifies its economic base, refrains from exporting logs and similar unprocessed natural resources to its neighbors, and utilizes its natural endowment to its benefit. It is also important to deal with corruption head-on. Transparency International, an international NGO and an authority that tracks corruption, ranks Lao PDR as 150th amongst the 180 countries on its list. UNDP could play a much stronger role in incorporating natural resources management into its program, especially through the governance window. Operationalizing the policies that are already in place would be a good start. UNDP could assist the government in this task through support of sustainable natural resources management and environmental governance at the local level. It should emphasize the economic benefits of sustainable management of the environment through piloting opportunities for developing natural-resource-based income generation (including ecotourism) and watershed management at the provincial level. Given that the National Strategy on Environment and the FS2020 provide a framework for sustainable development and that the poorest people in Laos are highly dependent on sustainable resources, this strategy would fit well with the UNDP poverty reduction and governance priorities. In a country with limited human resources and capacity in either the public or private sectors, international partners can provide important assistance in support of the social and economic transition towards openness and to develop national capacities that allow a country like Lao PDR to enter the regional and international scene as an equal. There are also many areas where good governance and policy development must be supported for the benefit of the country and its population, and for the sustainable development of the natural resources that Laos will still long be dependent on.

References 1. UNDP Human Development Report 2010, The Real Wealth of Nations: Pathways to Human Development (Published for the United Nations Development Programme by Palgrave Macmillan, New York, 2010). http://hdr.undp.org/en/reports/global/hdr2010/. 2. Evans, G., A Short History of Laos: The Land in Between (Allen & Unwin, Crows Nest, NSW, Australia, 2002). 3. These official figures are based on the Congressional Record by the U.S. government on May 14, 1975. However, it is widely believed that the actual figure was much higher.


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4. UXO Lao Annual Report 2004. 5. Lao PDR National Human Development Report, International Trade and Human Development. (Committee for Planning and Investment, National Statistics Centre and United Nations Development Programme, Vientiane, 2006). http://www.undplao.org/newsroom/publications.php. 6. UNDP Evaluation Office, Assessment of Development Results: Lao PDR — Evaluation of UNDP’s Contributions. Authors: G. Byron, G. Porter, J. I. Uitto and A. G. Guerrero (United Nations Development Programme Evaluation Office, New York, 2007). http://www.undp.org/evaluation/adr/laos.html. 7. Blaikie, P. M. and J. S. S. Muldavin, ‘Upstream, Downstream, China, India: The Politics of Environment in the Himalayan Region.’ Annals of the Association of American Geographers, 94(3), 520–548, (2004). 8. Collier, P., The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done about It (Oxford University Press, Oxford and New York, 2007). 9. WWF, World’s Top 10 Rivers at Risk (WWF Global Freshwater Program, Zeist, Netherlands, 2007). http://assets.panda.org/downloads/worldstop10riversatriskfinal march13.pdf. 10. Friend, R., E. Meusch, S. Funge-Smith and J. Yhoung-Aree, ‘Wetlands and Aquatic Food Resources in the Lao PDR: A Case Study from Attapeu.’ Juth Pakai (New Thought), Issue 5: 17–25, 2006. http://www.undplao.org/newsroom/juthpakai.php. 11. IWMI, ‘Water Governance in the Mekong Region: The Need for More Informed Policy-making,’ Water Policy Briefing, (22), (International Water Management Institute, Colombo, 2006). http://www.iwmi.cgiar.org/Publications/Water Policy Briefs/Landing Pages/WPB22.aspx. 12. Nguyen-Khoa, S., L. Smith and K. Lorenzen, Impacts of Irrigation on Inland Fisheries: Appraisal in Laos and Sri Lanka, Comprehensive Assessment Research Report 7 (Comprehensive Assessment Secretariat, International Water Management Institute, Colombo, 2005). http://www.iwmi.cgiar.org/Assessment/Publications/research reports.htm. 13. Emerton, L., Making the Economic Links between Biodiversity and Poverty Reduction: The Case of Lao PDR (IUCN — The World Conservation Union, 2005). http://cmsdata.iucn.org/downloads/making the economic link between biodiversity and poverty. 14. FAO, Country Brief: The Lao People’s Democratic Republic (Food and Agriculture Organization of the United Nations, Vientiane, 2006). 15. World Bank, Lao PDR Environment Monitor 2005 (The World Bank, Washington, DC, 2006). 16. UNDP Asia-Pacific Human Development Report, Tackling Corruption, Transforming Lives: Accelerating Human Development in Asia and the Pacific (United Nations Development Programme, Colombo, 2008). http://hdr.undp.org/en/reports/regional/ asiathepacific/name,10811,en.html. 17. Keuleers, P., Corruption in the Lao PDR: Underlying Causes and Key Issues for Consideration (United Nations Development Programme, Bangkok, 2002). 18. Stuart-Fox, M., ‘The Political Culture of Corruption in the Lao PDR,’ Asian Studies Review, 30, 59–75, (2006). 19. World Bank (2006), op cit. 20. Ibid. 21. Goldemberg, J. and T.B. Johansson, World Energy Assessment: 2004 Update (United Nations Development Programme, New York, 2004). http://www.undp.org/environment/sustainable-energy-library.shtml 22. Uitto, J. I., ‘Small Hydel for Environmentally Sound Energy in Remote Areas: Lessons from the Indian Himalayas,’ Focus on Geography, 51(2), 1–8, (2008).

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23. Lao PDR National Human Development Report (2006), op cit. 24. Emerton (2006), op cit. 25. Government of Lao PDR, Forest Strategy to the Year 2020 (FS 2020) of the Lao PDR (Ministry of Agriculture and Forestry, Vientiane, 2005). 26. Government of Lao PDR, National Strategy on Environment to the Year 2020 and Action Plan for the Years 2006–2010 (Science, Technology and Environment Agency, Prime Minister’s Office, Vientiane, 2004). 27. Government of Lao PDR, National Growth and Poverty Eradication Strategy (Vientiane, 2004).