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Rationale of the study
Poverty is a pervasive issue affecting nearly every country, regardless of its level of development, with significant variations in its extent and measurement Over 1 billion individuals live on just $1.25 a day for basic needs like food, medicine, and shelter, a condition defined as "Extreme poverty" by the World Bank To combat this, the United Nations has implemented poverty reduction strategies as part of its millennium goals, emphasizing the critical role of governments in creating and executing effective solutions to alleviate poverty.
Laos, a country rich in natural resources yet facing significant poverty challenges, prioritizes poverty reduction in its socio-economic development strategy Since its liberation, the Lao government has implemented targeted policies to support income improvement and enhance access to essential social services for the poor However, the country faces several challenges, including disparities in development conditions, decreasing international support for impoverished nations, the potential widening of income gaps due to globalization, and the adverse effects of climate change on agriculture, which is the primary income source for many rural residents.
Northern Laos is comprised of eight provinces: Phongsaly, Luangnamtha, Oudumxay, Bokeo, Luangprabang, Huaphanh, Xayabury, and Xiengkhuang As of the 2018/2019 statistics, the average poverty rate in Northern Laos was 20.7%, which is notably higher than Central Laos at 17.7% and slightly lower than Southern Laos at 21.5%, indicating a significant poverty challenge in the region according to the latest report from the Statistic Bureau in 2020.
Poverty alleviation for sustainable development has garnered global interest, yet the role of local communities in northern Laos remains overlooked by international policymakers and scholars While some studies have explored aspects like food security and living conditions, comprehensive research on poverty reduction strategies, influencing factors, and community-based models in these provinces is lacking Previous research has primarily focused on governmental approaches to poverty, neglecting the significant impact of home-based businesses in addressing poverty reduction solutions.
Sustained poverty in Northern regions significantly hampers economic participation, entrepreneurship, and human capital development It limits local consumption and stifles the growth of inclusive markets, while also exacerbating health, education, and socio-economic barriers This situation prevents Northern Lao communities from fully engaging in and benefiting from private sector-led economic activities and job creation Additionally, high poverty rates threaten long-term political and social stability in the North.
Research on poverty in Northern Laos highlights the need to evaluate the effectiveness of government, NGO, and home-based business efforts in poverty reduction Recent participatory models have shown promise in sustainable development, offering a comprehensive view of poverty challenges in the region This study utilizes business administration theories to analyze barriers such as market access, finance, skills, and infrastructure that impact poverty outcomes It aims to provide actionable recommendations for public and private sector interventions that foster market-based solutions and inclusive business models By exploring opportunities for idea crowdsourcing and value chain participation, the research seeks to catalyze impact investing to alleviate poverty Ultimately, this approach aims to address the root causes of poverty, enhance economic participation, and promote entrepreneurship among vulnerable communities, contributing to sustainable poverty reduction and economic growth in Northern Laos.
Research objectives and research tasks of the thesis
The research aims to provide recommendations for poverty reduction in the Northern Provinces of Laos To accomplish this goal, specific research tasks must be undertaken to gather relevant data and insights.
First, systematize the foundational theories related to poverty reduction towards sustainable development in the Northern provinces of Laos.
Assess the current state of poverty reduction efforts among vulnerable communities and local producers in the Northern provinces of Laos to identify opportunities for enhancing market linkages and participation This evaluation will clarify both the successes and challenges faced in poverty alleviation within these regions.
Third, develop practical, market-driven solutions and tools to stimulate pro- poor private sector investment and business models targeting poverty reduction outcomes in the Northern Laos region.
Research subject and research scopes
Research subject
Poverty reduction towards sustainable development in the Northern provinces of Laos.
Research scope
- Scope of content: the thesis focuses on main activities in poverty reduction in the Northern provinces of Laos toward SDG 1.
- Scope of geography: 8 provinces of Northern Laos (Phongsaly, Luangnamtha, Oudumxay, Bokeo, Luang Prabang, Huaphanh, Xayabury, Xiengkhuang).
- Scope of time: Secondary data focus on the period 2000 to 2021.
Recommendation apply for period from nơ to 2030
Research questions
The research focuses on answering the three following research questions:
(1) What is the dimentions to analyze poverty reduction?
(2) What are achievement and limitations of poverty reduction in the Northern provinces of Laos?
(3) How to conduct poverty reduction in the Northern provinces of Laos?
Research methodology
Research approach
This thesis employs a mixed-methods approach, integrating qualitative, policy, and action research to explore the complexities of poverty in northern Laos Through structured and semi-structured interviews with local residents, business owners, and officials, the study captures individual experiences and perceptions of poverty, revealing underlying economic behaviors and challenges in accessing services Key informant interviews with local leaders provide valuable insights into the regional context and the efficacy of poverty reduction strategies Immersive ethnographic methods, including participant observation, allow researchers to engage with communities, offering a deeper understanding of the socio-cultural dimensions of poverty and the subtle practices that influence local economic conditions.
A comprehensive historical and policy analysis is essential for a doctoral thesis on poverty reduction in the northern provinces of Laos, as it contextualizes the current poverty landscape and the evolution of alleviation efforts This analysis begins with a thorough historical review, examining socio-economic developments from pre-colonial to post-colonial periods, and identifying significant events that have influenced wealth distribution and livelihood opportunities Utilizing archival documents, historical texts, oral histories, and economic data, the research also investigates the evolution of poverty alleviation policies, assessing their design, implementation, and outcomes A critical examination of legal frameworks and the roles of government agencies, NGOs, and international donors is necessary to evaluate the effectiveness of these policies across different population segments Comparing Laos' strategies with those of other nations facing similar challenges can reveal valuable insights and best practices Engaging with various stakeholders, including policymakers and affected communities, highlights practical implementation challenges Ultimately, synthesizing historical context with policy effectiveness will lead to informed recommendations aimed at enhancing poverty reduction efforts, while maintaining a critical perspective on the complexities influencing policy success or failure This analysis can significantly enrich academic discourse and provide a practical roadmap for policymakers committed to alleviating poverty in the region.
Data collection
The analysis utilizes secondary data sourced from the Lao National Bureau of Statistics and the National Office for Poverty Reduction, along with updates from the World Bank and international organizations examining poverty in Laos, particularly in the northern provinces Additionally, reports from these northern provinces regarding poverty and assistance programs were incorporated This data facilitates an exploration of the relationship between economic growth and poverty reduction in northern Laos over the past decade.
+ Primary data collected by interview
- In-depth interviews with international development project officials, review documents received from these organizations to determine the list of successful poverty alleviation projects.
- In-depth interviews with project staff who designed and implemented selected projects
- interview multiple stakeholders including local officials, local partners, and beneficiaries (residents).
- Interview district departments in charge of national poverty reduction projects at selected locations in the Northern Lao provinces.
- Interview the beneficiaries of these projects.
Interview structure and procedure
A recent study involving interviews with 60 home-based business owners in northern Laos reveals significant insights into the economic landscape and their role in poverty reduction The businesses represented a variety of sectors, with 30% in agriculture, 20% in handicrafts, another 20% in food processing, and the remaining 30% in retail and services These enterprises have been operating for an average of seven years, ranging from under one year to over fifteen, with 70% being family-run and relying on family labor Notably, 30% of the businesses provide jobs for one to five local workers, highlighting their potential for local job creation Financially, these businesses generate a median annual revenue of around USD 2,500, with many owners indicating that their business income constitutes at least half of their household earnings While most primarily cater to local or regional markets, 25% have successfully reached national and international markets, often leveraging online platforms.
Business owners encountered numerous challenges such as limited access to financial services, difficulties in market access, and a lack of formal business education Seasonal income fluctuations and unreliable local infrastructure further exacerbated these issues While support from NGOs and government initiatives reached nearly half of the interviewees, there remains a pressing need for more structured and effective support mechanisms The interviewees, aged between 22 and 60, displayed a diverse demographic profile with an even gender distribution and varied educational backgrounds, predominantly having completed secondary school The group also reflected the region's ethnic diversity, including several owners from minority communities Most interviewees were primary decision-makers in their operations, often supported by family members, showcasing a wide range of experience.
The motivations behind running businesses are primarily centered on supporting families, enhancing community well-being, and attaining financial independence Business owners prioritize sustainability and growth, often adopting modern technologies to drive progress Their strong community involvement is evident through active participation in local cooperatives and trade associations, where they recognize their positive impact on local services, job creation, and overall economic health The narratives collected highlight the entrepreneurial resilience faced with significant challenges, providing a valuable basis for developing targeted poverty reduction strategies that address the unique needs of home-based businesses, ultimately aiming to leverage their potential for sustainable economic development.
Developing a well-organized questionnaire is essential for effective research, particularly when studying home-based business managers in relation to poverty reduction This process involves careful design to ensure that the questions encourage informative and truthful responses while adhering to a logical and ethical framework.
The questionnaire begins with a well-crafted introduction that outlines the research's aims and emphasizes the importance of participant contributions while ensuring anonymity and confidentiality This initial communication is essential for establishing trust and rapport Following the introduction, informed consent is obtained early in the process to confirm participants' agreement and uphold ethical standards The first set of questions is designed to be simple and non-invasive, acting as an icebreaker to help respondents feel comfortable while gathering basic demographic information This smooth transition from general questions to more focused inquiries keeps participants engaged and avoids abrupt topic shifts.
The questionnaire's main body is structured to facilitate a coherent dialogue, with questions organized by theme and progressively becoming more specific This approach employs a difficulty gradient, allowing participants to engage comfortably without being overwhelmed by complex issues early on Each section logically flows into the next, reducing cognitive load and maintaining a natural conversational rhythm Additionally, each thematic section concludes with prompts for further comments, ensuring that all aspects of the topic are thoroughly explored and the respondent's insights are fully captured.
The questionnaire concludes with reflective prompts that encourage respondents to share any additional thoughts or insights they feel were overlooked, ensuring a thorough understanding of their experiences and perceptions It wraps up with a note of gratitude, recognizing the time and valuable insights provided by the participants, while also outlining the subsequent steps in the research process, including expectations for follow-up and the sharing of findings.
The questionnaire is designed to respectfully guide respondents through a natural journey while collecting valuable data for a study on poverty reduction Each structured step is intentional, aimed at maximizing the quality of information gathered and honoring the experiences of home-based business managers who are central to this research.
Pilot testing is an essential preparatory phase prior to the extensive deployment of a questionnaire, particularly when exploring complex issues like poverty reduction among managers of home-based businesses in northern Laos This process involves choosing a small, representative sample from the target demographic to complete the questionnaire under conditions similar to those expected in the main study Careful observation during this phase is crucial, as researchers monitor for any signs of confusion or discomfort that may highlight problematic questions.
Each pilot session's timing is carefully tracked to maintain a manageable length for the questionnaire, preventing respondent fatigue After completing the questionnaire, participants are debriefed to provide feedback, offering crucial insights into the clarity and relevance of the questions, which are essential for refining the questionnaire.
Analyzing pilot data is essential for determining if the questionnaire effectively captures the intended information and identifies any patterns of non-responses This analysis prompts a thorough review of the questionnaire, allowing for the rephrasing, reordering, or elimination of questions to improve clarity and relevance The iterative process of testing and refining continues until the questionnaire operates as intended.
Meticulous pilot testing offers numerous efficiency gains, enhancing questionnaire clarity and focus for precise data collection aligned with research objectives It conserves time and resources by identifying potential issues early, preventing costly fixes later The pilot phase also boosts response rates and data quality by ensuring questions are engaging and manageable for respondents Furthermore, for interview-based questionnaires, it serves as a valuable training opportunity for interviewers to familiarize themselves with the material and refine their skills prior to the actual study.
The pilot test is a crucial investment that enhances the validity and reliability of research focused on poverty reduction By establishing a solid foundation, it ensures that future data collection is both efficient and effective, leading to actionable insights that can guide strategies for supporting home-based business managers in northern Laos.
The selection of 60 interviewees for a study on poverty reduction in northern Laos provides a balanced qualitative research approach, allowing for rich narratives essential for understanding this complex issue This sample size ensures diverse perspectives from various home-based company owners, highlighting the different strategies and challenges in the region Additionally, reaching data saturation is more feasible with 60 participants, enhancing the study's comprehensiveness while keeping the analysis manageable Given the diverse ethnic groups and economic conditions in northern Laos, this sample size supports a context-rich study that explores the population's heterogeneity without logistical complications.
The decision to conduct interviews with 60 home-based company owners in remote areas is a strategic choice that balances the ambition of gathering diverse data with the practical limitations of accessing participants This sample size aligns with similar studies, ensuring comparability while allowing for an in-depth exploration of issues critical to this specific group By focusing on qualitative inquiry, the research aims to produce meaningful insights into poverty reduction that are robust and tailored to the unique context of northern Laos, ultimately providing a solid foundation for conclusions and recommendations.
Theoretical and practical contributions of the thesis
Theoretical contributions
(1) The thesis synthesized and indicated the analysis frameworks for poverty reduction Hence, the thesis drew the comments on the limitations of previous studies and proposes a solution to them.
The thesis offers a thorough evaluation of poverty reduction efforts in the Northern Lao provinces, examining the issue from multiple perspectives, including domestic, regional, and international contexts.
The thesis presents a community-focused approach to alleviating poverty in Northern Laos, emphasizing the crucial role of home-based businesses in driving local economic growth and participation.
Practical contributions
The analysis of poverty reduction in Northern Laos from 2000 to 2021 offers a detailed overview of the poverty landscape and the effectiveness of poverty alleviation efforts in the region.
The thesis offers valuable insights and recommendations that serve as essential references for Lao policymakers, aiding them in formulating effective strategies and measures aimed at enhancing poverty reduction in the Northern provinces of Laos while promoting sustainable development.
The thesis highlights the significant contributions of local communities and home-based businesses in poverty reduction through the adoption of e-commerce, which enhances economic performance The author offers recommendations for policymakers and home-based business owners to effectively leverage e-commerce as a strategy for poverty alleviation.
The structure of the thesis
Besides the Introduction, Bibliography and Appendix, the thesis is divided into
Chapter 1: Literature review on poverty redution
Chapter 2: Theoretical foundations for poverty reduction
Chapter 3: Current situation of poverty in northern lao provinces
Chapter 4: Current activities of poverty reduction in northern lao provinces Chapter 5: Recommendations and solutions to enhancing poverty reduction in northern lao provinces
LITERATURE REVIEW ON POVERTY REDUCTION
Research related to sustainable development goals and sustainable development
1.1.1 Research related to sustainable development goals
Sustainable development has gained significant attention from researchers, particularly regarding the first Sustainable Development Goal (SDG) – No Poverty, since the 1970s In 2015, 193 United Nations member states adopted the SDGs, establishing a 2030 agenda aimed at addressing the interconnected challenges of human well-being, economic prosperity, and environmental protection Unlike traditional development agendas that focus on limited aspects, the SDGs offer a comprehensive and multidimensional approach to development These interconnected, measurable goals target various societal actors, including governments, civil society, nonprofit organizations, and the private sector The 2015 publication of a detailed roadmap outlining targets and indicators for the SDGs marked a pivotal moment for both developing and developed nations in their pursuit of sustainable development, encompassing 17 goals and 169 targets to tackle the complex issues humanity faces.
Sustainable development requires the active involvement of all societal actors, including governments, organizations, and the private sector, with a focus on both macro and micro levels Key milestones, such as the Rio-92 Summit and the 2002 United Nations Summit in Johannesburg, have emphasized the need to achieve three fundamental criteria: a sustainable economy that promotes healthy growth and avoids future debt; social sustainability that ensures justice, human development, and equal opportunities measured by the Human Development Index (HDI); and environmental sustainability that advocates for the rational use of resources and the protection of living environments Addressing economic inequality is crucial, as it can lead to social unrest and hinder poverty alleviation efforts Ultimately, the fulfillment of resource and environmental needs is contingent upon achieving economic and social justice, ensuring a harmonious relationship between people, society, and nature for current and future generations.
The three sustainable development goals are interconnected and essential for societal progress, emphasizing the relationship between socio-economic growth, human development, and the responsible use of natural resources while protecting the environment The World Bank (WB) has adopted these goals as a foundation for creating a sustainable development model, which is visually represented as an equilateral triangle, with each vertex corresponding to one of the three key goals.
The evolution of sustainable development at both macro and micro levels mirrors each other, with a strong emphasis on environmental preservation to ensure future generations have access to essential resources Scholars have focused on defining specific strategies for businesses to protect natural resources while assessing the associated benefits and drawbacks Numerous case studies have explored the relationship between environmental performance and corporate economic success Additionally, various theoretical frameworks have been proposed to examine the challenges and motivators businesses face when adopting these sustainability practices.
The "Environment and Development" conference in 1992 marked a significant milestone in the evolution of sustainable development, highlighting the crucial role of social actors in achieving its core objectives To tackle institutional challenges, the business sector has adopted strategies such as "clean production" and "eco-efficiency," integrating these methods into strategic management practices.
Businesses can achieve environmental conservation while reducing costs and increasing production efficiency (Nikolaou et al., 2019) The 2002 World Summit on Sustainable Development in Johannesburg marked a pivotal moment in sustainability, emphasizing the three pillars: economy, environment, and society (Moldan et al., 2012) The triple bottom line concept advocates for businesses to enhance financial performance, protect the environment, and promote social equity simultaneously (Elkington, 1994) During this period, the "institutional" dimension was integrated into business strategy, forming the well-known pyramid of sustainability (Valentin & Spangenberg, 2000) Many scholars have focused on the triple bottom line approach, developing business models that can interchange economic, environmental, and social strategies without restrictions (Gimenez et al., 2012).
The second category focuses on a firm's triple-bottom-line strategy from a sustainability perspective, suggesting a degree of capital substitution based on capital theory, which posits that economic, environmental, and social capital can be partially exchanged to maintain critical capital The UN's 2030 Agenda for Sustainable Development introduces 17 global goals aimed at addressing critical issues such as inequality, poverty, climate change, and education, alongside 169 targets to help nations monitor their progress These Sustainable Development Goals (SDGs) have been integrated into the business sector and supply chains, linking specific goals to various stages of the supply chain, such as sustainable logistics and responsible product end-of-life management Additionally, the Global Reporting Initiative (GRI) has proposed indicators to measure corporate sustainability performance for each UN SDG.
The UN Global Compact encourages businesses to integrate the UN Sustainable Development Goals (SDGs) into their strategic management practices To support this initiative, the academic community has emphasized the importance of adopting these trends (Grainger-Brown & Malekpour, 2019) Various strategies for effective implementation have been proposed by Jones et al.
In 2016, Colombian businesses expressed a strong inclination to integrate the UN Sustainable Development Goals (UN_SDGs) into their sustainability strategies (Pineda-Escobar, 2019) Despite significant challenges, the business sector is urged to champion the UN_SDGs and adopt more sustainable practices (Scheyvens et al., 2016) The expertise of businesses in management and resource control positions them as vital contributors to the UN_SDGs, with business diplomacy playing a crucial role in facilitating their engagement (Yiu & Saner, 2017) Additionally, Brazilian forest sector companies have made notable contributions to climate change-related SDGs (Tauszig & Toppinen, 2017), while industrial ecology concepts have been associated with four specific UN_SDGs—SDGs 7, 9, 12, and 13—demonstrating varying levels of success across all 17 goals and enhancing competitive advantage (Sullivan et al., 2018).
Companies adopting the UN Sustainable Development Goals (UN SDGs) have achieved cost-effective innovations, as noted by Arnold (2018) These goals foster social involvement, benefiting small and medium-sized enterprises (SMEs) by creating conducive conditions for creativity, while multinational enterprises (MNEs) are often driven by institutional incentives to innovate Recognizing the complexity of the UN SDGs, Dressler & Bucher (2018) proposed a three-step evaluation method to assess business sustainability innovation in relation to these goals Their evaluation system, tested on a sample of African enterprises, revealed a significant link between potential innovations and the UN SDGs.
In 2018, a study examined the challenges and advantages faced by six leading advertising and marketing firms in their efforts to contribute to the UN Sustainable Development Goals (SDGs) This research has sparked significant interest among academics regarding how multinational enterprises (MNEs) can effectively integrate the UN SDGs into their strategic management practices.
In 2017, research highlighted that international sustainability standards like GRI and UN SDGs can significantly aid multinational corporations in achieving sustainable development goals A study found that 112 multinational corporations in Southeast Asia effectively shared sustainability practices across their branches Schửnherr et al (2017) explored how the UN SDGs could enhance corporate social responsibility (CSR) performance and promote sustainable development Similarly, Kolk et al (2017) provided evidence of how multinational enterprises have adopted the UN SDGs, impacting key principles of Agenda 2030, including people, planet, prosperity, and peace.
Recent research highlights the importance of investor reactions to companies' commitments to the UN Sustainable Development Goals (SDGs) Schramade (2017) emphasizes that investors need transparent evaluations of firms' compliance with the UN SDGs and suggests implementing a robust system for analyzing and reporting these efforts Key recommendations include designing performance indicators and assessing the extent of a firm's alignment with the UN SDGs Additionally, integrating the UN SDGs into university curricula and specialized educational programs is proposed to cultivate skilled managers capable of steering businesses toward sustainable development.
Educational programs play a vital role in shaping moral standards and societal values, particularly for today's business executives Annan-Diab & Molinari (2017) emphasize the significance of an interdisciplinary approach to harness diverse perspectives on sustainability and corporate social responsibility (CSR) for educational purposes They explore the potential for developing new guidelines and frameworks for responsible management education in alignment with the 2030 Agenda Additionally, Storey et al (2017) examine the contextual factors influencing this educational landscape.
2030 Agenda and the UN_SDGs could be introduced to education as well as the business world by focusing on the topic of responsible management education.
In northern Laos, the assessment of poverty reduction towards sustainable development focuses on three interconnected aspects: economic sustainability, social sustainability, and environmental sustainability These three goals are essential for achieving comprehensive social development, as their integration is crucial for effective poverty alleviation Thus, evaluating the interplay among these subsystems is vital for fostering sustainable development in the region.
Studies related to poverty reduction
Poverty is a complex and widely debated issue lacking a universally accepted definition, influenced by various perspectives It can be understood in absolute and relative monetary terms, as well as through frameworks like the capability approach, which emphasizes individual potential, and social exclusion, highlighting the marginalization of certain groups Additionally, concepts such as chronic poverty, which addresses long-term deprivation, and the impact of famines and disasters are essential to the discussion Approaches like participatory methods and multidimensional poverty further enrich our understanding of this critical social issue.
Poverty is a complex issue influenced by various non-monetary factors, including dignity and shame, as highlighted in studies by Jo (2013) Despite differing perceptions of poverty, the Sustainable Development Goals (SDGs) maintain a universal definition applicable to all developing nations Addressing poverty alleviation is not merely a coincidental aim; it must be viewed in the context of previous development initiatives undertaken from 1960 to 2000.
The first development decade aimed to assist low-income nations in achieving a 5% annual GNP growth by 1970, with subsequent decades setting increasingly ambitious growth targets, such as 6% yearly growth in the second decade and 2.8% during the third (UN, 1961; 1970; 1980) While these decades emphasized macroeconomic development as crucial for poverty reduction, the third decade marked a shift towards addressing poverty, hunger, and food security, alongside the fair distribution of benefits (Koehler, 2015) The fourth development decade (1991-2000) sought to enhance economic growth in developing nations while focusing on social needs and sustainable practices (UN, 1990) Despite some progress, significant gaps in formulating and implementing effective poverty reduction strategies remain, prompting skepticism about the feasibility of eradicating extreme poverty by 2030 (Sanderson, 2005) While the global poverty rate has reportedly halved since 1990, improvements have been uneven, with notable stagnation in Africa, raising concerns about achieving Sustainable Development Goal 1 (Greenstein et al., 2014; Fukuda-Parr & Hulme, 2011).
$1.25 per day-is met by the lowering of poverty in this study Many people have applauded the switch from the narrative of poverty "eradication" to that of poverty
Pogge and Sengupta (2015) suggest that the concept of "reduction" could encourage politicians and public figures to prioritize long-term vision over short-term political gains and narrow national interests However, achieving this shift faces considerable challenges, raising the possibility that it may ultimately become just another unfulfilled catchphrase or initiative.
Research into poverty reduction in Laos highlights the challenges faced by the government in addressing the needs of its diverse ethnic groups Manisoth Keodara (2006) identified that the country's small population and multitude of ethnicities complicate the formulation of effective poverty alleviation policies, particularly in education and health Approximately 80% of the Lao population resides in rural areas, primarily engaged in agriculture, with 87% of agricultural income used for self-consumption (UNDP, n.d.) The issue of poverty is particularly pronounced among ethnic minorities in the highlands, who often remain less integrated into the global economy (Suouphane et al., 1999) Grant (1999) noted the impact of ethnic policies on the lives of these minorities, revealing inequalities that contribute to conflict between majority and minority groups Additionally, Syviengxay (2008) emphasized the importance of rural roads in connecting villages to markets and essential services, which are vital for improving socio-economic conditions in rural areas.
Since the introduction of the New Economic Mechanism (NEM) in 1986, rural villages have increasingly integrated into the market system, significantly enhancing livelihoods and raising incomes This development underscores the vital role of rural roads in connecting villages to markets, facilitating better access to agricultural products Consequently, farmers have been able to improve their incomes, advance agricultural systems, and enhance their quality of life, ultimately contributing to poverty alleviation.
Several Lao authors have focused on poverty alleviation, highlighting its critical role in research and policy development Thongpaseuth (2012) and Khamphanh (2012) emphasize the need for effective poverty reduction strategies, while Feuangsy (2014) and others assess specific provincial poverty conditions and the effectiveness of existing measures Key strategies include enhancing the sustainability of livelihoods through livestock development and agricultural training for resettled villagers ADB reports (2005, 2006) provide insights into poverty rates across various provinces, revealing significant disparities, with Bolikhmaxay at 71.2% and Champasak at 19% Additionally, the UNDP (2013) offers quantitative data on poverty eradication efforts aimed at achieving significant improvements by 2020, particularly in rural areas The Lao government prioritizes growth through education, health, and infrastructure development, yet challenges remain due to limited and outdated data on poverty in northern provinces, necessitating further analysis and updates.
Recent studies have shed light on the issue of poverty in Laos, particularly in the northern provinces However, a comprehensive assessment of poverty in these regions remains lacking, especially when considering the unique context of each stage of the country's development.
Research related to factors affecting poverty reduction
Poverty is often measured through economic indicators such as consumption and income (World Bank, 2015), but Amartya Sen's capacity deprivation approach redefines it as the inability to achieve essential capabilities, extending beyond mere income levels (Sen, 2000) The United Nations' first sustainable development goal emphasizes the commitment to "Ending poverty in all its forms everywhere," ensuring that no one is left behind (UN).
Poverty alleviation programs globally focus on reducing poverty in disadvantaged areas through community-driven and participatory approaches Key strategies include fostering economic growth and creating employment opportunities in productive industries to lift individuals out of poverty.
Between 1970 and 2000, a significant number of impoverished individuals in countries like Africa, Brazil, China, Costa Rica, and Indonesia managed to escape financial poverty, as reported by the World Bank (2001) Bhagwati and Panagariya (2013) assert that economic growth generates the necessary resources to enhance poverty reduction programs and allows governments to invest in essential services for the disadvantaged, including housing, healthcare, and education Effective poverty alleviation strategies can be categorized into four main areas: community-based microfinance, capability and social security, market-based solutions, and good governance.
Microfinance is a widely recognized strategy for poverty alleviation, effectively supporting the poor in developing countries across Africa, Asia, and Latin America Over the past few decades, it has gained significant traction, with many scholars and policymakers emphasizing its role in empowering disadvantaged groups, especially women By facilitating access to financial resources, microfinance encourages income-generating activities, nurtures entrepreneurship, and reduces vulnerability among the impoverished population.
To enhance the effectiveness of microfinance, it is essential to incorporate services such as technical assistance, skill development training, health, education, sanitation initiatives, and measures for improving livelihoods (Kaoma Mwenda & Nkombo Muuka, 2004; Nawaz, 2010).
Microfinance and economic growth are crucial for addressing poverty, but they often overlook the psychological, social, and cultural dimensions (Banerjee & Jackson, 2017) While economic growth can enhance the lives of the poor, it frequently favors the privileged, highlighting the need for a more equitable approach Sen (2000) identifies social marginalization and lack of competence as key poverty drivers, advocating for a capability-based approach that enhances individual wellbeing and freedom of choice This framework emphasizes the importance of distinguishing between means and goals, as well as actual freedoms versus outcomes To improve living conditions for the poor, it is essential to elevate their capacities, which also facilitates resource pooling and economic participation (Sen, 2000) Furthermore, social inclusion is vital in poverty reduction, necessitating the removal of barriers faced by disadvantaged groups (Burton, 2013).
Government initiatives, collectively known as social security, aim to reduce vulnerability, danger, and poverty while promoting gender parity in economic, social, and political activities The World Development Report of 1990 emphasized a poverty reduction strategy that combines economic growth with essential social services for the poor and the establishment of financial safety nets In many developing countries, various social safety net programs, including social insurance and assistance payments, serve as effective strategies for poverty alleviation These programs significantly impact reducing poverty and its severity, vulnerability, and social inequalities However, concerns regarding the long-term sustainability of these initiatives remain a critical issue.
Recent strategies to alleviate poverty in rural areas have shifted focus from solely agriculture to include livelihood diversification, recognizing that non-farm activities can drive economic growth and reduce poverty in developing nations (World Bank, 2007; Alobo Loison, 2015) The establishment of value chains and market systems has emerged as a viable approach to poverty reduction since the early 2000s, with multi-sectoral micro-enterprises playing a critical role in enhancing productivity and income for the rural poor (Stoian et al., 2012; Janda et al., 2013) Additionally, good governance has become a priority for effective poverty alleviation, as developing countries face challenges in delivering social services and ensuring security due to political and administrative weaknesses (Grindle, 2004) Strengthening participatory and accountable governance is essential for reducing poverty and improving the lives of vulnerable populations, yet research on the link between governance and poverty reduction remains limited (Kwon & Kim, 2014) Furthermore, the role of information and communication technology (ICT) has proven beneficial in supporting poverty reduction initiatives by facilitating income generation and pro-poor market development through effective information management (Cecchini & Scott).
Since 2003, the World Bank has supported the Lao government in financing projects aimed at building essential infrastructure, such as roads, schools, health clinics, and clean water supply systems for impoverished communities, with a focus on sustainability through the Participatory Rural Finance (PRF) approach This method emphasizes village-level planning, empowering locals to choose activities that benefit their communities The Northern Region Sustainable Livelihoods Development Project, initiated by the Asian Development Bank in 2018, aims to enhance the sustainability of highland livelihoods for ethnic minorities in Northern Laos by promoting participatory livestock development from the planning phase This project addresses the lack of resources and opportunities that hinder sustainable livelihoods, utilizing a sustainable livelihood framework to evaluate access to resources, food security, and the ability to withstand shocks that can lead to poverty While these initiatives have successfully provided substantial resources and improved living conditions, they have yet to thoroughly assess the strengths and limitations of their models, nor have they analyzed the impact of community participation on poverty reduction and sustainable development.
Recent studies have painted a comprehensive picture of community participation in poverty alleviation in Laos, particularly from 2000 to the present While these works present various models for sustainable poverty reduction, they predominantly focus on individual aspects such as poverty, health, and education This approach allows for a thorough understanding of how these issues interrelate The author's research serves as a vital resource for creating an overarching view of poverty reduction efforts in the northern provinces of Laos during this period.
Research gaps
The research gap in Policy and Institutional Analysis regarding poverty reduction in the Northern Provinces of Laos is significant, given the region's unique socio-political context Existing studies often overlook the impact of local governance structures and institutional frameworks on poverty alleviation initiatives A critical examination of how specific policies influence poverty levels, including their unintended consequences, is necessary Furthermore, understanding the institutional capacity of local governments to design and implement effective poverty reduction strategies is essential, as the degree of decentralization and local autonomy can greatly affect outcomes There is a need for research to analyze the coherence between national directives and local adaptations, as well as the alignment of various policy domains—such as economic development, health, education, and infrastructure—in addressing poverty holistically The engagement of local stakeholders, including communities and NGOs, in the policymaking process is often underexplored, yet their influence is crucial for effective implementation Additionally, the integration of international aid and NGO activities into local policy frameworks and their impact on poverty reduction requires further investigation Legal frameworks, particularly concerning property rights and land tenure, significantly affect rural poverty, and research is needed to explore how these structures can be reformed to empower the poor Lastly, robust monitoring and evaluation systems are vital for assessing the effectiveness of poverty reduction policies, and understanding their transparency and feedback mechanisms will enhance policy development This research could provide valuable insights into the complex interplay between policies, institutions, and poverty reduction efforts in Laos, offering evidence-based recommendations for improving governance and program effectiveness.
Research on "Technological Innovation and Adoption" for poverty reduction in Northern Laos highlights a significant gap in understanding how local populations, particularly in rural areas, adopt and adapt technology to improve their livelihoods Key barriers to technology adoption include infrastructural limitations, educational challenges, and socio-cultural factors Investigating these barriers could provide insights into overcoming them Given the importance of agriculture in the region, exploring the impact of agricultural technologies on productivity and food security is essential Additionally, the role of technology in non-agricultural sectors, including digital tools and e-commerce, deserves attention to uncover new economic opportunities Understanding digital literacy levels and the effectiveness of educational initiatives in enhancing these skills is crucial for economic advancement Gender disparities in technology access and usage also warrant analysis to ensure equitable interventions for women and girls Furthermore, examining technologies that improve basic services like clean water and health could reveal their sustainability and impact on poverty reduction Researching local innovations and the capacity for grassroots technology development can foster community-driven solutions The potential of technology to enhance market access for agricultural and artisanal products, as well as its effects on social structures and networks, presents additional avenues for study Lastly, understanding the policy frameworks that influence technology diffusion in impoverished areas is vital for creating conducive environments for innovation This research could provide valuable insights into leveraging technology for socio-economic development and inform policies that effectively address the technology gap for the rural poor.
THEORETICAL BACKGROUND OF POVERTY REDUCTION
Concepts related to poverty, poverty reduction and SDGs
Poverty, a critical socio-economic issue, manifests as a gap between the rich and poor, characterized by stratification and social polarization It encompasses both absolute and relative poverty, with a close relationship to hunger, where hunger serves as an evident state of poverty The persistence of poverty is often linked to a cycle of stagnation, exacerbated by unforeseen events such as natural disasters and illness Analyzing poverty from an economic perspective highlights its material implications, affecting individuals and communities differently based on their socio-economic context The interplay of political, cultural, and economic factors further influences poverty dynamics, particularly during transitional phases in economies like that of Lao PDR Understanding poverty as a dynamic and evolving concept is essential for developing effective solutions to eradicate hunger and reduce poverty, emphasizing the need for a modern development framework that addresses wealth disparity and fosters sustainable growth.
Poverty is a complex concept often defined by financial constraints or the inability to meet basic needs, typically represented by the threshold of one dollar a day per person It encompasses various factors such as recurring illness, malnutrition, inadequate education, social exclusion, and discrimination based on age or gender While the criteria for assessing poverty may vary across countries and regions, the core elements remain consistent, focusing on income or expenditure necessary to fulfill essential human requirements like food, shelter, health, and education The distinction lies in the degree of satisfaction of these needs, influenced by socio-economic development and local customs At a 1993 conference in Bangkok, ESCAP emphasized that poverty arises when segments of the population cannot meet their basic human needs, reflecting the socio-economic context and societal recognition of these customs.
Poverty is a multifaceted condition defined by the World Bank as encompassing hunger, lack of shelter, illness without medical care, and limited access to education It reflects a severe deprivation of basic human needs, including food, safe drinking water, sanitation, health, and education, as noted by the UN Baratz and Grigsby further describe poverty as a significant loss of physical and mental well-being tied to inadequate economic resources While definitions of poverty vary, they often highlight critical needs such as food and housing, emphasizing that the severity of hardships can differ greatly among individuals The duration of these conditions also plays a role, as temporary homelessness due to a disaster may not always equate to a lack of resources for basic necessities.
Poverty is often understood as a prolonged state of deprivation that affects various aspects of life, including income, housing, education, and health (Deleeck et al., 1992) While basic needs are crucial indicators of poverty, specific challenges like homelessness or extreme cold may not alone define it (Whelan, 1995) Instead, poverty is shaped by an individual's overall experiences The "web" of deprivation, highlighted in the World Bank's Voices of the Poor studies, illustrates how people encounter a shifting array of challenges over time (Narayan et al., 2000; Raban, 1982).
Poverty is broadly defined by the lack of fulfillment of basic human needs, such as food, clothing, and shelter, which are essential for maintaining human existence Absolute poverty is characterized by hunger, where individuals do not receive sufficient nutrients or energy to sustain daily life, leading to severe consequences, especially among vulnerable populations like children and women To assess poverty, it is crucial to focus on economic factors, particularly the basic material needs of individuals, and to establish poverty criteria based on monthly or annual per capita income in both rural and urban areas This assessment should consider nutritional intake and the proportion of income spent on food, revealing regional disparities in poverty levels However, national income per capita, while a common measure of a country's development, has limitations and does not necessarily correlate with the actual well-being of the population or the level of social justice achieved.
The concept of "multidimensional poverty"
The Global Multidimensional Poverty Index (MPI), developed by Alkire et al in 2011, measures acute multidimensional poverty across more than 100 countries It utilizes data from recent Demographic and Health Surveys (DHS), Multiple Indicator Cluster Surveys (MICS), the Pan Arab Project for Family Health (PAPFAM), and various national surveys The MPI encompasses three dimensions and ten indicators, providing a comprehensive assessment of poverty.
1 Each dimension is equally weighted, and each indicator within a dimension is also equally weighted Any person who fails to meet the deprivation cutoff is identified as deprived in that indicator.
Figure 2.1: Structure of the Global MPI
In the global Multidimensional Poverty Index (MPI), an individual is considered multidimensionally poor if they experience deprivation in at least one-third of the weighted MPI indicators, resulting in a weighted deprivation score of 33.33% or higher The MPI is calculated using the Alkire-Foster (AF) methodology, which combines the incidence of poverty (H) and the average intensity of poverty (A) Here, H represents the percentage of the population that is multidimensionally poor, while A indicates the average level of deprivation across various dimensions for those in poverty Thus, the formula MP I = H × A effectively captures both the proportion of people living in poverty and the extent of their deprivation.
Determination of poverty assessment criteria
As countries strive for economic development and aim to create fair, democratic, and civilized societies, many have implemented policies to support low-income individuals To effectively identify poor households, over 70 nations have established specific criteria known as the poverty line There are two primary methods for determining this line: one based on the minimum spending required for a basic standard of living, and the other based on income levels necessary to maintain that standard It's important to note that the poverty line is not static; it fluctuates over time and varies by location, influenced by each country's socio-economic development and cultural practices.
The UNDP's 2013 Poverty Assessment Criteria highlight the complexity of poverty, particularly within the multi-ethnic context of Laos, where it signifies the most disadvantaged families in a community Prior to creating a village development plan, it is essential for villages to gather data and evaluate the living conditions of families, categorizing them as rich, self-sufficient, or poor This classification underscores the significance of household poverty as a key metric for district-level poverty assessment Moreover, villages serve as a vital measure of welfare, acting as a natural safety net to address deficiencies in local livelihoods.
When designing programs to eradicate basic poverty, it is essential to consider the cultural understanding of poverty within a country Effective poverty reduction strategies must focus on improving livelihoods, which can take various forms The Government aims to prioritize people-centered and participatory development, promoting positive social advocacy that encompasses all sectors of society, not just those who are identified as poor.
Various methods exist to measure and analyze poverty, including the poverty line, participatory poverty assessments, vulnerability indicators, and the Human Poverty Index, which the United Nations employs in its Human Development Index This index considers factors such as illiteracy, malnutrition, life expectancy, and access to healthcare, while direct measurements focus on the lack of essential goods and services like fuel, sanitation, education, and clean water In Laos, poverty measurement is still developing, primarily relying on the Lao Expenditure and Consumption Survey (LECS), conducted every five years since 1992/93 Notably, poverty levels have significantly decreased since 1992/93, as outlined in the Prime Minister's Directive No 10, which defines poverty as the inability to meet basic human needs, including insufficient food, clothing, housing, healthcare, and education The directive emphasizes the need for a systematic approach to calculate poverty levels at village and district levels, integrating these findings into poverty eradication plans.
To effectively assess poverty, both quantitative and qualitative measures are employed The quantitative approach utilizes the poverty line methodology developed collaboratively by the National Center for Statistics, SIDA, ADB, and the World Bank, which includes two distinct lines: the food poverty line and the overall poverty line The food poverty line, set at a threshold of 2,100 calories per day per person, indicates food insecurity, while the overall poverty line accounts for essential food and non-food needs, calculated by adding 20% for non-food expenses In contrast, qualitative assessments in Lao PDR, initiated in 1997 through the "Rapid Poverty Assessment (RPA)" technique, focus on understanding the perceptions, nature, and causes of poverty at the community and household levels This method has been implemented in three provinces—Luang Namtha, Bolikhamxay, and Attapeu—and has significantly contributed to the formulation of the National Poverty Reduction Action Plan, as documented in government reports.
In 2000, the Participatory Poverty Assessment (PPA), supported by the ADB, initiated a nationwide qualitative analysis that explored the causes and perceptions of poverty within multiethnic communities By documenting the experiences and concerns of individuals, the PPA aimed to identify effective strategies for poverty reduction, integrating diverse information sources such as statistical, cultural, and economic data with insights from the impoverished population To enhance local government capabilities in monitoring poverty trends, particularly in disadvantaged households and districts, specific criteria were established, enabling district and provincial authorities to gain a deeper understanding of grassroots poverty These criteria are organized into three distinct levels for effective implementation.
A household is classified as poor if its income falls below 85,000 kip per person per month, with thresholds of 100,000 kip in urban areas and 82,000 kip in rural regions, based on 2001 prices This income level permits the purchase of approximately 16 kg of ground rice monthly, leaving insufficient funds to meet essential needs such as clothing, shelter, education, and medical care.
Village level: Villages considered poor villages are: 3/4 villages have at least
Related theories on poverty reduction towards SDG 1
2.2.1 The Welfare, the Basic Needs, and the Ability needs
The welfare need posits that a society becomes impoverished when individuals lack the economic well-being necessary for a reasonable minimum standard of living This concept links personal utility, which is difficult to quantify, to the more measurable standard of living Historically, raising income has been viewed as the primary means to enhance living standards and personal utilities.
To effectively reduce poverty, policies must prioritize boosting productivity and generating employment opportunities, ultimately increasing individuals' incomes and enhancing their economic well-being within society.
The Basic Needs approach identifies essential goods and services, such as food, water, sanitation, housing, clothing, basic education, health care, and public transportation, as crucial for ensuring a quality life Among these, nutrition is prioritized Unlike the welfare school, which focuses on standards of living and personal enjoyment, this approach emphasizes the necessity of providing every individual with access to basic goods Originating from the early 20th-century research of British economist Seebohm Rowntree and gaining traction in the 1970s, it advocates for targeted policies addressing each basic need to effectively eradicate poverty, rather than merely increasing personal income.
The Ability need, also known as the need for competence, emphasizes human abilities and capacities rather than merely fulfilling basic human needs Introduced by economist Amartya Sen in the 1980s, this concept asserts that the value of human life is determined by an individual's capabilities and the freedom to pursue their desired life Effective poverty reduction policies should focus on empowering the poor by providing the necessary conditions for them to develop essential functions, ranging from basic needs like nutrition and health to higher aspirations such as respect, social participation, and having a voice in society This approach fundamentally differs from traditional needs by prioritizing the creation of opportunities for individuals to enhance their abilities according to their own choices.
Today, major international organizations like the World Bank and UNDP have broadened the definition of poverty to encompass various dimensions, as suggested by Sen This expanded understanding includes essential aspects of poverty that go beyond mere financial deprivation.
Material misery, primarily assessed through income or consumption levels, represents the first aspect of poverty This financial hardship is often coupled with significant deprivation in education and health services Additionally, the poor frequently experience a lack of voice and power, further exacerbating their situation.
Poverty is a multidimensional issue that encompasses various interconnected factors such as health, education, environment, livelihoods, and social challenges By analyzing these related aspects, we can gain a deeper understanding of the nature of poverty This comprehensive perspective enables us to provide objective assessments and valuable policy recommendations for the Lao government aimed at eradicating poverty and enhancing the quality of life for its citizens.
The theory of modernization emerged in the 1950s, gaining traction globally in the wake of World War II, as perspectives on "development" became more defined This theory posits that underdevelopment stems from traditional societal structures, dismissing imperialism as a primary cause It advocates for a developmental approach that focuses on expanding resources rather than merely redistributing them, suggesting that decentralized market economies are more effective in achieving development goals compared to central planning (Peemans, 2007).
In the 1970s, a new modernization approach emerged, driven by international trade and investment, which the World Bank supported as a catalyst for economic growth By the mid-1970s, growth theory began to emphasize the essential need to combat poverty (Chenery et al., 1974) The 1980s saw this doctrine evolve in response to shifting international dynamics, incorporating the "human" factor into development considerations by the late 1980s (Peemans, 2007), and later recognizing the significance of state involvement and democracy in the 1990s.
In 2000, the Millennium Development Goals (MDGs) were formulated, with an additional focus on the "global war on terror" introduced in 2001 The prevailing development theory underpinning the MDGs is rooted in modernization, adapting to the specific contexts and times (Lapeyre, 2006).
The application of modernization theory in poverty alleviation research in northern Laos highlights the complex social transformation influenced by the interplay of growth and anti-poverty policies since the implementation of the "Innovation" policy in 1986 Laos has achieved notable successes in poverty reduction, with a comprehensive program supported by party committees and authorities at all levels This initiative focuses on agricultural development, irrigation infrastructure, and economic restructuring to ensure food security By understanding the root causes of poverty, the program aims to empower individuals to leverage opportunities for escaping poverty while effectively utilizing government and social resources for support.
Over the past 20 years, rural living conditions have improved, particularly in food security and per capita income, driven by economic growth and increased employment opportunities However, these advancements have also introduced significant challenges, including the potential destruction of village communities and environmental degradation, threatening sustainable agriculture Additionally, while poverty alleviation strategies have been deemed successful, they have inadvertently given rise to new forms of poverty and inequality, particularly between rural and urban areas This raises concerns about land use instability and the depletion of nonrenewable resources, which are often overlooked compared to traditional rural poverty in northern Laos The pressing research question is whether the current socio-economic inequalities and instabilities in northern Lao provinces indicate the unsustainability of the existing poverty reduction and economic growth strategies.
Modernization theory has significant drawbacks, particularly its failure to consider project sustainability and the environmental practices of traditional and indigenous cultures, which often demonstrate a more symbiotic relationship with the planet Additionally, the modernization process can exploit workers, exacerbating social inequalities and widening the gap between the rich and poor Consequently, this theory does not adequately address the connection between economic development and sustainable poverty reduction, as the equitable distribution of land and resources is essential for fostering wealth and enabling community participation in poverty alleviation initiatives.
Dimensions to measure poverty reduction towards SDG 1
The article discusses the need for a theoretical and methodological framework for comparable poverty metrics applicable to both high-income and low-income countries, emphasizing the importance of including access to essential health and education services in the definition of resources (Pomati & Nandy, 2020) Despite these advancements, many poverty assessments in low-income nations still rely on outdated absolute measures, primarily based on calorie intake from the 19th century, which overlook critical non-financial and social dimensions of poverty (Hall & Midgley, 2004) This results in a significant gap in understanding poverty, as these measures fail to address the necessity for a nutritionally balanced diet and often depend on unreliable economic activity data (Jerven, 2013) Consequently, while wealthier nations adopt a relativist approach with broader poverty definitions, research in Africa and Asia continues to utilize outdated absolutist measures, leading to inadequate assessments of the poverty landscape.
Since 2000, there have been significant efforts to expand poverty measurement in low-income countries, highlighted by the World Bank's Voices of the Poor report (Narayan et al., 2000) This report, along with other studies utilizing non-monetary and relative measures (Alkire et al., 2011), underscores the complexity of poverty Increasingly, welfare outcome indicators are being employed to depict the living conditions of individuals in poverty-related scenarios (Alkire & Santos).
Recent poverty studies, such as UNICEF's Global Study of Child Poverty and Disparities, emphasize the importance of housing quality, overcrowding, and access to essential services like water, sanitation, healthcare, and education, aligning with global poverty definitions Similarly, the Multidimensional Poverty Index (MPI) by the Oxford Poverty and Human Development Initiative assesses nations using individual and household data, focusing on health, education, and asset ownership OPHI is expanding its measures to include access to banking, the internet, stable employment, and personal security, allowing for a more comprehensive understanding of poverty This evolution in definitions and methodologies enables researchers to capture the multifaceted nature of poverty through diverse techniques, including micro-level qualitative methods like focus groups and community surveys, which enrich broader survey analyses.
Researchers and policymakers emphasize the importance of moving beyond solely monetary measurements for assessing poverty (World Bank, 2016) While the "Dollar a day" indicator was used for the Millennium Development Goals (MDGs), the Sustainable Development Goal (SDG) 1.2 aims to halve the proportion of individuals experiencing poverty in all its forms, as defined by national standards This goal represents a significant shift in understanding and measuring global poverty, recognizing its multifaceted nature and the necessity for separate assessments for children and adults However, measuring multidimensional poverty presents challenges, including identifying all potential aspects of poverty and analyzing it as a singular construct despite its multiple dimensions Current academic discourse, influenced by Sen's Capabilities Approach and Townsend's relative deprivation concept, explores these complexities Recent studies have further developed these methodologies, offering diverse insights into how various indicators can be empirically selected and combined into a comprehensive measure of poverty.
The challenge of compiling a comprehensive list of poverty aspects has been largely overlooked, particularly in middle- and low-income countries (Grusky et al., 2006) To foster a meaningful discussion on the diverse definitions of poverty, it is essential to address this issue separately from aggregation concerns Achieving consensus on what constitutes poverty is vital for accurate poverty reduction estimates A well-structured research plan is necessary to systematically collect data reflecting public perceptions and establish a national definition of poverty, especially as scholars advocate for broader interpretations While some methods, like the Multidimensional Poverty Index (MPI), rely on local expert advice and available indicators from nationally representative surveys such as DHS and MICS, other researchers utilize focus groups to explore poverty dimensions However, these studies often fail to validate their findings with nationally representative data or tend to focus more broadly on living standards rather than specifically defining poverty.
In Laos, significant advancements in health and education are guided by government policies aimed at improving these sectors, as noted by UNDP (2003) However, the data presented in that report has since become outdated The Laos Ministry of Health (2011) highlighted critical health challenges faced by communities in project areas, emphasizing the need for enhanced access to health services for ethnic minorities and effective conflict resolution strategies Furthermore, the Japan International Cooperation Agency (2010) addressed the growing disparities between rural and urban development, revealing alarming poverty trends and a concerning lack of health insurance for the impoverished population, which underscores the need for better implementation of support measures.
Research by Warr et al (2015) highlights the rising levels of poverty and inequality in both urban and rural households in Laos Grant (2012) contrasts the national policies of the Lao PDR Government with those of the Royal Lao Government, noting that the latter focused primarily on ethnic differences and social hierarchy, while the modern state aims for a more equitable national policy Despite these intentions, the Lao PDR government struggles to enforce equal rights, particularly for ethnic minorities This inequality is evident across various socio-economic sectors, including education, and is exacerbated by disparities between urban and rural areas, as well as between genders and ethnic groups The findings are derived from qualitative research and an analysis of secondary data sources.
Laos' human resource development has garnered attention from scholars, notably Nordin & ệberg (2012), who highlight the connection between human capital and poverty, emphasizing that poverty negatively impacts human development, which is crucial for poverty alleviation Razah (2003) addressed social issues in Laos, although not in great detail, noting that the prevalence of social problems is difficult to assess due to remote communities and limited government capacity for data collection and analysis The unclear spread of HIV/AIDS further complicates the situation Additionally, the UNDCP (2001) identified Laos as a leading country in opium production, with a national survey in 2000 revealing 19,000 hectares of opium poppies yielding 167 tons of opium, particularly concentrated in the northern mountainous regions Laos continues to be a significant drug trafficking hub for both regional and global markets, and controlling this activity remains a challenge.
The Country Analysis Report: Lao PDR (UNDP, 2015) highlights the challenges of illegal migration and cross-border crime, which are transnational issues requiring regional cooperation Many Lao women migrate to Thailand, particularly in the Isan region, due to shared linguistic and cultural ties, seeking employment in factories or as domestic workers However, these free migrants often face precarious legal situations and unstable jobs, increasing their vulnerability to human trafficking and exploitation, including prostitution Additionally, they risk arrest for illegal immigration, leading to deportation without support or compensation, which severely impacts their self-esteem The report emphasizes that the lack of a strong social network further exacerbates their risk of falling into human trafficking.
Numerous assessment reports, including the "Poverty Alleviation Strategy Report," the IMF's Annual Progress Report (2006), and various publications from the Lao Government and NGOs, provide valuable insights into the poverty situation in Laos These resources offer critical data on socio-economic factors such as education, health, and social issues, helping to illustrate the trends in poverty reduction across different sectors However, there remains a significant gap in research focusing on the socio-economic conditions in northern Lao provinces and their correlation with poverty levels.
Since 2003, the Lao government, with support from the World Bank, has initiated numerous projects aimed at building essential infrastructure, such as roads, schools, health clinics, and clean water supply systems for impoverished communities across Laos The Poverty Reduction Fund (PRF) emphasizes sustainability and employs a bottom-up approach, allowing villagers to participate in planning and selecting activities that address their specific needs.
Northern Region Sustainable Livelihoods Development Project of (ADB,
The 2006 project aims to enhance the sustainability of highland livelihoods in Northern Laos by implementing participatory livestock development from the planning stage Targeting ethnic minorities who lack adequate resources and production opportunities, the initiative seeks to create sustainable livelihoods Utilizing the sustainable livelihood framework theory, the project assesses access to resources, food security, and the ability of individuals and households to meet their current and future needs, ultimately aiming to improve well-being and reduce vulnerability to unforeseen shocks that can lead to poverty and deprivation.
These projects offer valuable resources regarding their scale, implementation methods, and participant contributions, which are essential for my dissertation research However, they lack an evaluation of the strengths and limitations of their models Additionally, there has been insufficient analysis of how these models relate to local community participation and their impact on poverty reduction in the context of sustainable development.
Recent studies have provided a comprehensive overview of community participation in poverty alleviation efforts in Laos, particularly from 2000 to the present These works highlight various sustainable poverty reduction models involving local communities, while primarily focusing on specific issues such as poverty, health, and education By assessing these interconnected problems, the research offers valuable insights into the overall landscape of poverty reduction in northern Lao provinces, making it a significant resource for further exploration of this topic.
2.4 Good practices from foreign countries in poverty reduction towards SDG 1
2.4.1 Poverty reduction practices in Cambodia
Cambodia is grappling with the lasting effects of its turbulent history, which has weakened governmental institutions and fueled widespread poverty The country faces a critical shortage of educated workers due to past conflicts and emigration, hindering economic revival efforts With a population growth rate of 2.4% and 13 million youth under 16, Cambodia's limited social services are under immense pressure As one of Asia's poorest nations, a significant portion of its citizens live on less than $1 a day, and the country struggles with low life expectancy, high infant mortality rates, and a mere 14% secondary education enrollment Rural areas experience poverty rates nearly double those of urban regions Despite an average GDP growth of 6% since 1994, the economy remains fragile, with over 70% of jobs in agriculture, which constitutes 39% of GDP Post-conflict growth has been driven by agricultural expansion, tourism, and the garment industry, aided by preferential access to US markets through the Multi-Fibre Agreement, which expired in 2004, potentially jeopardizing future exports and employment opportunities.
CURRENT SITUATION OF POVERTY IN NORTHERN LAO PROVINCES
Overview of Laos
The Lao People's Democratic Republic (Lao PDR), established on December 2, 1975, is located in Southeast Asia at the heart of the Indochinese peninsula, sharing borders with China, Cambodia, Vietnam, Thailand, and Myanmar Spanning 1,799 km from north to south and covering an area of 236,800 km², Laos is divided into three regions: North, Central, and South The northern region features a hilly, rugged landscape with numerous valleys, making transportation challenging In contrast, the central and southern areas are characterized by lower elevations, larger plains, and valleys, facilitating trade and commerce.
Laos, located in the Northern Hemisphere's tropical climatic zone, predominantly experiences a tropical monsoon climate, characterized by significant variations from north to south and across its diverse topography The country has two distinct seasons: the rainy season, from May to October, driven by the hot and humid southwest monsoon from the Indian Ocean, and the dry season, from November to April, brought by the cold and dry northeast monsoon Average annual rainfall in Laos ranges from 1600 to 1800 mm, with temperatures typically between 22°C and 42°C.
Laos, a landlocked nation, boasts a diverse landscape characterized by high mountains in the north and east, lower mountains in the south, and lowlands along the Mekong River This unique geography, coupled with an extensive network of rivers and streams featuring numerous waterfalls and rapids, creates an ideal environment for irrigation and hydroelectric projects The country has significant potential for industrial tree planting and afforestation, particularly for producing paper and wood products Additionally, Laos is rich in mineral resources, including iron, coal, bauxite, copper, gold, and limestone, with some mines operating on an industrial scale This abundance of natural resources, alongside extensive hydroelectric capabilities, positions Laos for growth in fundamental industries such as steel, copper, alumina, and cement, while its vast natural forests remain largely intact.
Laos, with its north-south mountain ranges and plains, boasts significant hydropower and irrigation potential, estimated at around 23,000 MW The Lao PDR aims to position itself as a key energy supplier for ASEAN nations by developing its hydroelectricity sector Significant investments have been made in major projects, including the Hong Kong thermal power plant and the Nam Theun II hydropower project, which collectively offer a capacity of 1,080 MW in the central region Currently, over 15 hydroelectric projects are in various stages of development, further enhancing Laos's energy infrastructure.
Sa (Northern) boasts over 1000 MW of installed capacity, supported by a 500 KV transmission line system connecting the North, Central, and South regions This infrastructure ensures sufficient electrical energy for both water production and consumption, while also facilitating electricity exports.
Situation of poverty in Laos and northern Lao provinces
Poverty among peasant households is a significant characteristic of economic development in the Lao People's Democratic Republic (PDR) The country's commodity economy remains underdeveloped, with the market economy still in its infancy Many impoverished regions rely on a natural economy, emphasizing self-sufficiency The lack of a unified and developed market structure contributes to the persistence of poverty in Laos, which reflects the challenges faced by a slowly transforming agricultural society aiming to evolve into an industrialized nation.
The new poverty line established by LECS 6 (2018/2019) utilizes a basic needs-based cost approach, setting the national poverty line at 280,910 kip per month per person at 2019 prices, reflecting a 16% increase from 241,699 kip per person per month in 2012/13 In 2018/19, the average per capita consumption reached 463,067 kip per month, which is 67% above the poverty line (WB, Poverty Profile in Lao PDR, 2020).
Laos, despite experiencing impressive economic growth rates averaging 6.9% annually from 1993 to 2011, remains classified as one of the world's least developed countries In 1997, a staggering 38.6% of the population lived in poverty, with a survey in early 2000 revealing that 253,000 households, or 39% of the total, were impoverished Notably, rural areas faced even greater challenges, with 43.8% of poverty-stricken households located there, and many regions, including 10 out of 17 provinces and 69 out of 140 districts, frequently encountering food shortages Consequently, addressing poverty is a primary focus of Laos's socio-economic development strategy.
In 5 years (2001-2005), poverty reduction has made great progress, reducing 135,000 poor households; In the period 2006-2010, there were 72 poor districts nationwide, of which 47 were particularly poor Although the rate dropped to 27.6% in
2008, the figure shows that poverty is still very high.
In 5 years (2006-2010), Laos has achieved many achievements in economic development, average economic growth reached 7.9%, per capita income reached 1,069 USD/person/year (exceeding the set target), the number of poor households decreased from 27.7% in 2003 to 20.4% in 2010 (Văn phòng chính phủ Lào, 2011).
As a multi-ethnic country, the standard of living is significantly low both materially and culturally In 2006, over 80% of the population resided in rural areas, with many living in remote, mountainous regions vulnerable to natural disasters and lacking sustainable development conditions Agricultural production relies heavily on natural methods, with hilly areas facing issues like indiscriminate burning, while scientific and technological advancements in cultivation and livestock breeding are not yet implemented in the plains and highlands.
In general, the productive business of rural people remains individualistic, largely dependent on nature, and access to infrastructure and social services is limited.
By 2010, 28.7% of households were still classified as poor, with unplanned rice cultivation covering 120,000 hectares The average income was only $650 per person per year, significantly lower in mountainous rural areas.
In certain rural areas, individuals face significant challenges, with an average income of just $200 per person per year Food shortages persist for 4 to 6 months, while the literacy rate for those aged 15 and older stands at only 73% Access to clean water is available to 71% of the population, and only 47.3% have access to hygienic toilets Life expectancy is alarmingly low at 61 years Additionally, socio-economic infrastructure remains underdeveloped, with only 125 districts having year-round accessible roads Notably, 6% of districts lack electricity, affecting 51% of villages and 42% of households.
The World Bank-funded poverty eradication initiative has successfully implemented 1,912 copies across 20 districts in five provinces of Laos, including 239 typical clusters in Houphan, Xiangkhouang, Savannakhet, Salavan, and Champak By 2006-2007, the Lao government completed a comprehensive plan targeting impoverished households in 23 residential clusters across the 47 poorest districts nationwide.
Laos has made notable strides in poverty reduction, with the percentage of the population living on $1 a day decreasing from 90% in 1990 to 29% in 2017 As of 2018/2019, the national poverty rate was estimated at 13.8%, indicating that nearly one-fifth of the population survives on less than 9,364 kip daily ($1.10) (World Bank, 2020) Despite these improvements, Laos still faces significant challenges, ranking second highest in poverty rates among regional countries Therefore, poverty alleviation continues to be a key focus in Laos' socio-economic development strategy moving forward.
Table 3.1: Poverty rate in ASEAN countries (2015)
Despite certain successes in poverty reduction, poverty reduction is still a key task in the socio-economic development orientation of Laos, especially in the northern provinces in the coming time.
In 1990, a staggering 90% of Laos' population survived on just $1 a day By 2017, this figure improved slightly, with 29% of the population living on $1.25 daily However, the national poverty rate in 2018/2019, based on a revised methodology, indicated that 18.3% of the population still struggled to make ends meet, living on less than 9,364 kip a day (approximately $1.10).
Poverty in Lao PDR is on the decline, with recent estimates indicating a 6.3% reduction in the poverty rate, from 24.6% in 2012/13 to 18.3% in 2018/19 This decrease is notable when comparing the new calculation methodology to previous assessments, reinforcing that Lao PDR is making significant strides in poverty alleviation.
Rural areas have experienced a more rapid decline in poverty compared to urban regions, yet a significant disparity remains Between the LECS 5 and LECS 6 surveys, urban poverty reduction was slow, achieving only a 7% decrease In contrast, rural poverty decreased by 7.65% over the same six-year period, resulting in a current rate of 23.8%.
Area Poverty Headcount rate Poverty Gap Squared Poverty Gap
Source: collecting from LECS 5 and LECS 6 (Poverty Profile in Lao PDR, p.17).
Poverty has significantly decreased in rural areas, with the poverty gap dropping from 7.7% in 2012/13 to 5.18% in 2018/19, and the squared poverty gap reducing from 2.7% to 1.7% In contrast, urban areas have experienced no major changes in these indicators Despite the notable reduction in rural poverty, the overall poverty rate remains higher in rural regions compared to urban ones, with a disparity of 5.1% in rural areas versus 1.3% in urban areas as of 2018/19.
Urban areas continue to experience significantly higher consumption levels compared to rural regions Between 2012/13 and 2018/19, rural households saw a real per capita consumption increase of 3.1% annually, while urban households had a lower growth rate of 2.6%.
Table 3.3: Per capita Consumption by rural- Urban, 2018/19
Annualized growth in real per capita consumption: 2012/13-
LaoPDR Urban Rural Lao PDR Urban Rural
Source: Collecting from LECS 5 and LECS 6 (Poverty Profile in Lao PDR, p.17)
The average consumption in urban areas stands at 900,772 Kip per person per month, almost double that of rural areas.
Some aspects of poverty in Laos
The Fourth Lao People's Congress in 1986 initiated a comprehensive renovation of the country, leading to significant changes in Laos During the third five-year plan (1986-1990), Laos experienced notable economic growth, with the gross domestic product increasing by 7% in 1986 and reaching 6.6% in 1990 Additionally, inflation was dramatically reduced from 115% in 1985 to just 19.1% by 1990 (Tran, 1996).
1991 - 1995, Laos achieved an average GDP growth of 6.4% per year, national income reached 344 USD / person in 1995; import and export reached $274.3 million and
$485.5 million, respectively, in 1995 (Laos Ministry of Planning and Investment,
From 1996 to 2000, despite the challenges posed by the Asian financial crisis, Laos experienced an average GDP growth of 5.8% annually, with exports reaching 324 million USD and imports totaling 540 million USD by 2000 In the subsequent five-year plan from 2001 to 2005, Laos continued to demonstrate robust economic performance, achieving an average growth rate of 6.2% per year, outpacing many other Southeast Asian economies.
2017) In the period 2006-2010, per capita income was estimated at 841 USD, the inflation rate from the end of 2001 to 2010 was below 10% per year (except for 2002-
2003 inflation of 15.2%) (Laos Ministry of Planning and Investment, 2005).
Agriculture has been a vital economic sector, contributing approximately 50% of the total GDP and employing 85% of the population The cottage industry represents around 92.98% of national investment, with key exports including wood, electricity, and forest products, while imports primarily consist of consumer goods and machinery.
Laos has experienced significant advancements, particularly in food production, which surged from 1.6 million tons in 1986 to 2.6 million tons in 2005, establishing the country as self-sufficient in food with substantial national reserves and export capabilities The economic growth rate also accelerated, rising from approximately 6% in 2000 to 7.2% in 2005 By 2005, Laos had established trade relations with 50 countries and territories, signed trade agreements with 19 nations, and benefited from the General Preferential Program (GSP) status from 35 countries This period of renovation has led to gradual improvements in the material and spiritual well-being of the Lao people.
Since 2000, Laos' economy has heavily relied on resource extraction, with the government viewing this sector as a crucial driver for growth and revenue generation This approach aligns with the country's poverty alleviation strategy established in 2004 and has been consistently reinforced in the subsequent 6th and 7th five-year plans.
2010, 2011-2015), with the goal of structuring the national economy around the exploitation of resources.
Laos has experienced significant economic growth, driven by its strategic alignment with China's regional dynamics The country's abundant hydropower, mining, and agricultural resources serve as the backbone of this development According to the Central Bank of Laos, exports surged sixfold from $320 million in 2001 to $1.85 billion in 2011, with resource exploitation making up 58% of total exports Notably, mining exports skyrocketed from zero in 2001 to $812 million in 2011, while the agricultural sector saw a remarkable increase in exports from $9 million in 2001 to nearly $172 million in 2011.
At the same time, in the period 2010-2011, Laos' resource tax revenue increased
From 2001-2002 to the present, there has been an eightfold increase in revenue, reaching nearly 100 million USD This significant growth is attributed to the doubling of hydropower and mining production, along with rising mineral prices, particularly for gold.
Between 2000 and 2011, Vietnam, China, and Thailand were the top investors in Laos, contributing $4.77 billion, $3.43 billion, and $2.85 billion, respectively, which accounted for 79.2% of the total foreign direct investment (FDI) in the country This capital supported 2,690 projects, with the hydropower and mining sectors experiencing the most significant growth, representing 51.2% of the investment capital However, official statistics may not fully capture the economic activities of small traders, exporters, and smugglers, particularly in border areas of Laos.
Laos has experienced significant economic growth across various sectors, with rapid advancements in production and business models nationwide Both domestic and foreign investments have surged, leading to improved living standards for the population For instance, GDP per capita rose from just $118 in 1980 to over $1,800 in 2015, contributing to a notable decline in the national poverty rate The poverty rate dropped from 24.6% in 2013/2014 to 13.8% in 2018/2019, with substantial progress in rural areas, although urban poverty reduction has slowed Overall, Lao PDR has made remarkable strides in eradicating hunger and reducing poverty.
The COVID-19 pandemic has significantly impacted the global economy, with the International Monetary Fund (IMF) projecting a worldwide economic contraction of -4.9% in 2020 Thailand is expected to experience a decline of -7.7%, while China is anticipated to grow by 1.0% In April 2020, the IMF estimated Laos' economic growth at 0.7% Additionally, the total value of business investment licenses issued in the first half of the year reflects these challenging economic conditions.
In 2020, electricity production saw a 7.1% increase compared to the previous year, while overall electricity output in the first five months grew by 5.2% over the same period in 2019 Key sectors such as internet services, finance, banking, health, and clean water are gradually recovering, contributing to economic growth and budget revenues amid the Covid-19 pandemic Commercial banks reported a 7.5% increase in credit disbursement to the economic sector in the first five months of 2020 Although the agricultural sector continues to grow, it is lagging behind targets, with an estimated growth of only 0.9-1.7% in 2020, below the normal range of 2.8-3% This slow growth poses a significant risk to past poverty reduction efforts, particularly affecting the northern provinces of Laos, which are home to a large concentration of ethnic minorities.
3.3.2 Development of rural and urban disparities
The poverty rate in rural areas is three times higher than in urban regions, with rural areas housing nearly 90% of the poor population despite comprising 67% of the total population However, the urban poor population has been on the rise in recent years From 2012/13 to 2018/19, poverty declined more rapidly in rural areas, coinciding with an increase in urban migration During this period, the percentage of the urban poor rose from 9.2% to 12.4%, while the overall urban population grew from 28.8% to 32.5% (World Bank, 2020).
Vientiane capital has experienced significant socio-economic development, with a positive shift in its economic structure and an impressive annual growth rate of 12.1% The capital's gross product reached 12,083.78 billion kip, resulting in a per capita income of 1,755 USD, surpassing the target of 455 USD This progress has led to notable achievements in poverty alleviation, with only 10% of households classified as poor as of August 2018 Compared to the national average, Vientiane's poverty reduction efforts have proven more effective, particularly when contrasted with the seven northern provinces, which include Oudomxay, Xayabury, Xiengkhuang, Huaphanh, Bokeo, Phongsaly, and Luangnamtha, where many households remain in rural and mountainous areas.
Rural areas experience lower health quality, literacy rates, and nutrition levels compared to urban regions, despite overall improvements in these metrics There are notable disparities in education and health services, including nutrition, between rural and urban populations Additionally, farmers have not received sufficient social services to support their well-being.
Table 3.7: Rural and urban education in Lao PDR (2015)
Male Female Total Male Female Total
Source: Food and Agriculture Organization of the United Nations
The enrollment rates for both male and female students in urban areas are significantly higher than those in rural regions At the secondary school level, rural male students are enrolled at a rate approximately 9% lower than their urban counterparts, while rural female students lag behind by about 30% Specifically, the rural enrollment rate for level 2 is 59.9%, which is 15% lower than that of urban areas Additionally, the enrollment rate for rural 3rd graders is notably lower, at around 17% Overall, the percentage of male students in rural areas is approximately 14% less than in urban areas, with rural female students showing an 18% deficit compared to their urban peers.
CURRENT ACTIVITIES OF POVERTY REDUCTION IN
Factors impacting poverty reduction
Poverty is a complex socio-economic issue that affects individuals, families, and communities, emerging as a significant challenge in the development process of every nation Addressing poverty is crucial for overcoming barriers to economic prosperity and achieving social justice While the focus and methods of tackling poverty vary across different social regimes, it remains a global concern that requires coordinated efforts from the international community.
To effectively combat and reduce poverty, it is essential to accurately identify the multifaceted factors contributing to it Poverty is influenced by a complex interplay of various elements, including socio-economic conditions, natural externalities, and the internal circumstances of impoverished households These factors are interconnected, highlighting that there is no singular cause of widespread poverty.
4.1.1.1 Factors in the intrinsic conditions of poverty-stricken households
People living in poverty often struggle with food insecurity, leading to a lack of marketable products and limited economic activity Their economic mindset remains underdeveloped, rooted in a self-sufficient, agricultural lifestyle As a result, their perspectives and mentalities differ significantly from those of the wealthy Many lack the entrepreneurial spirit, confidence, and knowledge necessary to engage in business ventures or manage farms effectively.
Lao PDR is one of the poorest countries globally, characterized by a diverse array of ethnic groups and a low standard of living Over 80% of its population resides in rural areas, many in remote, mountainous regions vulnerable to natural disasters and lacking sustainable development The economy remains heavily reliant on nature, with agriculture and animal husbandry practices lagging behind modern standards In hilly regions, rice cultivation is often unplanned, while scientific and technological advancements in farming and livestock management are not widely implemented in the plains and highlands.
In the last four decades, the integration of advanced scientific and technological methods in agriculture, alongside significant investments in irrigation infrastructure, has led to substantial growth in Lao agriculture Previously reliant on rice imports, Laos has achieved self-sufficiency in rice production since 2000 and now boasts a surplus for export.
Lao PDR is one of the most ethnically diverse countries in Southeast Asia, comprising four main ethnic groups: Lao-Tai (62.4%), Mon-Khmer (23.7%), Hmong-
Iu Mien (9.7%) and Sino-Tibetan (2.9%) (Lao Statistics Bureau, 2016), officially divided into 50 ethnic groups (Douangtavanh, 2018), can be subdivided into more than
Lao ethnic groups comprise 53% of the population, with Khamu at 11%, Hmong at 9%, and other ethnicities at 27% (Bureau, 2015) There are 200 ethnic subgroups, historically categorized into three geographical regions: Lao Loum (lowlands), Lao Theung (midlands), and Lao Soung (uplands) This classification reflects traditional agricultural practices, where lowland groups primarily cultivate rice, while midland and upland communities engage in diverse farming methods (Ministry of Health, 2015).
Since the 1981 Conference of Ethnic Minorities, the Lao government has officially abolished the three geographical classifications of its people, adopting a system that categorizes them into four ethnic language groups: Lao-Tai, Mon-Khmer, Hmong-lu Mien, and Sino-Tibetan Despite this change, the traditional classifications of Lao Loum, Lao Theung, and Lao Soung continue to be widely used in daily conversations, reflecting the evolving agricultural and geographical practices among these ethnic groups.
The Lao-Tai language family includes eight ethnic groups primarily residing in lowland areas, while the Mon-Khmer language family encompasses 33 distinct ethnic groups Additionally, the Hmong-Lu Mien language family comprises two ethnic groups, and the Sino-Tibetan language family consists of seven ethnic groups.
The highlands of Laos are traditionally home to the Hmong-lu Mien and Sino-Tibetan peoples Among the Lao-Tai groups, Buddhism stands out as the predominant religion, whereas other communities practice animistic beliefs.
Table 4.1: Language groups in Lao PDR
Tibet- Burma Akha, Phounoy, Lahou, Syla, Hayi, Lolo, Hor
Mon-Khmer Khmou, Prai, Xingmoun, Phong, Thaen, Erdou, Bid, Lamed,
Samtao, Katang, Makong, Tri, Yrou, Trieng, Taoy, Yae, Brao, Katu, Harak, Oy, Kriang, Cheng, Xuay, Nhaheun, Lavy, Pacoh, Khmer, Toum, Ngouan, Moy, Kree, Brou.
Lao, Tai, Phouthay, Lue, Nhoaun, Yang, Xaek, Thaineua
Source: Douangtavanh Kongphaly 2018 “List of all ethnicity in Laos.”
The Thai-Kadai or Lao-Tai ethnic minority is the largest ethnic group in Laos, residing in 8 of the country's 18 provinces, including Attapeu, Champasack, Saravan, Savannakhet, Khammuane, Vientiane, and Xiengkhouang A significant concentration of this population is found near the capital, Vientiane, while 65% live in rural and mountainous areas, often in hard-to-reach communities due to challenging terrain and inadequate road infrastructure Laos is governed at four administrative levels: central, provincial, district, and village.
In 1992, the Lao Institute of Ethnology identified 49 distinct ethnic groups within Laos The Lao ethnic group represents the majority, comprising 54.6% of the total population, while the other groups are classified as ethnic minorities.
Laos is characterized by its ethnic diversity, lacking a single majority group in terms of population, residence, and culture The recent Attendance Poverty Assessment (PPA) by the Center for National Statistics, supported by the ADB, revealed that the politically dominant Laotians represent less than 25% of the total population in Lao PDR.
The Lao PDR study on the National Strategy for Growth and Poverty Alleviation (NGPES) reveals that among the country's 142 districts, 37 are classified as very poor and an additional 48 as poor, highlighting a significant prevalence of poverty Notably, these impoverished districts have a higher concentration of minority populations (Lao, 2004).
Figure 4.1: Geographical based poverty rate
Map 1 shows poverty rates by province in Laos It can be seen that the highest poverty rate corresponds to the provinces with the highest concentration of ethnic minority groups, as shown in Map 2 below.
Figure 4.2: Ethnic groups in Laos
Northern Lao provinces are home to a large concentration of ethnic minorities. Especially in Luang Prabang, the province has all ethnic groups living in Laos.
Poverty among rural and mountainous farmers is a significant issue in Lao PDR, highlighting the challenges of economic development in the region The country's commodity economy remains underdeveloped, with many areas still relying on subsistence farming and lacking a unified market structure As Laos transitions from a predominantly agricultural society to an industrialized one, the pervasive nature of poverty reflects the difficulties faced in this long-term transformation.
Local government’s policies for poverty reduction
4.2.1 The situation of implementing policies for poverty reduction
From 2016 to 2020, rural development, poverty alleviation, and cooperative initiatives in northern provinces were systematically organized, guided by legal frameworks established by the Party and Government This framework set the direction for achieving goals outlined in the Party's X Congress Resolution, the Eighth 5-Year National Socio-Economic Development Plan, and National Assembly resolutions As a result, significant progress was made in implementing these initiatives, focusing on key tasks aligned with the established objectives for each period.
(1) Developed a 5-year rural development and poverty reduction plan (2016 - 2020); At the same time, update the 5-year agro-forestry development plan (2016 -
2020) in the direction of 3 pillars, such as: Agriculture, forestry and rural development;
This article outlines four essential work plans aimed at enhancing sustainable development: (1) a comprehensive strategy to ensure food security; (2) initiatives to transform agricultural and forestry production into viable commodities; (3) a management plan focused on forests and forest resources; and (4) a rural development plan dedicated to poverty alleviation, complemented by ten additional work plans.
The Government and National Assembly have been urged to adopt the Law on Population and Occupational Planning No 45/QH, enacted on June 15, 2012, and implemented through Decree 204 by the President on August 1, 2012 This legislation serves as a foundational legal framework for integrating residential and occupational planning across the nation, progressively aligning it with the overall legal system.
(3) Organized the implementation of Directive No 097, dated 18.01.20 of the Politburo on strengthening leadership, directing rural development and poverty alleviation of people nationwide.
The completion of the study and adjustment of Prime Minister's Decree No 309, dated November 14, 2013, concerning difficult standards and development criteria, has been integrated into Decree No 348, issued on November 16, 2017 Additionally, the Government's Guidance No 0830, dated April 6, 2018, was released to facilitate the implementation of Decree No 348 This guidance aims to disseminate information to ministries, ministerial-level agencies, mass organizations, social organizations, and local authorities while collecting data on both achievements and challenges related to these difficult standards and criteria, contributing to the comprehensive information required for the nationwide three-level congress.
The consolidation of assessment results for the training stages, as mandated by Government Decree No 348, has been nearly completed to support the implementation of the Congress Resolution and the 5-year national socio-economic development plan Notably, a pilot program has been successfully executed in Tam commune, Pac-tuna district, Vientiane city, and four northern provinces of Laos: Pu-xa-lu, U-dom-xay, Xiêng-ca, and Huo-phăn, as part of efforts to reduce poverty and malnutrition in rural areas All necessary evaluation tools and measures at the family and district levels have been meticulously prepared and coordinated with relevant departments for effective implementation However, after assessing the challenges and development, it was revealed that the number of families, development villages, and difficult districts fell short of the enhanced criteria, compounded by the adverse effects of natural disasters over the past five years, which have escalated the costs of these difficulties.
Between 2016 and 2020, there was active coordination with local authorities across provinces and cities to study regulations regarding priority development centers This effort led to a request for government approval, resulting in the Prime Minister's issuance of Decision No 65 on August 19, 2016, which established 449 priority development centers nationwide Among these, 91 centers focus on rural development and poverty reduction, comprising 20 centers from the Central Government and 71 from localities.
The country has established 145 stable residential and occupational planning centers, including 4 central and 141 local centers Additionally, there are 213 urban village construction centers Guidance No 1018/CP, issued on October 12, 2016, outlines the implementation of the Prime Minister's Decision No 65, which prioritizes the development of these centers for the period 2016-2020 Furthermore, the Government has reviewed regulations for priority development centers for 2019-2020, providing a framework for central and local departments, agencies, and economic sectors to effectively implement these centers Overall, there are 997 centers across the nation.
The study focuses on the coordination mechanisms for rural development and poverty alleviation between the Ministry of Agriculture and Forestry and various central and local government agencies in northern provinces It highlights the role of ministerial offices and provincial committee offices, with Vientiane serving as the coordination hub The Ministry has designated the Department of Rural Development and Cooperatives as the primary entity responsible for coordinating efforts and providing guidance to the ministry.
The relevant departments have collaborated to inspect and revise legal documents concerning cooperative work proposed by the Government, ensuring their suitability for both short-term and long-term use A Research Committee has been formed to amend the Law on Organization of Agricultural Production, focusing on completing Decree 136 from the Prime Minister and Decisions 2983 and 2984 from the Government regarding agricultural groups and cooperatives This effort aims to upgrade these regulations, culminating in the issuance of Decree No 606 on November 26, 2020, concerning groups and cooperatives.
Between 2017 and 2019, significant non-refundable and borrowed capital support was received through bilateral and multilateral cooperation, including aid from China This assistance was directed towards pilot projects in three villages: Xo in Sangthoong district, Xienglom village in Luang Pha Bang Province, and Thadockham in Xaythani district, Vientiane City A total of 41 billion kip was allocated for approximately 20 projects in these areas.
The World Bank has provided a loan of 27 million USD to support poverty and malnutrition reduction projects across 881 villages in 12 districts within four northern provinces: Phongxaly, Udomxay, Huaphan, and Xiengkhoang This initiative is set to be implemented over a five-year period from 2019 to 2024.
Laos has received $383,000 in aid from China through the Mekong-Lancang cooperation framework, aimed at enhancing cooperative research and development This initiative supports the poverty reduction capital fund, which operates across 10 provinces and 43 districts, focusing particularly on four key poverty-stricken provinces in northern Laos: Phongxaly, Udomxay, Huaphan, and Xiengkhoang.
4.2.2 The results of implementing policies for poverty reduction
The organizational structure of the rural development sector and cooperatives in Laos has been integrated into the Ministry of Agriculture and Forestry, following Decision No 21 dated April 11, 2016 This integration aims to enhance rural development and poverty alleviation efforts across the country, from central to local levels The central framework includes the Department of Rural Development and Cooperatives, which comprises six divisions: Administration and Organization, Planning and Cooperation, Results Assessment, Rural Development, Residential and Occupational Planning, and Cooperative Promotion The department employs 68 staff members, including 22 in management positions, with a leadership team consisting of one director, three deputy directors, and six department heads.
12 deputy heads of departments. b Local level:
The provincial level features rural development sectors and cooperatives managed by the Department of Agriculture and Forestry, comprising four key working groups: Administrative-Organization, Results Planning and Evaluation, Rural Development, and Population-Occupational Planning, along with the Cooperative Incentive Group and Fund This structure includes a workforce of 275 employees, which consists of 18 sector heads, 43 deputy heads, and 211 staff members.
At the district level, the Department of Agriculture and Forestry oversees rural development units and cooperatives, supported by three key working groups: the administrative team, the planning and evaluation group, and the rural development and population planning team Additionally, there is a cooperative incentive group focused on funding initiatives, with a total of 556 personnel dedicated to these efforts.
Poverty reduction activities from business stakeholders and others
In June 2018, the Regular Government Conference resolved that the Department of Rural Development and Cooperatives, alongside the Ministry of Agriculture and Forestry and the National Institute of Economic Research, would revise legal documents related to cooperatives for immediate and long-term applicability The Ministry tasked the Department with urgently researching and updating these documents to form a Decree on groups and cooperatives, as well as Decree No 606/CP, to be implemented nationwide Over the past five years, assessments revealed 4,784 agricultural production groups and 57 cooperatives, including 33 agricultural and 24 credit cooperatives Notable cooperatives, such as the Phieng Mountain Coffee Production Cooperative and the Coffee Cooperative of Champasac province, have been proactive in training and promoting the establishment of cooperatives across various provinces and cities in the country.
The Department of Rural Development and cooperatives has collaborated with international organizations and development partners to secure non-refundable aid and loans aimed at rural development and poverty alleviation Key funding sources include the Laos-Vietnam border development cooperation capital, Laos-China poverty alleviation pilot capital, the Hardship Mitigation Fund, World Bank loans, the Mekong-Lancang Special Fund, the Luxembourg Development Foundation Aid Fund, and various NGO contributions These funds primarily focus on enhancing infrastructure, improving living standards, and fostering the formation of groups and cooperatives.
Over the past five years, Laos has invested 4,390.69 billion kip in rural development, poverty alleviation, and cooperative projects, which accounts for 69.61% of the identified capital needs of 6,307.12 billion kip The government allocated 733.12 billion kip to support 1,183 projects, with many completed and operational Key initiatives include 899 infrastructure projects, such as 42 irrigation systems, 37 Phai-nặm-lôn constructions, 3 Agri-forestry technical service centers, 37 leveling projects, and 40 initiatives for cultivation and breeding Additional efforts encompass 11 people's markets, 183 road constructions, 19 bridge projects, 47 village planning initiatives, 15 community clean water projects, 49 power and transformer developments, and 113 school and dormitory constructions.
5 projects providing teaching and learning equipment; 12 projects to build medical facilities; 51 village hall projects; 51 residential planning relocation projects; 154 projects encourage expertise.
The Government has allocated additional budgets to address public debt for fully completed rural development and poverty reduction projects For instance, in 2016, a capital plan was established to resolve public debt amounting to 400 billion kip specifically for rural development initiatives.
In 2018, a special capital plan was initiated for the debt payment project utilizing a 3-corner debt reversal strategy By 2017, there were four capital sources with a total value of 307.06 billion kip allocated to 76 projects In 2020, central management continued this approach, paying debts through 3-corner debt reversal and additional bonds, amounting to 123.27 billion kip for 18 projects.
* For the structure of each specific capital package as follows:
(1) Capital for rural development and poverty alleviation at central and local levels:
- Rural development capital at 20 key points of central management:
The Government has prioritized 11 out of 20 key points for rural development and poverty reduction at the central management level, targeting 11 districts across 7 key provinces This initiative encompasses a total of 146 projects with an investment of approximately 991.46 billion kip, including 56.81 billion kip from the Government of Vietnam So far, 124 of these projects have been completed, focusing on various sectors: 8 in agriculture, 2 in industry and trade, 53 in transport, 4 in energy and mining, 27 in education and sports, 3 in health, and 27 in other fields.
- Rural development capital at 71 key points at the local level managed:
The rural development and poverty alleviation initiative encompasses 71 key points across 11 village clusters in 61 districts and 17 provinces, with 53 points included in the management list under Directive No 65/CT-Ttg This initiative focuses on socio-economic infrastructure development, linking it to poverty reduction through 486 projects, with a total investment of approximately 3,130.55 billion kip Of this, 336.62 billion kip comes from government funding, while private sector contributions amount to 832 million kip So far, 410 projects have been completed, representing an investment of 1,796.68 billion kip, with the government disbursing 768.94 billion kip, or 42.85% of the investment debt projects Key sectors targeted include agriculture (62 projects), industry and trade (5 projects), transport (135 projects), energy and mining (24 projects), education and sports (51 projects), health (40 projects), and other sectors (90 projects).
(2) Central and local employment and resettlement planning capital
- Capital planning for resettlement and employment state-level management:
The state-level relocation planning capital package has approved 78 projects, totaling an investment of 296.31 billion kip Out of these, 74 projects, with a combined capital of 226.04 billion kip, have been completed, resulting in a disbursement of 79.94 billion kip, which represents 26.97% of the total investment debt projects The primary investment sectors include 22 projects in agriculture, 2 in industry and trade, 19 in transport, 2 in energy and mining, 11 in education and sports, 12 in health, and 11 in various other fields.
- Resettlement planning capital and employment management at the local level
Over the past five years, localities have implemented 324 resettlement and employment planning projects across 70 of 141 key points, with a total investment of 1,490.49 billion kip These initiatives primarily target areas with high foot traffic or those considered sensitive for security reasons To date, 291 of these projects have been completed, with an investment of 906.88 billion kip and 433.15 billion kip disbursed, representing 52.08% of the total investment debt Key investment sectors include agriculture (36 projects), industry and trade (2 projects), transport (95 projects), energy and mining (19 projects), education and sports (29 projects), health (22 projects), and other fields (88 projects).
Over the past five years, a total of 453.54 billion kip has been allocated to 1,667 projects aimed at poverty reduction across 43 districts in 10 key provinces This funding includes 62 billion kip from the government through 132 projects and 391.54 billion kip in foreign aid across 1,535 projects Of these, 1,405 projects have been completed with a total investment of 308.5 billion kip, focusing on critical sectors such as education and sports (490 projects), transportation (363 projects), health and hygiene (413 projects), agriculture (123 projects), and energy (16 projects), significantly enhancing the quality of life for the people.
Laos is prioritizing infrastructure development and enhancing the quality of life for its citizens by attracting aid from international agencies, NGOs, and preferential loans, particularly from strategic partners like China and Vietnam Notably, Heavy Touch has invested EUR 3,083,178 in three projects across three provinces, focusing on 67 villages from 2016 to 2020 These initiatives aim to improve nutrition for mothers and children under five and foster inter-ministerial cooperation to address nutrient deficiencies in key provinces Additionally, Child Fund has implemented programs in 33 villages across two districts, further contributing to the country's development efforts.
Between 2016 and 2020, a total aid capital of $4,444,169 (41.77 billion kip) was allocated to enhance children's development and improve access to quality education This initiative aimed to strengthen village-level coordination in district planning, ultimately creating better opportunities for children and communities through effective management and service delivery The Luxembourg Development Agency contributed €118,178 (1.35 billion kip) from 2019 to 2020, focusing on organizing experience exchange conferences on rural development and cooperative topics, as well as providing sustainable training for officials Additionally, the German Co-operative Association implemented a project worth $700,000 (7 billion kip) during the same period, which involved adjusting legal documents and developing tools for production groups and cooperatives, alongside professional training Furthermore, the Gle Agency's project, funded at $350,000 (3.15 billion kip) from 2016 to 2019, emphasized training and management development through field trips and knowledge exchanges with counterparts in Korea and Thailand.
In addition, it also received preferential loans from the World Bank (WB) to implement poverty reduction and malnutrition reduction projects with a total value of
27 million USD, implemented in 881 villages of 12 districts, in 04 northern Lao provinces, including: Phongxaly, Udomxay, Huaphan and Xiengkhoang with a term of
From 2019 to 2024, the Chinese Government has contributed $383,000 in aid under the Mekong-Lancang cooperation framework to enhance sustainable cooperative efforts in Laos This initiative successfully culminated in a conference held in Pakxe City, Champasak Province, where representatives from eight member countries shared valuable experiences on cooperative work within the ASEAN region.
(5) Credit loans of the Policy Bank and the village development capital fund
For the past five years, the Department of Rural Development and Cooperatives has effectively supervised, promoted, and coordinated credit loans from the Policy Bank and the Village Development Capital Fund.
From 2016 to 2020, total credit loans amounted to 2,832.09 billion kip, with short-term loans accounting for 254.63 billion kip (8.99%), long-term loans at 695.95 billion kip (24.57%), and the majority, 1,881.50 billion kip (66.44%), categorized as long-term loans Key districts received a total of 1,814.05 billion kip in credit loans, while the government and localities allocated 312.7 billion kip for essential development projects, including credit loans for two construction villages.
Interview results
About 30% of businesses engage in agricultural production, encompassing traditional crop farming and livestock rearing Approximately 20% focus on handicraft production, leveraging local materials and generational skills Additionally, 22% operate food processing units that convert local produce into marketable products The remaining 28% consists of small-scale retail shops offering essential goods and service-based businesses, including tailoring, repair services, and local tourism initiatives.
Figure 4.3: Business types and operations
The average operation length of the surveyed businesses was 7 years, varying from less than a year for newly established entities to over 15 years for well-established ones Approximately 72% of these businesses were family-run, emphasizing the critical role of family labor in home-based enterprises In contrast, the remaining 28% employed between 6 to over 10 local workers, showcasing the potential for community employment generation.
According to the author's survey in 2 northern Lao provinces, Xiong Cau andLuang Prabang, the results are as follows:
Evaluation indicators Progress No progress Inferior than before
Go to work far away, export labor
In two surveys conducted in the provinces of Xiong Cau and Luang Prabang with 60 interviewers, findings revealed that households have made progress over the past five years in income, basic assets, and food security However, areas showing no improvement include housing, education, nutritional health, animal husbandry, and access to information, while travel and long-distance commuting have declined These changes are largely attributed to the prolonged impact of the Covid-19 pandemic on the lives of residents in the surveyed regions.
The home-based business owners interviewed exhibited a balanced gender distribution, with a slight male majority Their ages ranged from 22 to 60, averaging 35 years Educational backgrounds varied widely, from primary education to university degrees, with most having completed secondary education This group reflected the region's ethnic diversity, including several minority group members, highlighting the rich cultural landscape of northern Laos.
This article analyzes interviews with home-based business owners in northern Laos to explore the complex relationship between entrepreneurship and poverty reduction Key insights from these interviews reveal how local entrepreneurs navigate challenges and leverage opportunities to improve their economic circumstances, highlighting the vital role of small businesses in fostering community resilience and enhancing livelihoods.
Many business owners started their ventures in response to limited job opportunities, utilizing their skills and local resources, which reflects an entrepreneurial spirit driven by necessity and a quest for financial independence Daily operations often blend traditional practices with modern business activities, showcasing a strong connection between cultural heritage and entrepreneurship For most participants, their businesses serve as essential lifelines for their families, as revealed by financial data on initial investments and revenue While some entrepreneurs accessed loans or savings for startup capital, others relied on informal funding, highlighting the need for accessible microfinance options Although customer bases were primarily local, some businesses successfully reached broader markets, employing diverse marketing strategies ranging from social media to word-of-mouth The evident digital divide indicates that improved access to digital marketing training could significantly enhance market expansion opportunities for these entrepreneurs.
Business owners face challenges such as infrastructural inadequacies and bureaucratic hurdles, often expressing a need for enhanced government support and streamlined processes While support from NGOs and government programs can be crucial in overcoming initial barriers, many remain unaware of these resources or find them inaccessible By sourcing materials and labor locally, businesses contribute to the local economy and foster community resilience, with employment generation playing a key role in poverty reduction Personal success stories illustrate how business achievements have improved living standards for families Aspirations for the future include scaling operations and enhancing product quality, with a shared focus on sustainable growth that aligns with community development Business owners advise prospective entrepreneurs to prioritize resilience, community engagement, and education in business management, while also advocating for broader societal changes, such as improved education, infrastructure, and market access, to further facilitate poverty reduction.
The analysis of interviews reveals a complex relationship between individual agency and structural factors in poverty reduction efforts in northern Laos Home-based businesses play a crucial role in the region's economy; however, their growth is hindered by several challenges Implementing targeted interventions could enhance the development of these enterprises, significantly aiding in the upliftment of communities from poverty.
Achievements and limitations in poverty reduction in Northern Lao provinces
4.5.1 Achievements in poverty reduction in Northern Lao provinces
The northern provinces and the entire country are experiencing a stable and progressive political, social, and security environment The administrative system is becoming more robust, contributing to a society that is increasingly equitable and just.
We have successfully established legislation to support rural development and cooperatives, including the Law on Land Allotment and Land Requisition, as well as directives from the Central Committee aimed at enhancing leadership in rural development and poverty alleviation This framework encompasses decrees related to poverty escape standards, development standards, and guidelines for assessing compliance with these standards, all of which are essential for fostering cooperative clusters and improving the livelihoods of rural communities.
We have successfully gathered information on Poverty Escape and Development in relation to the preparation and execution of the Congress at three levels, effectively meeting the objectives set for the 2016-2020 period.
The active development of essential infrastructure is underway, including the construction of profitable facilities, bridges, and roads Efforts are being made to clear land for production, upgrade existing roads, and build primary and secondary schools, along with dormitories for teachers and students Additionally, health centers and power grid infrastructure are being established to support community needs.
The annual budget allocation is systematically divided between central and local management levels, facilitating effective monitoring, promotion, and regular reporting to superiors.
4.5.2 Limitations in poverty reduction in Northern Lao provinces
The slow development of laws and regulations hampers effective law enforcement and the establishment of cohesive systems for guidelines, policies, resolutions, and legal regulations at the local level Additionally, there is a significant gap between theoretical frameworks and their practical application.
(2) The coordination between central and local sectors to collect data and organize the implementation of rural development and cooperatives is still difficult and delayed.
(3) The regime, working method plan and leadership method of the organization are not serious and strict, and local reports to the Central Government are not regular.
The coordination and fundraising efforts for rural development and poverty alleviation are misaligned, leading to delays in project implementation and a failure to meet established goals.
(5) Each locality is clearly defined as a development focus, and no focus has been established as a model for development or construction in the District.
The annual organization of State investment project implementation faces challenges, particularly with new proposals that are delayed and not aligned with the planned schedule Additionally, the process of preparing documentation for capital withdrawal does not meet the timelines set by the Ministry of Finance.
Insufficient budgeting for inspections and assessments based on poverty escape and development standards in each province hampers effective data collection, resulting in unclear information that does not meet the desired clarity.
The Provincial Council has yet to approve the allocation of funds for rural development and poverty alleviation in certain provinces Consequently, the Local Management Board lacks confirmed information regarding budget availability and the number of projects.
Rural development primarily emphasizes infrastructure development as a strategy for poverty alleviation However, the overall quality of life for individuals remains low, and there is a notable lack of community engagement and ownership in agricultural development and poverty reduction efforts.
4.5.3 Some lessons and implications for poverty reduction in Northern Lao provinces
In the northern provinces of Laos, establishing a political foundation for rural development and poverty alleviation is a strategic priority This initiative encompasses four key areas and goals, ensuring a comprehensive and focused approach that is interconnected across various fields It emphasizes the collective awareness and action of all branches and authorities at every level of society, both domestically and internationally.
The management of infrastructure development capital has been assigned between central and local governments, as outlined in Directive No 65/TTg However, some localities are attempting to redirect these funds in violation of established regulations, highlighting the need for adherence to proper management practices.
According to No 65/TTg, the current capital concentration remains dispersed and unfocused, leading to a management shortage To address this, enhanced coordination between central and local governments is essential, with localities taking on the role of implementation organizers and direct monitors Meanwhile, the central government should focus on coordination, supervision, and inspection to effectively promote agricultural development and poverty alleviation in line with the Party and Government's guidelines and policies.
Effective rural development and poverty alleviation hinge on well-prepared work, people, and financial plans A significant challenge is the shortage of organized leadership and skilled personnel Successful initiatives require a strong connection between establishing a local political base and cultivating capable leaders who possess solid political qualities These leaders must effectively guide community efforts, serving both as protectors and dedicated servants to their villages.
RECOMMENDATIONS AND SOLUTIONS TO ENHANCING
Objectives and strategic development of Lao for property reduction
5.1.1 Objectives for property reduction at Northern provinces of Lao
The northern provinces of Lao PDR have historically relied on smallholder agriculture and livestock farming, but significant economic and social changes have emerged since market reforms began in the late 1980s In response, the Lao government has implemented policies focused on reducing inequality and poverty, with property redistribution being a central objective of its development strategy in these regions This paper will explore the rationale and goals of these property reduction policies in northern Lao while also examining the challenges and opportunities they create.
Before the late 1980s economic reforms, agriculture in Laos was collectivized, focusing on subsistence rather than trade, with communal land ownership intended for equal distribution However, disparities arose as some households gained more land and resources due to their roles in cooperatives The transition to a market economy introduced private land titling, boosting the rural economy's monetization and fostering commercial agriculture This shift, while beneficial, also resulted in land concentration and increased inequality, as wealthier individuals could acquire more land and invest in higher-value crops.
Research indicates that northern provinces, characterized by superior soils and irrigation, experienced pronounced agricultural disparities Wealthier households amassed substantial land holdings and engaged in commercial agriculture, while poorer families often relied solely on wage labor for survival The advent of contract farming for export crops, such as coffee, vegetables, and fruits, further benefited larger landowners capable of meeting production quotas Consequently, this situation intensified rural inequality, with government statistics revealing persistently high poverty levels in the northern regions.
The overarching goal of recent property reduction policies introduced by the government is to redistribute land and other productive assets more equitably More specifically, the key objectives are:
Poverty alleviation efforts focus on redistributing property, particularly land, to support vulnerable families who have become landless or possess minimal land due to economic reforms By providing these families with productive assets, their capacity to participate in agriculture and enhance their income is anticipated to improve significantly.
Highly concentrated land ownership can lead to social tensions when a significant portion of the population is landless or lacks sufficient land To mitigate this issue, property redistribution initiatives aim to provide households with the means for subsistence and reduce inequality By promoting more equitable land ownership, the potential for conflict over land and resources may also be diminished.
Consolidating small land holdings into larger, uniform plots enhances agricultural productivity by enabling mechanization and the use of external inputs, which are essential for achieving economies of scale This approach also supports contract farming arrangements, ultimately improving market access for farmers and making their operations more economically viable.
Rural development initiatives aim to empower local communities both economically and socially through property ownership By providing land titles and access to credit, households can enhance their investments in agriculture and village infrastructure This empowerment fosters a greater community interest in development projects, ultimately leading to improved overall rural welfare.
The property reduction strategy in northern provinces emphasizes accurate land surveys as a foundational element for identifying land available for redistribution Provincial and district-level land survey teams, comprising local authorities, land offices, and community representatives, compile existing land ownership records, acknowledging potential documentation gaps Extensive field verification is conducted to meticulously map land parcels, detailing ownership, boundaries, usage, and soil quality, with survey teams often spending weeks in remote areas to consult locals and resolve disputes Unused or contested lands are temporarily marked, and claim forms are issued for occupant feedback After surveying, data is compiled into digital databases and paper maps, followed by quality checks to identify inconsistencies before official ratification However, not all identified unused lands qualify for redistribution, as some may be leased, in conservation zones, or designated for commercial use; only verified unutilized public lands can be considered for the "land bank."
Establishing a land bank involves compiling an inventory of redistributable land, primarily sourced from unused public lands identified in surveys, such as fallow areas and degraded forests Additionally, voluntarily donated land from affluent landowners, who benefit from tax incentives, plays a crucial role Abandoned small plots may also be included after verifying the absence of claimants Some provinces may selectively acquire unused private lands at market rates The consolidated land is then subdivided based on parameters like villages, districts, and topography, allowing for effective provincial management and allocation of the final land bank inventory.
Setting a maximum land holding threshold of 10-15 hectares is essential for determining properties eligible for redistribution, ensuring that only large holdings exceeding basic family needs are targeted while preserving small family farms Establishing land allocation committees at provincial and district levels, comprising local authorities and community representatives, promotes local participation and transparency in decision-making The selection process prioritizes landless families and those with minimal land holdings at risk of poverty, with vulnerable groups such as female-headed households, the elderly, and disabled individuals receiving additional consideration Evaluations use official poverty criteria alongside family size and care responsibilities to identify those most in need, ultimately granting land titles for residential use, home gardening, and agriculture based on individual family circumstances.
To maximize early outcomes of land allocation, it is crucial to provide start-up assistance packages that include quality seeds, seedlings, essential farm tools, and training in advanced agricultural techniques This support aims to ensure that new land holdings are utilized productively and efficiently Additionally, establishing ongoing monitoring systems is vital, involving regular visits from provincial and district extension agents to enhance productivity, address any conflicts, and ensure the sustainability of livelihood benefits over the long term.
Enhancing productivity is essential for the long-term success of property reduction programs, as sustainable outcomes rely on maintaining reasonable productivity levels Key infrastructure development, such as targeted rural road upgrades, connects villages and farms to markets, while irrigation projects facilitate agricultural intensification Investments in local crop processing facilities enable farmers to add value to their products, and skills training centers bolster human capital with region-specific programs By improving connectivity, remote communities can better engage in the cash economy, ensuring that complementary rural initiatives effectively support redistribution efforts.
Close monitoring and ongoing support are essential for distinguishing impact-driven initiatives from superficial interventions Provincial and district land departments appoint dedicated staff to engage regularly with beneficiary communities, ensuring that field agents visit landholdings to address issues, facilitate service access, and verify compliance with land use regulations Gathering feedback enhances program responsiveness, while participatory evaluations ensure relevance and local ownership Recognizing and replicating commendable efforts is vital, as is prioritizing conflict resolution due to potential resource sensitivities Implementing clear grievance redress and reconciliation protocols fosters harmony, which is crucial for long-term livelihood improvements and sustained welfare through equitable access to productive assets Support from local allies helps ease transitions, while independent oversight ensures accountability.
Implementing redistribution programs in large rural populations, despite their well-intentioned goals, faces significant administrative challenges Effective inter-agency collaboration among stakeholders such as land, agriculture, and local planning departments is crucial, yet differing priorities and limited capacities can hinder cooperation To enhance understanding and support, it's essential to thoroughly socialize the rationale and procedures of redistribution among all parties involved Regular cross-sectoral platforms can facilitate information exchange and coordinated planning Additionally, utilizing established village networks and respected community elders can strengthen grassroots communication and awareness campaigns, minimizing disruptions and objections.
Sustainable land management is crucial for achieving long-term agricultural goals, particularly in northern regions facing land degradation from water depletion, erosion, and climate change-related disasters Redistribution efforts alone cannot reverse environmental decline; therefore, integrated conservation practices such as timber lot diversification, soil nutrition maintenance, and drought-resilient cropping are essential Enhancing outreach on organic techniques and ecosystem restoration will not only protect equitable access but also improve climate resilience for vulnerable rural communities This approach ensures a balance between social and environmental sustainability, reinforcing the positive impacts of redistribution through stronger natural resource foundations.
Solutions to enhancing poverty reduction in the Northern Lao provinces
As the 8th 5-Year National Socio-Economic Development Plan approaches its conclusion, rural development, poverty eradication, and cooperatives have emerged as strategic priorities for the Party-State and the region Acknowledging the global significance of these initiatives, Laos has experienced both favorable conditions and challenges over the past five years that have hindered development at various stages Moving forward, it is crucial for the Lao PDR to identify new opportunities and challenges to effectively implement the upcoming 9th 5-Year National Socio-Economic Development Plan.
(2021 - 2025) as well as the Plan for Agriculture, Forestry and Rural Development can achieve the set goals Therefore, we must pay attention to the following issues.
The global community is committed to addressing challenges, particularly through the UN's Sustainable Development Goals, with the first goal focusing on eradicating poverty by 2030 Major nations recognize the significance of poverty alleviation both domestically and globally, which enhances efforts in underdeveloped regions like Northern Laos Between 2021 and 2025, Laos is set to complete various development projects, including the Laos-China railway and expressway initiatives, as well as large-scale irrigation and special economic zones, positioning the country as a central hub connecting major powers to ASEAN Additionally, lessons learned from other countries, particularly China and Vietnam, provide valuable insights for Lao PDR's development Political stability, a strong social order, and investments in human resources and economic infrastructure have facilitated rural development and improved poverty alleviation efforts in Northern Laos, supported by the nation’s rich natural resources and a committed government.
While opportunities exist, significant challenges must be acknowledged Recent years have seen a rise in natural disasters, climate change, epidemics, and economic crises, alongside escalating conflicts between major powers that hinder the execution of the five-year socio-economic development plan The ongoing COVID-19 pandemic has exacerbated socio-economic recovery efforts, impacting cooperation and border trade, leading to increased unemployment and poverty Laos' fragile economic foundation, reliant on environmental resources, poses risks to small and household producers, particularly in rural areas Additionally, the slow development of human resources and a shortage of local officials hinder progress, while limited government budgets restrict funding for rural development and poverty alleviation projects, especially in remote and border regions.
5.2.1 Solutions from local government in poverty reduction in the northern Lao provinces
The Lao Government is intensifying its efforts in rural development and poverty alleviation by focusing on building political bases and transforming rural and mountainous areas into self-reliant centers for production and food security This initiative includes developing essential infrastructure and encouraging private sector participation through attractive policies The government is committed to evaluating the implementation of rural development strategies outlined in various decrees and resolutions, aiming to eliminate poverty in households and villages By promoting effective monitoring of plans and budgets, the government seeks to integrate financial and personnel strategies to achieve poverty reduction goals Additionally, it emphasizes the importance of utilizing science and technology in production, enhancing local governance, and ensuring balanced development between rural and urban areas, while fostering sustainable livelihoods and improving the quality of local leadership in poverty alleviation efforts.
The Northern Lao Provincial Development Work Plan plays a crucial role in the Ministry of Agriculture and Forestry's strategy for rural development and poverty alleviation, serving as one of its three key pillars and four major initiatives.
The 5-year plan for rural development, poverty alleviation, and cooperatives from 2021 to 2025 is strategically aligned to meet the objectives of the agricultural, forestry, and rural development initiatives, as well as the ninth national socio-economic development plan This comprehensive rural development strategy outlines seven specific work plans aimed at achieving its overarching goals and ensuring effective implementation during this period.
Firstly, the Legal and Policy Development Plan:
The primary objective is to establish policies and legislation aimed at rural development and poverty alleviation, which will serve as a foundation for implementation at both central and local levels Key initiatives include the Law on Cooperatives, the Comprehensive Rural Development Scheme, and strategies for population and occupation distribution Additionally, the program outlines national standards and indicators for new rural development, as discussed in the Government's Regular Conference and the Annual Session of the National Assembly for the 2021-2025 period.
The comprehensive rural development project aims to establish clear directions and goals for enhancing the living standards of people in border and ethnic areas, focusing on agriculture, forestry, and rural development It includes strategies for population and occupational distribution, ensuring balanced growth and stable incomes The project will strengthen poverty alleviation standards and develop cooperative laws to unify rural development efforts across the country Special incentives will be introduced to attract investments in underdeveloped regions, while guidelines for rural development and poverty alleviation will be drafted for the 2021-2025 period The budget plan requires 15.4 billion kip for 18 projects, including initiatives for rural development, poverty standards, cooperative laws, and legislative policies, aimed at effectively implementing these goals.
Secondly, the plan to conduct the assessment
The objective is to establish and assess national standards and indicators aimed at eradicating poverty in families, villages, and districts, while fostering the development of rural areas and creating robust new rural communities This initiative aligns with the Party's Congress Resolution and the National Socio-Economic Development Plan, as well as the sixth plan for agricultural, forestry, and rural development, ensuring a comprehensive approach to poverty reduction.
The article emphasizes the importance of disseminating national standards and indicators for building poverty-free families and villages, as well as developing strong districts and new rural areas across the country It highlights the need for inspections to evaluate poverty alleviation efforts and set clear objectives for rural development and cooperative encouragement within five-year plans Additionally, it calls for assessments of priority development areas and public investment projects, including aid and loan initiatives at the village level A key focus is on creating and maintaining a robust database system for rural development and poverty alleviation information Finally, it outlines a budget plan estimating 9.6 billion kip for 13 projects aimed at supporting these assessments nationwide.
Thirdly, the Plan for rural development and poverty alleviation
The goal of ongoing rural development and poverty alleviation focuses on significant advancements, including increasing the number of households emerging from poverty to 204,360, raising the total from 964,149 to 1,168,509 The initiative aims to reduce the percentage of poor households to 5.74%, while also increasing poverty alleviation efforts by 3,104 households, resulting in a total of 7,871 Additionally, the plan seeks to uplift 69 districts out of poverty, expanding from 53 to 122, and aims to develop 245,754 households nationwide, up from 736,996 There is a target to establish 10 large urban villages in rural areas, along with the development of 20 key points for new rural areas A fund of 500 million kip is set to support poor and developing districts, with a goal of establishing 64 funds and 18 model funds across the country Furthermore, the initiative plans to provide cash transfers to 14,000 individuals, primarily women and children under 2 years old, ensuring that 40% of children in targeted villages receive nutritional support across 12 districts in four northern provinces.
To prioritize rural development and poverty alleviation, it is essential to establish and implement comprehensive development plans at key points, focusing on the creation of development villages, new rural areas, and large urban villages in rural regions, in collaboration with both central and local governments Additionally, it is crucial to disseminate the comprehensive rural development scheme to ensure uniform understanding and effective implementation across all organizations involved.
To promote sustainable economic growth and improve living standards in rural areas, it is essential to foster production conditions, enhance access to capital, and provide professional development opportunities nationwide Special attention should be given to mothers and children in rural communities, particularly pregnant women, ensuring they receive essential healthcare and nutrition in 879 villages across four northern Lao provinces Encouraging both domestic and foreign investments will strengthen the link between production groups and consumption markets Infrastructure development is crucial, focusing on building and repairing roads and transport systems to connect rural areas effectively Strengthening political systems will empower communities to actively pursue self-development and poverty alleviation, addressing disparities between urban and rural regions Establishing capital funds in poor districts will facilitate targeted financial support for village development projects, while ongoing monitoring and evaluation of these initiatives will ensure their effectiveness The comprehensive rural development and poverty reduction plan includes 245 projects with a total budget of VND 892.01 billion, aimed at fostering sustainable growth and improving the quality of life for rural households.
10.2 billion kip; budget plan for the development capital fund of 6 projects, worth 6.3 billion kip.
Fourthly, the Plan for the distribution of population and occupations to the people:
The objective is to effectively allocate population and employment opportunities to individuals lacking stable residences and occupations, targeting 25 key areas This initiative focuses on those impacted by development projects, particularly popular and distinct initiatives governed by the Law on Population and Occupational Distribution These efforts align with the Population and Occupation Distribution Strategy for 2021-2030, aiming to address the challenges of uncontrolled migration that do not comply with established regulations, which have seen a decline in the previous year.
The development plan aims to identify and allocate budgets for 25 areas, ensuring alignment between central and local governments on settlement planning and industries while fostering compliance with relevant laws It emphasizes the dissemination and adherence to these laws, alongside promoting production, training access, and experience sharing for professional development, particularly benefiting women and children in key settlement areas The plan prioritizes stable housing and livelihoods for vulnerable households, addressing issues in small villages affected by deforestation and government relocation programs It seeks to arrange stable settlements, mitigate indiscriminate migration, and systematically synthesize information on displaced populations Monitoring land allocation and acquisition is crucial, with regular reporting intervals to track progress The budget plan includes 83 projects valued at 300.65 billion kip, focusing on state investments and expertise development initiatives.
5.2.2 Solutions from other stakeholders in poverty reduction in the northern Lao provinces
Recommendations to Lao governement in poverty reduction in the northern Lao provinces
In order to enhance poverty reduction in the northern Lao provinces, the Government should organize the implementation and inspection, supervision and promotion.
Deployment: Empower the Planning Department to cooperate with the Rural
The Development Sector and cooperatives are tasked with disseminating the implementation plan to foster consensus and guide effective methods for executing the 5-year plan in compliance with relevant laws The Department of Rural Development and Cooperatives is responsible for organizing this plan, focusing on policies, legal frameworks, and budgetary requirements, including detailed project plans Additionally, the Rural Development Sector and Cooperatives, along with the HCMC Department of Agriculture and Forestry, will oversee the development of this plan across Vientiane and provinces nationwide, ensuring high accountability for effectiveness and efficiency Departments under the Rural Development Sector are also responsible for mobilizing and securing grants and loans from both domestic and international private sectors and organizations.
To enhance the effectiveness of rural development and cooperative initiatives, it is essential to implement regular monitoring, inspection, and evaluation processes guided by party committees and administrative agencies at all levels The Department of Rural Development and Cooperatives will serve as the primary body for overseeing the execution of strategic, five-year, and annual plans, while also compiling comprehensive reports for the Ministry of Agriculture and Forestry Additionally, relevant ministries and organizations will actively supervise and assess local branch performance, ensuring timely reporting to the Government The provincial and district-level Departments of Agriculture and Forestry are tasked with monitoring and evaluating the implementation of these plans and projects, regularly updating the Party Committee of the Provincial Department of Agriculture and Forestry Furthermore, the Department of Rural Development and Cooperatives will oversee the progress of rural development, poverty alleviation, and cooperative initiatives through monthly, quarterly, and annual reports, ensuring consistent accountability and improvement in these vital areas.
To enhance rural development in China, it is crucial to improve coordination between the rural development sector, cooperatives, and related sectors at the local level This involves regulating policies, strategies, and legal documents to create a cohesive system for poverty alleviation and rural transformation The government must establish clear assignments for local management while the Department of Rural Development and Cooperatives will lead coordination efforts with various ministries and organizations Over the next 2.5 years, comprehensive reviews and detailed project plans will be developed to ensure effective implementation at the grassroots level Additionally, the active participation of state organizations, private entities, and diverse economic sectors is essential to realize the goals of the five-year plan.
To enhance rural development and cooperatives, it is essential to establish a cohesive organizational structure that spans from national to local levels This structure should align with political and professional tasks, serving as a central coordination hub for effective and harmonious operations Efforts must focus on increasing the number of district-level civil servants and rotating staff to key positions, adhering to a systematic approach Additionally, improving management mechanisms and building a comprehensive staff training program is crucial This program should encompass professional training, political reasoning, foreign languages, and information technology, conducted annually to elevate the capabilities and political awareness of personnel, ensuring they can effectively fulfill their responsibilities.
The Department of Rural Development and Cooperatives is responsible for researching and implementing the Party and Government's guidelines, policy plans, and directives into strategic and operational plans for rural development and cooperatives It coordinates with relevant ministries to regulate and adjust policies in line with these directives at each stage Additionally, the department mobilizes and attracts domestic and international support, investment, and cooperation to harness resources for rural development It is accountable to the Party and the Ministry of Agriculture and Forestry for the outcomes, challenges, and limitations encountered in the implementation of rural development initiatives.
Localities are responsible for researching and implementing the Party and Government's guidelines, policies, and plans related to rural development over five-year and annual periods, tailoring them to their specific situations They must actively attract domestic and international aid and investment for rural development projects and cooperatives, while appropriately staffing the rural development sector to meet actual needs Local leaders should direct relevant departments to educate the community about Party and State policies, encouraging participation in local development and supporting disadvantaged households Furthermore, they are accountable to the Party and the Department of Agriculture and Forestry for the outcomes of poverty reduction efforts and rural development, focusing on the construction of new urban areas in rural regions as per government decrees.
To enhance rural development and cooperative initiatives, it is essential to systematically organize and distribute legal documents to localities and ministries for effective monitoring and implementation Establishing specialized committees with clearly defined roles and responsibilities will facilitate regular reporting to party ministries, ensuring appropriate guidance at all levels Developing detailed plans, programs, and projects prior to execution is crucial, along with allocating sufficient budget resources annually to support practical operations Ongoing monitoring, evaluation, and reporting will help draw lessons learned and inform the creation of more targeted plans for future years.
Recommendation for home-based businesses in the Northern provinces in Laos
For home-based businesses in the northern provinces of Laos to actively engage in poverty reduction and contribute to sustainable economic growth, the following actionable recommendations can be considered.
Diversification and value addition are essential for home-based businesses in northern Laos aiming to reduce poverty and promote sustainable economic growth By expanding their product offerings, entrepreneurs can protect against market fluctuations, reach a broader audience, and generate multiple income streams This requires a deep understanding of market trends and customer needs, achievable through diligent research Introducing complementary products and leveraging seasonal demands can enhance sales opportunities, while partnerships with local businesses can create attractive product bundles Improving product quality through better craftsmanship and materials, along with effective branding and packaging, can increase perceived value and profit margins Certifications for quality and ethical sourcing are increasingly important in global markets Unique product innovations and convenient services like delivery or customization can further enhance customer experience These strategies not only foster business growth but also strengthen community economic resilience, playing a crucial role in poverty alleviation and sustainable development.
A successful home-based business in economically vulnerable regions like northern Laos relies heavily on effective financial management and a strong savings culture This includes meticulous record-keeping, disciplined budgeting, and strategic planning, which together provide business owners with a clear understanding of their financial health and facilitate informed decision-making Efficient budgeting ensures essential costs are covered while reserving funds for growth opportunities Additionally, establishing a savings routine is crucial for financial sustainability, offering a buffer against unexpected downturns and reducing reliance on high-interest loans Savings are vital for capital accumulation, enabling future expansions and investments in productivity-enhancing tools In areas with limited financing options, cultivating a savings habit not only serves as a safety net but also supports self-financing for business growth By fostering financial discipline and a savings mindset, home-based businesses in Laos can achieve long-term stability and contribute to economic empowerment, ultimately aiding in the fight against poverty through sustained employment and community development.
Networking and collaboration are essential for home-based businesses in northern Laos, as they enhance individual success and promote economic development By forming strong local networks, entrepreneurs can share resources, knowledge, and support, creating a synergistic environment that benefits all These networks facilitate learning from experiences, sharing market insights, and collaborating on initiatives that boost collective sales and marketing Strategic partnerships with suppliers and distributors can lead to cost savings, improved market access, and shared distribution channels Collaboration also drives innovation by introducing new perspectives that can lead to product development and business opportunities In regions with limited infrastructure, collective action empowers businesses to advocate for better local conditions, financing access, and fair regulations Ultimately, through networking and collaboration, home-based businesses in northern Laos can foster a supportive ecosystem that accelerates growth and contributes to sustainable regional development, overcoming challenges like isolation and resource scarcity.
Community involvement is essential for home-based businesses in northern Laos seeking to combat poverty effectively By engaging with their communities, these businesses build trust and support, benefiting both themselves and local residents Initiatives like sponsoring education, contributing to healthcare, or improving access to clean water showcase their commitment to community well-being, enhancing customer loyalty and brand image Additionally, by hiring locally, home-based businesses create job opportunities that stimulate the economy and develop a skilled workforce, fostering a positive cycle where employees advocate for the business This community-centric approach allows businesses to better understand local needs, leading to improved customer satisfaction and retention.
Home-based businesses in Laos play a vital role in their communities, enhancing social and economic stability beyond mere commercial activities By engaging with local residents, these businesses foster a supportive network that is essential for economic growth This community-focused strategy not only aligns with cultural values but also promotes sustainable business practices, ultimately contributing to long-term development and poverty reduction in the region.
Advocacy and policy engagement are essential for home-based businesses in northern Laos, where regulations often do not support small-scale entrepreneurs By forming collectives, these businesses can amplify their voices, lobby for favorable policies that reduce bureaucratic barriers, provide tax incentives, and protect against unfair practices Active participation in public forums and legislative processes, such as attending town hall meetings and submitting feedback on regulations, is crucial for staying informed and influencing policy Building relationships with government officials can lead to insights on future policies and access to resources like grants and training programs While advocacy requires persistence and collaboration, the benefits include improved business conditions, job creation, increased investment, and enhanced economic stability, ultimately fostering a supportive ecosystem for growth and contributing to regional economic development and poverty reduction.
Conclusion
Poverty alleviation in Laos, particularly in northern provinces, is being supported by public investment and foreign assistance, leading to a gradual decrease in the poor population Despite this progress, a significant wealth gap persists, with the disparity between the rich and poor widening While the GDP growth rate has improved due to a shift towards a market-oriented economy, the pace of poverty reduction lags behind economic growth Consequently, poverty continues to pose a substantial challenge for both the northern provinces and the broader Lao PDR during this era of globalization.
The poverty reduction policy presents significant challenges for the Lao government, including the need for administrative reforms, substantial budget allocations, and extensive human capital for effective program implementation and resettlement of affected populations To enhance the effectiveness of priority programs, it is essential to develop specific action plans and execute projects aligned with medium- and short-term goals, ensuring clarity and realism Crucially, a nationwide campaign to disseminate government development visions and strategies is necessary to deepen understanding of policy issues across all levels of society.
To effectively reduce poverty in Lao PDR, policies must align with socio-economic development specifically tailored for ethnic minorities, who represent a significant portion of the impoverished population Many of these groups reside in remote mountainous regions of northern Laos, where they face unique cultural, linguistic, and social challenges Addressing these issues requires the implementation of targeted policies and strategies that consider the diverse needs of ethnic communities throughout all stages of the policy cycle.
Between 2011 and 2022, Laos experienced significant socio-economic development, achieving many millennium goals, but this progress has been impacted by the Covid-19 pandemic that began in late 2019 The Asian Development Bank (2023) forecasts economic growth of 3.4% in 2022 and 3.7% in 2023, contingent on successful debt negotiations and pandemic control Despite being a surplus country and attracting foreign investment, particularly in agricultural exports and the energy, mining, and manufacturing sectors, the inflation rate surged to 9.9% in April 2022, up from under 2% in 2021 This inflation, coupled with prolonged job losses, has strained household incomes, pushing many low-income families in Northern Laos closer to poverty Ethnic minorities in the region face even greater challenges, requiring extended efforts to combat poverty To transition out of the least developed country status, international organizations recommend that Laos enhance infrastructure, improve border efficiency, and foster a better business environment to attract investment and create jobs, while also promoting advantageous sectors like agricultural production and nature-based tourism (World Bank, 2022).
In the Lao PDR, science and technology are crucial for socio-cultural development, driven by the policies of the Lao Party and State These advancements play a vital role in all phases of development activities, from problem identification to evaluation To effectively address issues related to culture, poverty, education, and health, it is essential to conduct thorough studies tailored to local contexts and customs While external support can temporarily enhance community development efforts, fostering local capacities is imperative for sustainable progress Ultimately, it is the responsibility of the impoverished communities to identify their cultural needs and actively work towards overcoming poverty.
Lao PDR faces integration challenges within regional and global economies, including ASEAN, AFTA, and the WTO, which present significant opportunities for socio-economic development However, this integration also poses risks that may exert pressure on the Lao economy, particularly affecting the impoverished population.
LIST OF WORKS RELATED TO THE DISSERTATION
THAT THE PHD CANDIDATE HAS PUBLISHED
1 Alounxai Sounnalath (2022), ‘The relationship of social dimensions and poverty alleviation in the context of digital transformation Era: The case of Laos PDR’,
International conference proceedings: Digital transformation in international supply chain, pp.666-677, Labor publishing house.
2 Tran Van Khoi, Nguyen Dieu Linh, Thanongxay Khontphaythone, Vilaysanh Phommysay, Alounxai Sounnalath, Padaphone Saykhot (2022), ‘Proposed model on circular economy affects sustainable performance in vietnamese construction enterprises’, International conference proceedings: Digital transformation in international supply chain, pp.242-262, Labor publishing house.
3 Alounxai Sounnalath, Nguyen Thuy Linh (2023), ‘Poverty alleviation in Lao PDR: Current situation and creative solutions to prevent poverty from recurring’,
The 17 th IFEAMA International conference proceeding in Vietnam: Knowledge transformation and Innovation in Global Society: From the perspectives in a transforming Asia, pp.1148-1158, National Economics University Publishing
1 ADB (2001), Key indicators of developing Pacific and Asian countries 2001,
2 ADB (2005), Ethnic minority Development Framework for forest Plantation
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1 Can you tell me about yourself and your background?
2 How did you come to start your home-based business?
3 What products or services does your business provide?
4 How many years have you been operating your business?
5 Can you walk me through a typical day in your business?
6 How has your business changed or evolved since you started?
7 What was your initial investment in starting your business, and how did you finance it?
8 Can you provide an estimate of your monthly or annual revenue?
9 What percentage of your household income comes from your business?
10 Who are your main customers, and where are they located?
11 How do you market or advertise your products or services?
12 Have you faced any significant challenges in reaching your customers or expanding your market?
13 What are the most significant challenges you face in operating your business?
14 Have you received any support from the government or non-governmental organizations (NGOs)? If so, what kind of support?
15 Are there any policies or programs you wish were in place to help your business?
16 In what ways does your business contribute to your community?
17 Do you source materials or hire services from within your community?