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Chinese Belt and Road Initiative (BRI) and the Sustainable Development Goals (SDGs) in Lao P.D.R


Abstract and Figures

Practically, the concept and activities of BRI in terms of infrastructure, investment ownership and evolution of BRI in previous years is still unclear among policymakers in the Lao PDR. This could distort the direction of understanding and decision making in the years to come. More importantly, the policy formulation related to BRI and its activities are mainly driven by Chinese counterpart due to the weak capacity of Lao side. Therefore, the purpose of such policy and activities might not optimally serve the goals of national policies such as the achievement of green economy, LDCs and SDGs. Regarding to potential impacts of BRI on the achievement of SDGs including SDGs goal 18-reduce impact of UXO (the national SDG goal). There are risks and opportunities. The risks are mainly embedded with the social, environmental and debt sustainability whereas the potential opportunities could primarily be in the areas of poverty, economic and capacity building. Therefore, collecting information, monitoring and evaluating the impact of BRI activities on SDGs from now on is crucial to inform and suggest the policy options to policymakers and practitioners to exploit the benefits while mitigate the risks to ensure the achievement of SDGs by 2030. Special attention should be focused on the impact of railway project and its spillovers on the SDGs at the national level and local communities.
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This study aims to assess the productivity of Lao economy and manufacturing industry based on qualitative and quantitative analysis. Firms in enterprise survey and economic census survey are used for quantitative analysis facilitated by Data Envelopment Analysis (DEA) and Tobit estimate. The study argues that Laos could develop the manufacturing industry further in the future since its share in GDP is small. Improving the productivity is crucial to develop manufacturing industry in the future. There is a room to improve the productivity via efficiency component since many existing firms achieved only 20-40 percent of their full efficiency. To end this, this study proposes that the policy interventions for short term should be prioritized in the areas of introduction of accounting system, credit access and international quality certification to manufacturing firms. Whereas, the infrastructure development and increasing market access are considered as the medium and long-term policy recommendation. The experience of Japan shows that economic growth was driven by manufacturing sector. With panel data, the sources of productivity growth for Japanese firms can be decomposed and analyzed. It reveals that although firms made technological progress boosting productivity but they were less efficient over time during the study periods, which implies that such technologies were underutilized. The case study of Japan indicates that the availability of statistics is essential to improve research on productivity analysis of Lao economy and industries in the future. Therefore, the statistics on Lao industries needs to be urgently improved especially Economic Census Survey.
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