By Charles Ostertag, Give2Asia
Landlocked and littered with nearly nine million pieces of unexploded ordnance from the Indochina Wars, Laos faces a host of challenges in achieving its goal of exiting the list of Least Developed Countries (LDCs) by the year 2020. The human development figures indicate how much is yet to be done for Laos to reach its goal: the infant mortality rate stands second highest in Asia with nearly 80 deaths in every 1000 live births; 40% of children under five suffer from malnutrition; and an average of 394 people die each year from accidental detonation of dormant ordnance. Laos, however, has a more immediate date on its development itinerary than that for exiting the list of LDCs—the country also plans to join the World Trade Organization by 2010. Approaching these two distinct yet inextricably linked goals, Laos faces the paramount challenge of ensuring that human development keeps pace with economic development.
No clearly defined model has ever existed that neatly balances economic growth and social, human development. Nor does a burgeoning Lao economy, which has averaged an annual growth rate of 7.26% since 2003, ensure the enrichment of the Laotian people (an exceptionally diverse population comprising more than 70 ethnic groups). Cheap labor and the rich, untapped resources embedded within the country entice multinationals to fund development projects, such as the 1,080-megawatt Nam Theun 2 Hydropower Dam (Laos’ largest to date) and private ventures in ore mining. As the government improves the environment for trade and investment, multinational corporations and foreign investors are eagerly investing in Laos, though who will ultimately benefit from these investments is tenuous and indeterminate.
Behind the ostensibly laudable practice of national investment and trade improvements, the Lao government is borrowing heavily in this process and has earned itself a place on the list of Highly Indebted Poor Countries as well. With the Lao government planning to use the profits from hydropower and other development projects to fight poverty within the country, it remains to be seen if Laos can accomplish this goal in addition to paying off mounting debt.
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