Managing investment through a poverty and environment lens
Managing investment through a poverty and environment lens
Laos' management of foreign investments in extractive industries has improved since 2009, helping to ensure benefits are spread to communities and decrease environmental impacts.
Laos is like many developing countries in Southeast Asia; its economic growth is being driven by private investments, bringing the promise of greater opportunities and well-being to the people as well as challenges to environmental and rural livelihoods protection.
The wealth of Laos' natural resources has attracted huge investment inflows in recent years, with hydropower facilities, mineral exploitation and large-scale agricultural investments leading economic growth since 1985, according to the United Nations Development Programme (UNDP).
In 2013-2014 alone, foreign direct investment in Laos accounted for almost US$3.4 billion. With this rate of investment and an annual Gross Domestic Product growth rate of 8 percent, Laos is on track to meet one of the three key criteria for graduating from Least Developed Country status by the mid-2020s.
Managing the influx of investments so that benefits are spread equally among communities to alleviate poverty, while protecting the natural wealth of Laos' environment, is a major development challenge.
The UNDP and the United Nations Environment Programme are working closely with the government to improve the quality of planning, promotion and management of investments in extractive industries through the Poverty Environment Initiative.
Since 2009, the initiative has been working towards strengthening Laos' development plan and institutional framework to ensure that investments lead to sustainable development.
Poverty and environment concerns are now integrated into the 8th National Socio-economic Development Plan including in the plan's monitoring and evaluation framework.
Tools to regulate investment quality have been adopted by central and provincial authorities to more effectively regulate the quality of concessionary land investments, a type of long-term lease of government land by private investors.
Working closely with the National Economic Research Institute, the Poverty Environment Initiative has built research capacity to deliver quality data to inform investment management decisions.
The Initiative has also been working with the Department of Environment and Social Impact Assessment and the National Assembly, to improve Environmental Impact Assessments, Initial Environmental Examinations and Public Involvement processes of proposed investments.
At the provincial level, knowledge of poverty and environmental issues related to investments has increased and institutional strategies and investment tools are being introduced to better regulate the quality of concessionary investments.
This week the Ministry of Planning and Investment hosted a delegation of global donors of the Poverty Environment Initiative along with environmental management experts in Vientiane province. The visiting donors and experts met with the Vice provincial Governor Ms Singkham Khoungsavanh to gain insight into the Poverty Environment Initiative's support to the province as well as some of the socio-economic and environmental issues related to hydropower, mining and agricultural land concessions.
The United Nations Resident Coordinator and UNDP Resident Representative, Ms Kaarina Immonen, joined Ms Singkham and donors on a visit to a rubber plantation owned by foreign investors to see first-hand the impacts on local communities as well as the challenges and countermeasures taken by investors.
The visit involved a meeting with community members to discuss the benefits and impacts of the investment on their lives and communities. Community members were also updated on how they can be involved in the investment approval process.
