Contribution of Forestry to Poverty Alleviation - APFNet

Poverty Situation
Despite the significant economic growth, Lao PDR remains a country with much poverty. Poverty in
Lao PDR is defined as “the lack of ability to fulfill basic human needs such as not having enough food,
lacking adequate clothing, not having permanent housing and lacking access to health, education and
transportation services” (NGPES 2004).
Poverty in Lao PDR has a strong geographic dimension. Poverty incidence registers higher in the
uplands as compared to lowlands. In particular, it appears highest in the southwestern region of the
country, particularly along the Vietnamese border.
In general, there is a big poverty gap between rural and urban areas, as depicted in Figure VI.1.The
closure of the average national poverty line to the average rural poverty line indicates that the highest
poverty incidence remains in rural areas.
For concentrating poverty eradication schemes, the GoL identifies 72 districts as poor and a core group
of the 47 poorest districts has been selected for priority investments. All identified districts are located
in remote and mostly forest areas.
Figure VI.1. Poverty trend in Lao PDR
60
50
40
30
20
10
0
51
46
26.5
42.5
39.1
22.1
37.6
33.5
19.7
1993 1998 2003 2008
Source: Draft 7th NSEDP of Lao PDR.
178
31.9
27.6
17.4
Rural
Urban
Nation
To tackle the problem, the GoL is strongly committed to achieve the MDGs and targets set in its
National Growth and Poverty Eradication Strategy (NGPES) 5 . The strategy set the targets for stable
economic growth at 7.5% and the population living under the international poverty line to 24% by
2015. The strategy was elaborated and translated into the 6th National Socio-economic Development
Plan (NSEDP), which was implemented during the period 2006-2010. The 6th NSEDP considered
agriculture and forestry, transport, health, and education as priority sectors for poverty eradication.
The implementation of the 6th NSEDP resulted in a rapid economic growth and a satisfactory poverty
reduction rate. For instance, in this period GDP per capita increased from US$ 491 (2005) to US$ 1,069
(2010) and poverty headcount ratio reduced from 33.5% to 26% in the same period (Report on the High
Level Round Table Meeting 2010). The positive trend of poverty reduction in Lao PDR is also shown
in Figure VI.1.
In spite of the rapid economic growth, there is a big poverty gap between rural and urban areas. In
2010, more than 73% of total population still lived in rural, marginalized areas (Ibid.). These people
are heavily dependent on forests for their livelihoods, and the majority of them practices shifting
cultivation. According to Lao policy, this practice is one of the main causes of deforestation and must
be eradicated.
5 NGPES was developed and adopted by GoL in 2004 to guide poverty eradication in the nation.