Publications

Written by Mekong Institute

The purpose of this study is to analyze factors that have made an impact on export and import between Lao PDR and its three principal trade partners, Thailand, China, and Vietnam from 1990 to 2010. The specific research questions are:
1.What are the main factors affecting trade between Lao PDR and its three principal trade partners
2. If the exchange rate changes drastically, how will it affect Lao PDR trade

The theory of international trade law of absolute advantage, comparative advantage, and export supply and import demand concept were reviewed to analyze the trend. Also, the theory of real effective exchange rate was reviewed to arrive at logical concluding of the study.

The data used in this study is gathered from the following: Lao PDRs aggregates export-import, GDP and foreign exchange reserves of Lao PDR, Ministry on Industry and Commerce of Lao PDR, and National Statistic Center of Lao PDR. On the other hand, unit values of Lao PDRs export-import price are collected from international indicator statistics, which is a publication of the Asian Development Bank (ADB), World Bank, etc.

To estimate the export and import functions of Lao PDR and its principal partner countries, the Ordinary Least Square Method (OLS) model which is a formula of multiple regression natural log-linear form was applied. The factors affecting Lao PDRs export were observed to be the real gross domestic products of Thailand and foreign direct investment. Other factors are the exchange rates and foreign direct investment. In the case of China, Lao export depended on only the gross domestic product of China, while the factors affecting Lao import, were real gross domestic product of Lao PDR. In the case of Vietnam, factors affecting Laos exports were real gross domestic product of Vietnam, exchange rates, foreign direct investment.

Written by Mekong Institute

Throughout the 1990s, the Cambodian forestry sector was in a state of crisis due to widespread illegal logging, corruption, ambiguous forest laws and concession agreements, and weak management and law enforcement. Until the late 1990s, responsibility for natural resource management (NRM) in Cambodia was vested in two line ministries:
(i) Ministry of Environment (MOE) - for forest within the Protected Areas; and
(ii) Ministry of Agriculture, Forestry and Fisheries (MAFF) - for protected forest and forests outside the PAs.

The Royal Government of Cambodia has reformed the forestry sector since early 2000 to engage the communities in natural resource management process through two main forms:
(i) the Community Protected Area (CPA); and
(ii) the Community Forestry (CF).

Since the start of the CPA and the CF, particularly in Siem Reap province, there is yet specific evidence to be found on how effectively the CPA and CF operate and on the level of socioeconomic benefits gained by the CPA and CF members from their participation in the Community Based Natural Resource Management (CBNRM) activities. This study investigated these issues in one CPA (Popel in Khnang Phnom Commune) and one CF (Thbaeng Lech in Thbaeng Commune) in Siem Reap province, Cambodia.

The specific research guiding questions for this study are: (i) why were the CPA and CF started, and what was the process by which they were established; (ii) how effective are the CPA and CF in meeting their agreement objectives; and, (iii) do CPA and CF increase members household socioeconomic benefits

To acquire necessary information, 5 sets of questionnaires were developed for 5 different respondent groups. Two rounds of field interview were conducted. The first round was conducted in April 2012, with the assistance of 4 enumerators to interview 73 households - consisting of 21 CPA households, 52 CF households and other key informants. The second round was conducted in May 2012 to validate the data. The researcher reviewed the findings with key informants and natural resource management specialists when the draft report was.

The researcher adapted the effectiveness assessment concept used under the ADB Guidelines for Preparing Performance Evaluation Reports (ADB, 2006) and the effectiveness assessment framework developed by AVSF (2010) to assess the effectiveness of the CPA and CF management and Operation. SPSS and Excel spreadsheet were used to analyze the data, drawing the relative frequency distribution and weighted mean. On the establishment process, it was concluded that:
(i) the CPA Popel was established following the government policy and by the projects of development partners, but that the community members were not made fully aware of their roles and responsibilities in the CBNRM process; and
(ii) the CF Thbaeng was also established following the government policy and by the development partner projects; and the community members were fully engaged. It was also concluded that the management and operation of CPA Popel is Less Effective while CF Thbaeng Lech is Highly Effective in delivering resource conservation and livelihood improvement services.

A majority of CPA households are poor, with most adults being illiterate. The contribution of forest and NTFPs to the livelihoods in CPA area is high but the households in CF Thbaeng Lech are better off - 56% could read and write. CPA households did not have any land tenure securities, while about 50% of the CF group had land certificates. On the expense aspect, rice and health care are the major expenses for CPA members while rice and housing are the major expenses for CF members. Agriculture investment is the smallest share of expenses (not including labor costs) for both groups.

There, the application of better rice farming techniques and greater investment in agriculture (such as improved seeds and inputs) would contribute to the higher general income and thereby improve their livelihoods. The low or very low benefits were reportedly due to restricted access to natural resources as well as the free utilization by people outside their community; about 38% of the members perceived that forest quality had declined. The benefit level in CF group is encouraging: up to 63% of members received high and very high benefits; 25% received neutral benefits; while 2% received very low benefits. The CF forest was poorly degraded when it was given to the CF, but after CF operation, the forest grows well and the members gain more benefits then. To the question of whether they want the CBNRM activity to continue in their area or not About 67% of CPA members said yes; and 33% could not decide while 96% of the respondents in CF area said yes, and only 4% could not decide.

Written by Mekong Institute

The study was conducted to understand the current status of Prek Thnot CPA. The study used qualitative data such as community transect, time line, seasonal calendar, FGD, and questionnaire. About 90 households were selected for interviews on the livelihood activities, awareness of the members, the level of participation as well as benefits of participating as members in Prek Thnot CPA.

Prek Thnot CPA was established in 2002 with the total member of 864 households supported by the Ministry of Environment and Borkor national park with the total area of 2006 ha, with 216 ha given to the Administration of Forestry, Ministry of Agriculture Forestry, and Fisheries for managing and conservation in 2006. The community was divided into 3 subactivities such as rattan, traditional medicine, and eco-tourism groups which were supported by the Save Cambodia Wildlife (SCW), UNDP, WWF, ADB, Traffic, IUCN organizations, and the Ministry of Tourism.

The result showed that most of the respondents participated in committee election in Prek Thnot CPA and about half of the respondents were aware of the management process of the community. For the level of participation, most of the respondents participated in low level. The limitation of participation in the meeting was caused by livelihood activities condition. In decision making and planning process, most of the respondents did not participate because these processes were only done among the committees, village chiefs, commune councils, and stakeholders. Moreover, their lack of knowledge made them just follows what the committees offered. In management and conservation process, about half of the respondents participated on a low level and about one fourth of the respondents participated in the implementation project. The level of how members participated in the implementation process depended on the community activities. When asked about the benefits of participation in capacity building and skills, about 44% of the respondents attended the training, which two thirds of them perceived benefits from the training. In this case, 50% of the respondents got job opportunities and more than 50% had increased income after participating as members.

The level of participation was relatively low caused by the lack of communication between community and members; and limited knowledge on the tasks and roles of managing the community goal of Prek Thnot CPA.

Written by Mekong Institute

The objectives of the research aimed to study the impact of North – South Economic Corridor towards the changing economic, social and culture of the Hmong ethnic group residing in Chiang Khong district, Chiangrai province, Thailand.

The researcher selected 230 household samples out of 432 households by employing Taro Yamane for sampling selection. The questionnaires and participant observation were used as a method of data collection. The statistical tools for analyzing the data are frequency distribution, percentage, mean, standard deviation and t-test.

The study revealed that the Hmong ethnic group had transmigrated to settle in the areas of Chiang Khong district more than 20 years. The main occupation is agriculture, some income derived from maize, rice farming, gardening, and cloth sewing. The findings indicated that before and after the construction of the North South Economic Corridor, the ways of life of the Hmong ethnic has been adversely affected both in the past and at present with significant difference at 1 percent level.

The economic aspects; (1) there is an exchange of cultural goods along the borders which are benefited to trade and investment, (2) there is an opportunity to increase higher family income, (3) there is the gaining of skills and experiences in livelihood performance, (4) there is change in occupation and production technique. The social aspect: (1) there is a change in living pattern, material used for building and house structure, (2) there is communication and social mobility between the borders for economic and social purpose, (3) there is an opportunity for education. The cultural aspect: (1) there is a decrease in using local wisdom in health care pattern, (2) there is a decrease in desirable behavior and ethnic socialization in the family, and (3) there is a change and an exchange in tradition and tribal culture along the borders of Thailand and Lao People's Democratic Republic.

The direction of adaptation of the Hmong ethnic group towards the impact along the path of North South Economic Corridor which has been evidently observed that there are business networks established for value added to the cultural products, conservation, revitalization, and transmission of tribal identity. Of utmost importance is to develop the standard of living for quality of life improvement, and more importantly, the increase in earning capability, prevention of diseases, security in life and property, as well as facilitation in the border trades are required.

Written by Mekong Institute

The objective of this research aims to study the push and pull factors that are causing the mobility in the labor market towards Myanmar migrant workers situated in the Chiang Rai province of Thailand. It also aims to analyze the implementation of policies on the Mutual Agreement of Understanding on foreign labor employment. The recommended policy implementation will be proposed for labor management effectively.

This research employed mixed methodology using both quantitative and qualitative methods on two types of the sample population (1) 386 illegal Myanmar migrant workers by using Taro Yamane technique and Quota Sampling from the types of enterprises comprising 201 construction workers, 118 agriculture and livestock workers, 67 continuing agriculture workers, and (2) 10 representatives of the employer and the enterprise who hire the illegal migrant workers, 5 representatives of the government officers, through purposive selection. The methods of data collection consist of questionnaires and structured interview. The statistical tool used is frequency distribution and Pearson Product Moment Correlation for data analysis.

Research Findings

The research results revealed that the nationality and origin among the Myanmar migrant workers is Myanmar (73.3%), some other tribal groups are Shan people, Kachin, Karen, Tai Lue, Akha and Kayar. Most of the workers came from the Mandalay region. The push factor from the sending country which motivates them to come to Chiang Rai is caused by low income and low wage, unstable occupation, unemployment and there is no job opportunity, inadequate income to sustain the cost of living, need to increase family asset such as land and house, and also the process for leaving the country is easy. The pull factors from the receiving country particularly in the Chiang Rai province of Thailand were steady income, high opportunity to get job, easy to commute to Chiang Rai, ability to save money, high wage and the working environment is better than in the home country, good quality of life and basic needs such as food, clothing and housing had been fulfilled.

The findings had confirmed that the push factors from the sending country has shown relationship between the mobility of migrant workers to labor market in the Chiang Rai province correlates with low income, lack of amenities in life, and quality of life in the receiving country is much better. The recommended policy implementation proposed to the government is that there should be improvement in the employment procedure and established measure for proving the nationality.

Written by Mekong Institute

Foreign Direct Investment (FDI) has played a crucial role in the socioeconomic development of Lao PDR. It significantly enhanced the standard of living of people in the rural areas and contributed in the reduction of poverty. Over the years, people in the Northern part of Lao PDR gained advantage from the foreign investment from China.This paper focuses on investigating the impact of Chinese investment on agricultural export and poverty reduction by using Nasavang Village and Mainatao Village, in Oudomxay as the case study conducted in 2009 and 2011. The findings of the paper indicate that investment inflow from China substantially contributes to the improvement of the socioeconomic development in the observed areas. The villagers could receive capital inflow and technological transfer in various plantations. It, thus, leads to empower the agricultural exports to Chinese market. Moreover, there was a significant increase in household income last 2010. The household income per capita in Nasavang and Mainatao increased by two and ten folds, respectively. More importantly, investment inflows from China reduced the number of poor households in the villages by almost half of the total number of households compared to 2008.

Written by Mekong Institute

Luang Namtha, a province of Lao PDR, shares borders with China. Hence, Chinese investment has been expanding to Luang Namtha province in agricultural sector and service sector. Even though, there are five districts in Luang Namtha province, Namtha district is enjoying the most active investment and was chosen to be the bureaucratic center. Hence, this article focuses on investment in service sector especially Chinese investment in Namtha district and on determining the response of Lao government on both central and local government to Chinese investment. The data was collected through participant observation by being a customer in Chinese investment places, by semi-structural interview, and by reviewing involved documentaries and researches.

The result showed that there are key factors that considerably affect the investment decision of the Chinese investors in Namtha district. These factors are as follows: first, the political factor that is the Chinese government policy to northern Lao PDR as the opium replacement policy; second, the economic factor that is higher income from the investment and cost reduction because of changes in location; third, social factor that is infrastructure development and peaceful community in Namtha district; fourth, geographical factor that is the distance between Namtha district and China where Chinese investors can import products from China to Namtha district through international checkpoint and local checkpoint; and lastly, the fact that import products from China are exempted from tax. Since Chinese investment in service sectors have been expanding in Namtha district, this has positive and negative effects. There are more income resources for local people but it has changed their way of life, especially that of teenagers in local community. Teenagers, even younger than 18 years old were allowed entry to the clubs which generated a lot of noise pollution affecting residential areas.

From these impacts, the response of Lao's government is a strategic plan formulated through the 5th Socio-Economic plan and an investment law. It also allowed the local government to make a decision on general investment in order to lower difficulties. The roles of local governments allow Chinese investment in general business, registering legal entities, supporting one-door policy in provincial level, and withholding the general business. For the future trend on Chinese investment in service sector, there will be a continuing expansion as long as Lao's government supports Chinese investment in agricultural sector and tourism.

However, Lao's government faces some challenges such as the lack of budget to divide land between Chinese investors. This is also a negative impact towards natural resources and in the preservation of Lao culture from globalization.