Publications

Written by Mekong Institute

Lao PDR is a resource-rich country, with many natural resources, including forestry, agricultural land, hydropower and minerals. After a robust economic upward trend with an average 8 percent growth which was experienced over the past decade, Lao's economy is still expanding. Lao's economy has greatly benefited from high-profile capital flows to the country in terms of foreign direct investments, public and private investments among others. In addition, during the fiscal year of 2012, the total official development assistance (ODA) increased from USD 392.48 million in the year 2011 to USD 408.92 million in the following year 2012 (Official Development Assistant Data, 2012).

Essentially, the issues affecting the economic development, especially in Lao PDR, which is still one of the least developed countries, are characterized by being a small economy with a high poverty rate and had small budgets to support and build up the areas of economic and social development. Thus, the official development assistance has played an important role in the socio-economic development of Lao PDR, especially in the sectors depending on public investment. Official statements acknowledge that sound official development assistance has played a crucial role in fostering the government's goals of high economic growth rates of the country. In fact, many least developed countries have not achieved sustainable economic growth, despite the fact that they attracted more of both internal and external sources for supporting economic development progress.

In this context, the question still remains whether financial assistance, especially external sources in terms of ODA, do always promote economic growth in Lao PDR or not. Quite a number of studies have discussed the relationship between foreign assistance and economic growth, and the majority of those studies have focused on the link between Official Development Assistance on Economic growth in Lao PDR. This study has examined the impact of foreign assistance in the form of official development assistance on economic growth in Lao PDR by using time series data over the period 1985-2012. This study showed that the official development assistance has a positive effect on economic growth in Lao PDR. Thus, it can be concluded that ODA has contributed to economic growth in Lao PDR.

Written by Mekong Institute

The research finding describes the existing maize cropping system in Leuk Daek District of Kandal Province, Cambodia. In-depth interviews were conducted with key actors: maize farmers, maize collectors and processors. It is an information mapping flow showing the maize management system. Also, constraints and problems facing maize production and its marketing were analyzed to find out its marketing system. In order to reach the goal, some research tools were employed namely in-depth interview, focus group discussion (FGD), key informant interview and cost and return analysis. In total, 110 samples including, 5 government agencies, 5 input supplies, 3 collectors, 1 processor and 96 maize farmers, were selected for interview base on the Yamane Taro function and purposive sampling in difference actors along the chain.

The finding shown that, there were many actors involved in the maize value chain, including downstream input suppliers as well as upstream collectors and processors. Leuk Daek district contributed nearly 39% of cultivated area out of Kandal province. Maize farmers tend to practice mono cropping of maize production. Only 29% of maize farmers conducted mixed crop and crop rotation practice with mungbean, sesame and rice with the water source from digging wells and Mekong River. Farmers relied mainly on chemical shops in terms of input supplies. Seeds and chemical pesticides were directly recommended by chemical shop dealer seasonally. Approximately 80% of the farmers received information on application of pesticides and varieties of maize from the chemical shop dealer while 8% get such services from agricultural company and 12% get these from fellow farmers and provincial and district agriculture extension.

On average, maize cultivation land is 1.50 ha in dry season, but it decreases to 1.37 ha in the rainy season. Farmers can access credits for their maize cultivation from banks, micro finance institutions, chemical shops (in term of inputs), and others institutions with the percentages of 18%, 11%, 67% and 4% respectively. Most of the high income farmers access credits from the banks or micro finance institutions while the lower income farmers generally rely on chemical shops.

Farmers sell maize directly to middlemen, where payment will be done within 3-7 days later. The maize collector distributes 80% of the maize to Vietnam and 20% of which to domestic factories. The price of maize is set by the collectors with a net profit of 50% if they sell the grain to the domestic factory, CP Cambodia, and which accepts only the good quality product that meet their requirements. The lower quality will be export to Vietnam with lower price. Farmers can get a profit of approximately 294 Riels (0.074 USD) per kilogram of maize while collectors would earn 41 Riels (0.010 USD) per kilogram.

Furthermore, some challenges were attended in the production stage. They are issues related to seed quality, high prices of inputs in-kind loan with chemical shop, corn borer outbreaks, flooding, fluctuation of maize prices in the market, lack of marketing information access and the limitation of government and extension service provision. In order to solve such challenges, some recommendations would be appeared. The effective group should be established to manage the market system and reduce cost of inputs. Also the government agency services should be improved and extended into the village levels. The services of micro providers should be improved for easier access with lower interest rate.

Written by Mekong Institute

This thesis studies the impacts of real exchange rates on bilateral trade balance between Lao People's Democratic Republic (Lao PDR) and its major trading partners. The main objectives of this thesis are: (1) to study general trade balance between Lao PDR and each of its major trading partners (Thailand, China, and Vietnam). (2) to compile policies and information related to exchange rates applied in Lao PDR, and (3) to investigate the impacts of the exchange rate devaluation on trade balance of Lao PDR with its trading partners, and evidencing the J-curve phenomenon, if observed, on the country.

A descriptive analysis was performed using the annual import-export data from 2001 to 2012 (IMF, ITC) and the yearly exchange rate data between 1990 and 2012 (IMF). A quantitative analysis was also performed using data on quarterly imports and exports, exchange rates, and real GDP data from the 1993Q1 to 2012Q4 (IMF), calculated by using the Auto-Regressive Distributed Lag (ARDL) approach.

The descriptive analysis found that Lao PDR has been running a trade deficit. The country's main exports are copper, wood, ores, and electricit y; while its main imports are fuels, vehicles, machinery, metals, and electrical equipments. The principal exporter to Lao PDR is Thailand, to which Lao PDR exports mainly copper. China imports mainly ores and Vietnam wood from Lao PDR. The quantitative analysis reveals that on the one hand, when the real GDP of Lao PDR increases, the country's trades balance decreases. On the other hand, when the real GDP of trading partner trading partners increase, Lao's trade balance could actually increase.

Moreover, the analysis of impacts of the increase in the real exchange rate shows that countries respond to this phenomenon differently: whereas the J-curve phenomenon is observed in the trade balance between Laos and Thailand, it is not the case for the trade balances between this country and China, and Vietnam.

Written by Mekong Institute

This study addresses the problem of Muslim women, who become single heads of households when their male breadwinners are absent. A gender perspective will be applied in order to analyze Muslim women's role and status in society. Muslim women acting as single heads of households simply go against traditionally inherited gender norms of Muslim women, as they are expected to perform the roles of an obedient daughter, dutiful wife and good mother who serve as role models for their children. However, the sudden change of the roles of Muslim women affects their ways of life, as can be witnessed in this study.

The main objectives of this study are 1) to examine the roles of Muslim women as breadwinners of the families with regards to securing their families' livelihoods; 2) to explore the constraints of achieving this objective; and 3) to closely examine the changing roles of Muslim women in securing their livelihoods. As will be demonstrated in this study, at present the family and social roles of Muslim women, who have been affected by political violence, are changing. The main sources of family incomes are now generated by women as breadwinners. One of the major findings of this report is that, despite being satisfied with their personal life and the economic situation of their families, the women continued to struggle hard to secure their own and their families' livelihoods.

The arguments developed in this study are based on primary data collection. The study field is Pattani province in Southern Thailand and testimonies were given by Muslim women, acting as family breadwinners and who have been affected by the violent conflicts in Southern Thailand. In this particular geographical area, we interviewed many widows and other women whose husbands have been detained in prison for alleged involvements in violent activities. Suggestions will be given at the end of the paper as to how to alleviate the problems Muslim women face associated with violence in Southern Thailand.

Keywords: Gender, Livelihoods, Muslim women as breadwinners, Single head of household, violence in Southern Thailand, political conflicts, Pattani Province, Thailand.

Written by Mekong Institute

Previous literature has noted the underperformance of women-led firms relative to male-led ones in both developed and developing countries. Using Thailand as a case study of a developing country, this paper investigates the impact of female CEOs on performance and development among Thai firms. Surveys of 1,043 firms generated data used to analyze how female leadership could have impacts on firm performance and development.

The results suggest that female CEOs have negative impacts on both short-term financial performance indicators, including annual sales and profits, and long-term development of firms, for which new products and the introduction of new technology and provision of employee training were used as proxies. However, this negative association is found to have diminished in the case of female CEOs who completed a degree. With regard to firms' long-term development, including innovation and employee training, female CEOs are found to have a negative impact on firm innovation (introducing new products and technology).

Written by Mekong Institute

This study examined household saving patterns, its determinants and contribution to the development of rural livelihood in Luang Prabang province. The data of 312 households was collected by structured questionnaires and interviews in 2013 by adopting a simple random technique. Using descriptive statistics, OLS regression and the Likert rating scale, the results show that the majority of rural households tend to save more in forms of cash at home and village savings group than other patterns. Many factors were also found to influence rural household savings. Males and non-farm household heads significantly rise household saving, whereas, household size significantly reduces savings level of households. The study supports the existence of the life cycle hypothesis in savings pattern. Moreover, household saving was found to contribute to the improvement of health status, and agriculture production investment, but is less important to children education and agricultural modernization.

Written by Mekong Institute

Foreign Direct investment (FDI) is considered to be significant capital sources to support social economic development in Laos, and it becomes a crucial factor to stimulate an economic growth. The aim of this research is to access the impact of FDI for both aggregate and disaggregate levels and some macroeconomic variables on real economic growth. The multiple linear regression is applied to estimate the significant factors influence on economic growth, during the period from 1990-2011. Last two decades Lao government has highly attempted to improve Investment law in order to attract large amount FDI inflows to Laos.

As evidenced by allowing 100% foreign ownership of investment in 1988, it followed by extending of investment concession from 20 years in 1999 to 99 years in 2009, establishing the special economic zones, granting import duties free and income taxes exemption, which depends on promoting zones and investment areas. As a consequence cause FDI inflows to Laos has rapidly increased from US$ 58.54 million in 1991 to US$ 1.16 billion in 2011, the FDI inflows to Laos is dominated by hydropower and mining sectors, which accounted for 70% of total FDI during the period 2006-2011. While major sources of foreign investors are from China, Vietnam and Thailand, the three countries covered for 78.26% of the total FDI in during period 2001-2011.

The findings suggest that FDI inflows in manufacturing sector have played a crucial role to support economic growth. Then, the higher real trade openness and labor force are important components to stimulate economic growth. In addition, we also find that a booming of FDI inflows in mining sector can lead to the issues of Dutch disease. Real exchange rate might be makes domestic production costs increase and lead to a slowly economic growth.

Written by Mekong Institute

This study examined the effect of trade liberalization on Myanmar foreign trade with selected Asian countries namely Singapore, Thailand and China from 1989-2010. The paper also analyzed trends of foreign trade volume between its major trade partners and the effect of trade liberalization on trade flow with ASEAN Member States (AMS), particularly Singapore and Thailand.

The main objectives of this research are to study the status of Myanmar Foreign Trade after joining ASEAN and to analyze the effect of trade liberalization on Myanmar Foreign Trade. The impact of trade liberalization can be seen as significant and vital to overall exports and imports. Myanmar export/import and volume of trade have increased year by year due to the government practicing a market-oriented system since 1988 and is encouraging the development of the private sector. The government is facing a trade surplus after 2001 due to allowing imports and high export earnings. The government is attempting to uplift participation of the private sector by reducing trade by the government sector. The trade sector which has been liberalized has been performing very well in both exports and imports

Written by Mekong Institute

This research analyzes the status and relationship of financial development, trade openness and economic growth by the ARDL approach of the Cambodia-Laos-Vietnam Development Triangle area or CLV. This group of countries has developed a finance sector and opened trade within the same period between the second half of the 1980s and the first half of 1990s. This period of time has seen a changed system from central economic planning to a marketoriented economy system open to more trade and investments compared to the past.

This change has lead to higher economic growth in the CLV countries compared to other member countries in ASEAN. CLV also has comparative advantages in attracting more foreign direct investments in the agriculture and industry sectors. Currently, the number of banks and financial institutions of each country have increased in terms of quality and quantity and play an important service role in the financial sector in the economy of the countries.

The ratio between the money supply as a component of GDP is rising and the volume of trade in each country tends to also increase in spite of the effects of the global financial crisis. However, the increase of such a level of financial development and trade openness is still not having a positively affect with regards to economic growth with the exception of some countries. For examples, in Cambodia, the long term financial development has an effect on real income per capita. However, in Laos, the openness of trade has a relationship with real income per capita or the growth of economy in both short and long terms. The reason for this is that fundamental and economic structures in each country are different.

Written by Mekong Institute

The Mandarin orange (Citrus reticulata Blanco) is one commercially important species of citrus and a potential important agriculture commodity that may drive rural economic growth in Myanmar. The objectives of the study are (1) to develop a mandarin value chain map, (2) to identify the major stakeholders in the mandarin value chain and (3) to determine the problems, constraints, strengths and weakness faced by marketing participants at each level of the value chain for mandarin oranges. The research questions are (1) What is the value chain of mandarin in Myanmar? (2) Who are the major stakeholders in the mandarin value chain? and (3) what are the problems/constraints faced by various stakeholders within the value chain of mandarin? The qualitative method was applied by using in-depth interviews and semi-structure interviews to collect the primary data, while the quantitative method was used to estimate the cost and margin, and profits of actors at each level of the value chain.Marketing margin analysis and SWOT analysis were used in this study.

It was found that there were many actors in the mandarin value chain such as input providers, growers and wholesalers. The major constraints for mandarin growers are diseases, insects, lack of technical knowledge, and high price of inputs, lack of market information, unorganized marketing and high transportation costs. The major constraint for wholesalers was low access to financial possibilities. Therefore, financial constraints need to be simultaneously solved at all levels of the value chain. The study showed that mandarin farming is a profitable and potential business in the study area. It can conclude that there is an immense need for facilitators (NGOs and other agencies) to increase productivity, improve the quality of the production system and marketing through the cooperative society for efficient marketing.