BRI and SDGs progress in Lao PDR (Work in Progress) - United Nations ESCAP
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BRI and SDGs progress in Lao PDR
(Work in Progress)
Vanxay Sayavong
Researcher, National Institute for Economic Research (NIER)
National consultant, UN Department of Economics and Social Affairs
At Workshop on Assessing the Potential Impact of the Belt and Road Initiative on
sustainable Development Goals in Asian Economies. Organizers: UN DESA
And UN ESCAP
25-27 September 2019, Bangkok, Thailand
1
Background
Pakistan Nepal
25.2%
Bhutan China • Many development indicators: poor in ASEAN
24.3% 8.2% 3.1%
Bangladesh National Poverty
India 24.3%
32.1% 5.8% • Long-term goals to upgrade Income Status.
21.9%
22.7%
• Low-middle-income to upper-middle income by
7.9% 2030 (Lao PDR)
14% 21.6%
• Implemention of Sustainable Development
Goals (SDGs) is challenging
Sri Lanka
4.1%
Natural disasters 0.4% • Belt and Road Initiative (BRI) as the
alternative resource for development but
9.8% currently not well understood
Inequality • BRI may entail trade-offs between short-
term and long-term costs and gains within
various economic sectors and social groups.
• Its impact especially on SDGs. 2
Selected projects under BRI Cooperation in Lao PDR
Laos-China railway project
Beautiful Boten Special Economic Zone (Lao side-
Total Investment 5.9 billion USD or 35% of under construction) in Mohan-Boten Economic
GDP Cooperation Zone
Timeline 2016-2021
Construction Distance 414 km,
Speed mountain: 160 km/h,
flatland: 200 km/h,
freight: 120 km/h
Stations 32 stations
Travel time 10 hours (currently 24+by
(kunming to road)
Vientiane)
Model of Vientiane Saysettha Development Zone
Progress: 74.8% complete (July 2019)
Source: edited from Boten Economic Zone Office and google search
Potential Impact of Lao-China railway
• During construction:
• Domestic value added: 174-290 million USD per Contribution to GDP Growth (%)
year 8.0% 7.0% 6.9% 6.8%
• Contribute to GDP growth: 0.4-1.0% per year. 7.0% 6.3% 6.5%
• Construction materials are almost imported. 6.0%
1.8%
5.0% 1.9%
• Spill-over effects: Cement, electricity and others. 2.7% 2.9%
0.9% 2.8%
4.0%
• Employment: 28,234 workers (July 2019).
3.0% 1.0% 0.4%
• Provide training to workers 2.0% 2.6% 2.9%
1.0% 1.3% 1.2% 1.5%
• After the complete of construction: 0.0% -0.1%
• Lao export to China up 60% but more imports -1.0% 2016 2017 2018 2019_P 2020_P
• Increase of passengers via railway: Agriculture Mining & Quarrying Electricity
Manufacturing Construction Lao-China Railway
• 380,000-1,150,000 Chinese tourists
Services Net tax GDP
• Domestic passengers expected to pick up
• Transport, logistic and other services follow Source: Lao Statistics Bureau (LSB) but the projection for 2019
• Employment: around 6,180 employees for railway and 2020 is from the author
operation
• Education: the establishment of railway college/university
In Local Communities: During Construction
• Health
• Estimated 400 sex workers
(HIV/AIDS or other
transmission diseases)
• Limited local employment
due to barrier of language
• 23,471 foreign workers • Compensation and resettlement
• 4,763 local workers • To 4,000 local households at 167
villages in 13 districts within 4
provinces
Source of Photo: google search and a photo taken by the author
Sustainable Development Goals (SDGs) in Lao PDR
SDGs - No One Left Behind Pushing BRI towards SDGs in Laos: the case of railway project
Poor Performance Opportunity Risk
Goal 1: No poverty Yes Yes
Goal 2: Zero hunger
Goal 5: Achieving gender equality
Goal 7: Ensuring access to the affordable and clear energy Yes
Goal 9: Industry, innovation and infrastructure Yes
Goal 10: Reduced inequalities Yes Yes
Good Performance Opportunity Risk
Goal 3: Ensuring good health and well-being Yes
Goal 11: Sustainable cities and communities Yes
Goal 12: Responsible consumption and production Yes Yes
Source: The initial assessment by the author based on information from
the report by ADB (2018, pp. 30–65) and author’s assessment
6
Sustainable Development Goals (SDGs) in Laos
National SDG Goal 18: Lives Safe from Unexploded Ordnance (UXO)
• About 459 UXO booms and related 463.536 pieces in
2,931 ha had been cultivated during the construction of
Lao-China railway during January 2017-July 2019
• But 80 million bombs remain unexploded and many
people who lives in the outside of investment areas
under BRI
Expected area of
railway construction
7
Source: edited from google search
Chinese Official Development Assistance (ODA)
Chinese grant of 6.57 billion Yuan or Goal 17: Global Partnership
950 million USD (6.2% of GDP in
• Indicator 17.9.1: financial and technical assistance to
2017) for more than 1,100 projects developing countries
• 46 million USD on average during 2000-2008 to 74.5 million USD annually
during 2009-2016
Capacity Building, 5% • Indicator of 17.19.1: value of all resources made available to
strengthen statistical capacity in developing countries (current
USD)
Technology and Education and
Science, 9% related, 21%
Health and
sanitation, 12%
Infrastructure, 47%
Agricultur
e, 8%
Source: Author summarizes the announcement letter from Lao prime minister’s office 2018
Source: Photo taken by the author
Conclusion
• Rapidly increase of activities (opportunities and challenges) under
BRI cooperation, the domestic capacity both public and private
sectors? Transparency, accountability and efficiency.
• To maximize the opportunity and minimize the risk on SDGs
particularly at the local communities.
• Requires strong political will
• Requires strong participation of local communities.
• Requires the intervention programs on health and
environment at the local community
• Requires the social and environmental responsibility from
firms
• Designing BRI towards SDGs and other national long term goals by
2030
• Especially the SDGs with poor performance and Goal 18 life
save from UXOs
Source of Photo: google search
Vientiane, Lao PDR Bangkok, Thailand
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