Agriculture, tourism key to Laos’ prosperity: ADB

Raising competitiveness and strengthening the links between agriculture and tourism will contribute to post-Covid 19 recovery and inclusive growth in Laos, according to a report by the Asian Development Bank (ADB) unveiled on Friday. 
The report, “Developing Agriculture and Tourism for Inclusive Growth in Laos”, examines how higher agricultural productivity and new markets for tourism can help reduce poverty rates.
Agriculture employs 60 percent of the workforce in Laos. Meanwhile, about 42,000 people, 62 percent of whom are women, were employed in tourism before the pandemic hit.

“The Lao PDR’s natural resource endowments have supported strong economic performance over the last three decades, but the country’s economic and job growth rates have not kept pace,” said ADB Country Director for Laos, Sonomi Tanaka.
“Growth that generates sustainable and shared prosperity requires greater focus on the quality and quantity of jobs. Leveraging linkages between agriculture and tourism industries offers opportunities to build new and better livelihoods for a more resilient and inclusive recovery from the pandemic.”
Speaking at the launch of the report in Vientiane, Deputy Minister of Planning and Investment, Mrs Phonevanh Outhavong, said “Creating quality and productive jobs is among the top priorities of the government’s policy agenda.”
“It has now become even more important not only for recovery from the economic fallout due to the pandemic, but also for building forward better. Putting agriculture and tourism industries at the heart of our recovery, along with strategies to strengthen sectoral synergies, offers an opportunity to kick-start a greener, more resilient economic recovery.”
The report found that, in 2019, tourism in Laos supported growth in livestock and fisheries. A significant share of tourism businesses also purchased and advertised organic vegetables. Tourism businesses could be a part of new agricultural value chains, especially for vegetables and livestock.
Tourism was growing fast before the pandemic. International tourist arrivals reached 4.1 million in 2018, contributing 12 percent of the country’s GDP.
However, average spending per international tourist was less than US$200, the lowest in Southeast Asia, pointing to a need to upgrade tourism infrastructure.
Travel disruption during the pandemic has forced half of the 360 tourism businesses that were surveyed to temporarily close, with 70 percent of workers furloughed, according to the report.
An immediate response is needed to shore up the tourism sector. This can include providing financial assistance to tourism businesses, speeding up Covid-19 vaccinations, and enabling a responsible reopening of travel through transparent, effective, and clear communication of health and safety protocols.
In the longer term, the report recommends investing in agriculture and tourism, inclusive of interlinking industries such as transportation, irrigation, urban services, and digital connectivity infrastructure.
Developing human capital to ensure high-quality services, expanding visa exemptions, and promoting organic food production and certification are also among the policy recommendations to increase competitiveness.