Policy options deal with resources booms in Lao PDR
Date
2015
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National University of Laos
Abstract
Resource booms can result in overvaluation of the national currency, an effect commonly referred to as Dutch disease. Laos is a resource-rich economy in terms of mining and hydropower, but the government has not formed relevant policy to deal with this issue. Studies show that resource-rich countries can suffer from slow growth compared with resource‐poor countries often due to effects of Dutch disease, conflicts, and rent seeking. This brief investigates and considers policy options: diversification of the economy; management of fiscal and monetary policy; balancing the budget; reduction of external borrowing; rapid repayment of debt; and setting up funds for future expenditure.
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Policy Brief
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Keywords
ECONOMIC GROWTH, FISCAL POLICY, RESOURCES EXPLOITATION, HYDROELECTRIC POWER, MINERAL RESOURCES, NATURAL RESOURCE CURSE, FOREIGN INVESTMENT, RENT THEORY, RIGHT TO NATURAL RESOURCES CONTROL, CHILE, BOTSWANA, GOVERNANCE, DIVERSIFICATION, MONETARY POLICY