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Dutch disease in the Lao economy: Diagnosis and treatment

Author

Listed:
  • Sthabandith Insisienmay

    (Macroeconomic Research Division, National Economic Research Institute, the Lao PDR)

  • Vanthana Nolintha

    (Macroeconomic Research Division, National Economic Research Institute, the Lao PDR)

  • Innwon Park

    (Division of International Studies, Korea University, Korea)

Abstract

Searching for evidence of Dutch disease in the Lao economy, we do find some of its symptoms, though they are not very strong. Accordingly, we propose some policy options to mitigate its effects and ensure the sustainable development of the Lao economy: (a) invest the revenues from the booming resource-intensive exports, foreign direct investment and official development assistance in infrastructure and education; (b) reduce import barriers against capital and equipment imports; (c) establish a natural resource fund and a foreign exchange equalisation fund; (d) actively participate in regional trade agreements for advanced technologies and domestic reform; (e) establish a comprehensive bank for efficient trade and investment activities. Above all, we strongly suggest public sector reform to increase transparency in governance.

Suggested Citation

  • Sthabandith Insisienmay & Vanthana Nolintha & Innwon Park, 2015. "Dutch disease in the Lao economy: Diagnosis and treatment," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 18(4), pages 403-423, December.
    • Handle: RePEc:sae:intare:v:18:y:2015:i:4:p:403-423
    DOI: 10.1177/2233865915595155
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    References listed on IDEAS

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    1. Taguchi, Hiroyuki, 2018. "Analysis of the “Dutch Disease” effect and public financial management: the case of Mongolia," MPRA Paper 86561, University Library of Munich, Germany.
    2. Taguchi, Hiroyuki & Soukvisan, Khinsamone, 2017. "Analysis of the “Dutch Disease” effect: The case of resource-rich ASEAN economies," MPRA Paper 81010, University Library of Munich, Germany.

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