Artisanal, Small-scale and Large-scale Mining in Lao PDR ; ISEAS Perspective ; Issue: 2021 No. 44
Attracting foreign direct investment (FDI) into its resource sectors has been integral to the Lao government's goal to leave the ranks of "Least Developed Countries" (Menon and Warr 2013). Having sustained average growth at more than 6% until the pandemic kicked in – with foreign grants and loans accounting for more than 20% of GDP – its socioeconomic development has been largely based on the extraction and export of the country's rich natural resources. The state generates revenue through the export of hydropower, minerals, timber, and cash crops such as rubber and bananas. The mining sector, for instance, constitutes an estimated 20% of merchandise exports (World Bank 2020: 17). However, the social and environmental costs of resource extraction constitute a key challenge to sustainable economic growth. This is particularly true for the Lao mining sector. As elsewhere in the world, extractive practices shape physical and social landscapes, altering local economies and human environment relations. In Laos, the important large-scale mining (LSM) areas are located in upland regions inhabited by peoples whose occupations are traditionally based on agriculture and forest products – livelihoods that are particularly vulnerable to the environmental impact of mining. Artisanal and small-scale mining (ASM), while providing local income opportunities, sometimes contribute to land degradation and pollution, which in turn negatively affect these communities' livelihoods (farming, fishing and livestock). Resource governance is thus a major concern for Lao state authorities. However, lack of human and financial capacities, as well as institutional disconnect and internal struggles, hamper effective control of extractive industries, especially in Laos' rapidly changing mining sector. This article gives an overview of Lao mining and discusses the social and environmental impacts of both ASM and LSM activities, with a particular focus on legal issues and local livelihood challenges.