Natural resource extraction and household welfare in rural Laos

Abstract

Degradation of natural resources is a threat to sustainable development in many developing countries. Solving this requires an understanding of the factors affecting the extraction of and the dependence on the resources as well as the impacts on rural welfare. In this study, we identify the factors affecting the extraction of and the dependence on forest and water resources and examine the impacts of the extraction on rural household welfare in Laos. We address our research questions with an econometric framework that models the extraction and its implications simultaneously. We use the data of 430 rural households from a survey undertaken in 2013 in 38 villages of Savannakhet Province. Our findings show that extracting forest and water resources is a shock-coping strategy of rural households but contributes to reducing household income inequality. For extracting households, the extraction increases household income, consumption, and food security. However, for nonextracting households, although participating in the extraction would increase food security, it would reduce their income and consumption. We suggest that promoting rural education and off-farm employment opportunities and enhancing investments in physical infrastructures would reduce the extraction of and the dependence on the resources of extractors and prevent nonextractors from being forced to extract the resources.

Exploring the Determinants of Food Security in the Areas of the Nam Theun2 Hydropower Project in Khammuan, Laos

“…As found by [4] our results show that the probability of households being food secure decreases with increasing shock. This association was expected because of shock/illness of a household member, a member leaving the household, accidents, crop pests, and disease, which all have the affect of price increase-results in the expenditures of the households to address the shocks, such as for medicine or hospital bills, and decreased yields.…”

“…Laos is located in the Mekong river basin in Southeast Asia with abundant water and forest resources [4]. Shifting cultivation is one of the most important livelihoods in terms of food security [19].…”

“…Although much progress has been made to reduce the global undernourishment evidenced by a decline, between 1992 and 2016 from 23% to 13%, of the world's undernourished population, food security is among the greatest challenges humanity faces and continues to face in upcoming years [1]. From 2010 to 2012, about 870 million (12.5%) of the world's population were experiencing chronic hunger [2] especially in sub-Saharan Africa and southeast Asia [3], with most living in remote areas of developing countries which primarily depend on water and forest resources [4]. In parallel, these geographical regions are also expected to register the fastest population growth in the near future [5] which may compromise the desired scenarios.…”

“…There are some studies that have been done on food security in Laos [10][11][12], but they are either for the whole of Laos or for a specific province i.e., for Xekong and Savannakhet [4,13]. Besides the survey data, some studies also utilized secondary data to conduct studies on food security [14].…”

“…The household size was one significant factor found that had a negative correlation with the household food security status. In addition, [4] conducted a study in Savannakhet and found that the factors influencing household food security were shock, gender of the head-of-household, and farmland area.…”