The agriculture and tourism sectors have huge potential to boost inclusive growth in Laos in both the medium and long term, according to a recent report by the Asian Development Bank (ADB).
The report, “Developing Agriculture and Tourism for Inclusive Growth in Laos”, says it is critical to strengthen the linkages between these two sectors to recover the nation’s economy post-pandemic.
Agriculture and tourism provide jobs in rural areas and can support each other in two ways, according to the report.
The first one is the demand for high-quality agricultural products by tourism-related businesses, which can be provided by local farmers.
The second one is the fact that tourism can create employment opportunities outside of agriculture, thus boosting the off-farm earnings of rural households.
The report stated that the link between agriculture and tourism can make a strong contribution to both agri-tourism and sustainable development.
Agriculture employs 60 per cent of the workforce in Laos, while about 42,000 people were employed in tourism before the pandemic hit.
“Laos must continue to strengthen human capital so that workers can innovate, deliver higher-value tourism services, and rebuild public confidence to travel post-Covid-19,” the report said.
Special attention should be given to developing managerial and digital skills at the beginner and expert levels.
In addition, training programmes should be made accessible by increasing the number of training centres and promoting approaches such as on-the-job training.
The ADB report highlighted the importance of modernising agriculture for growth and poverty reduction, saying that investment in agricultural research, development, and extension has proved to be one of the highest-payoff aspects of public investment.
However, modernisation will require research on adapting high-yielding crop varieties to local conditions and ensuring the supply of complementary modern inputs.
Over the past three decades, Laos’ economy grew at an average of seven per cent annually. But this growth depended too much on the capital-intensive use of abundant natural resources, which created limited job opportunities.
As most of the poor in Laos still rely on rural agriculture for their livelihoods, a more productive agriculture sector and new opportunities through tourism can help reduce poverty and achieve inclusive growth.
Tourism was growing fast before the pandemic. International tourist arrivals reached 4.1 million in 2018, contributing 12 per cent of the country’s gross domestic products (GDP).
However, the ongoing pandemic is severely impacting this sector. The ADB survey for 2020 found that half of tourism enterprises were temporarily closed.
Nonetheless, economists say international tourism will become even more competitive once the pandemic subsides because more people are waiting to travel.
To attract higher-spending visitors, Laos should expand visa exemption
policies to countries with high outbound tourism expenditure, the report recommends.
VIENTIANE TIMES/ASIA NEWS NETWORK