This study is a novel approach to assessing the impact of forestry policies and to help devise plantation development policies. While economic models to assess impact already exist, before this research there had been no assessment of the effectiveness of these models. In this sense, it is a contribution to forestry as a science.
The most interesting finding was that the policy we were reviewing had very little impact, because the contribution, in terms of value creation, of forestry to the Lao economy is really small. The forestry sector accounts for a really small part of the economy, and as such, previous policies had very little impact.
What this means is that there is a lot of potential to increase the value that the sector creates for the economy. The government can do so by incorporating different sub-sectors, adding economic agents to the sector, support smallholders, improve the vocational training provided to them and foster technological innovation (like laminate technologies for instance). This can be done in order to help economic actors in the forestry sector compete with Thailand and Vietnam, from whom Laos imports most of its forestry resources.
This research tested for the global and individual impact of forestry policies in Laos. Input/Output, CG and micro simulation models were used on data provided by the Asian Development Bank.
The data didn’t include the plantation sector, which is an important sub-sector of the forestry sector. Also, due to a lack of data availability, some values were borrowed from Thailand and Vietnam.
|An input-output table and a social accounting matrix||An input-output table and a social accounting matrix provide an important database and data framework in CGE modelling.|
|CG modelling||CG models test similar things to Input/Output models, but they are more advanced.|
|Micro simulation modelling||Micro simulation models test for policy effects on individuals. To assess interactions between the macro-economy and micro-economic effects, a macro-micro economic framework was developed by connecting the dynamic Lao CGE model to a microsimulation model (LaoDCGE-MSM model). This technique enables us to assess the plantation impact at the household level or to examine the impact on poverty and inequality.|
Phimmavong, S., Keenan, J. R. (2020). Forest plantation development, poverty, and inequality in Laos: A dynamic CGE microsimulation analysis. Forest Policy and Economics, 111.