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Copyright and Use of This Thesis This Thesis Must Be Used in Accordance with the Provisions of the Copyright Act 1968 COPYRIGHT AND USE OF THIS THESIS This thesis must be used in accordance with the provisions of the Copyright Act 1968. Reproduction of material protected by copyright may be an infringement of copyright and copyright owners may be entitled to take legal action against persons who infringe their copyright. Section 51 (2) of the Copyright Act permits an authorized officer of a university library or archives to provide a copy (by communication or otherwise) of an unpublished thesis kept in the library or archives, to a person who satisfies the authorized officer that he or she requires the reproduction for the purposes of research or study. The Copyright Act grants the creator of a work a number of moral rights, specifically the right of attribution, the right against false attribution and the right of integrity. You may infringe the author’s moral rights if you: - fail to acknowledge the author of this thesis if you quote sections from the work - attribute this thesis to another author - subject this thesis to derogatory treatment which may prejudice the author’s reputation For further information contact the University’s Director of Copyright Services sydney.edu.au/copyright Private Investment in the Resources Sector and the Poverty- Environment Nexus (PEN) in Laos Oulavanh Keovilignavong A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy School of Geosciences Faculty of Science University of Sydney 2013 To my father, Khansaly Keoviliyavong Abstract Poverty-environment discourse first emerged in the 1980s when developing countries’ environmental problems first gained world attention. Latterly, the discourse has been referred to as the poverty-environment nexus (PEN). But, the discourse surrounding PEN had its roots in much older debate. Today, in the 21st century, the majority of the developing countries’ rural poor rely on natural resources for their survival. But, changes in their resources, either through natural disasters, private investment (often in the form of mining, energy or plantation projects), or their own exploitative activities, are leading to environmental degradation which, by extension, can force the rural poor into even deeper poverty. Many studies have shown that rapid increase in private investment exploits natural resources. Resultant income diversification to non- agricultural practices may result in either harmful or beneficial environmental impacts. In Laos, private investment has, in some cases, contributed to a degree of poverty reduction and some local livelihood improvement. In others, local villagers, especially the rural poor, have become victims of private investment. This thesis seeks to determine the relationships between investment, resources, poverty and PEN. Particular focus is upon both the negative impacts (the vicious circle) and the positive impacts (the virtuous circle) of PEN. The thesis makes a methodological contribution through its design and application of a multi- scale research approach. Private investment shows a mixed pattern and uneven distribution. A Geographically Weighted Regression (GWR) technique predicts that additional investment could either reduce or increase poverty and deforestation rates in different regions. The livelihood asset pentagons employed suggested that private investment contributes to poverty reduction and local livelihood improvements. But, local resources continue to be exploited by both the local villagers and the investors. Semi-structured interviews undertaken with local authorities reveal that they recognise both the positive and negative impacts of investment on local resources and livelihoods. But, in the course of their investment management, they confront many challenges and limitations. Due to the volume of investment, and to their low management and decision-making skills, they encounter difficulty resolving these issues. Few among them recognise the relationship between the investment impacts and the complex issues of PEN. In policy terms, the findings suggest the importance of considering issues related to PEN when formulating investment policy for sustainable development. The study strongly suggests that a more practical and realistic decentralised approach is needed to ensure that in countries like Laos, private investment supports economic growth and poverty reduction. Investment should be appropriate to local conditions so that investments may be effectively managed and issues related to PEN optimised. i Acknowledgements First of all, I would like to express my deep thanks to my supervisor, Professor Philip Hirsch, for his encouragement and support and the guidelines he demonstrated with endless patience from the beginning to the end of my thesis. Without his critical comments, I would not have been able to shape the ideas of my research topic and complete it on time. I would also like to thank Dr. Peter Messerli, the Director of CDE1, who helped me to develop my ideas regarding my research topic and for the kind support he offered before I commenced my PhD study; also, Dr. Estelle Dryland, Macquarie University, for her keen editing and proofreading of my thesis. This PhD thesis would not have been possible without the full financial support provided by the Australian Agency for International Development (AusAID); thus, I would like to express my sincere gratitude to the government and people of Australia for providing educational opportunities to me and to other Laotians. I have undertaken my thesis at the School of Geosciences, the University of Sydney, where I have gained new dynamic knowledge, skills and ways of thinking from many academic people at this school. Among them, I sincerely want to thank the Mekong Research Group (AMRC) team, Dr Yayoi Lagerqvist, Dr Robert Fisher and Natalia Scurrah for their valued encouragement, and my many academic friends including Paula Brown, Nathaniel Butterworth, Phalla Chem, Olivia Dun, Kim Sean Somatra, Nguyen Tuong Huy, Surin Onprom, Rafiuddin Palinrungi, Lada Phadungkiati, Soimart Rungmanee, Ken Serey Rotha, Mattijs Smits, Worawan Sukraroek, Tubtim Tubtim, Nathan Wales, Liping Yan and Zoe Wang for their dynamic discussions and their sharing of knowledge through various seminars and presentations. Special thanks to Trina Isorena for her kind help in creating maps using ArcGIS software, and to the School staff, Sue Taylor, Nikki Montenegro and Jessica McLean for the administrative assistance they so readily offered when I needed it. My thesis employed three different levels of data sources. I am deeply grateful to all of the organisations and people who contributed their information and time during the course of my data collection. At the central level, I want to sincerely thank the Ministry of Education for issuing an official letter of authorisation for my fieldwork, also the Ministry of Planning and Investment, the Ministry of Agriculture and Forestry, the Ministry of Industry and Commerce, the Ministry of Energy and Mining, the Lao National Tourism Administration and the National Land Management Authority for providing secondary investment data. At the local 1 Centre for Development and Environment, University of Bern, Switzerland. ii level, special thanks to all of my interviewees from Pek, Houayxay and Bachiang districts and from Xieng Khouang, Bokeo and Champasack provinces for sharing with me their experiences of investment management. More importantly, I am deeply indebted to the people in the six villages of Ban Khou, Ban Nonghen, Ban Hoa, Ban Nadi, Ban Latgnong and Ban Houaysang for their hospitality, time and active participation during my in-depth household interviews. I would like to thank my parents, sisters, relatives and cousins for their enduring encouragement and their unfailing support for my life and study. Last but not least, I would like thank my wife, Sengmala Boungnasouk, my son, Ketsana and my daughter, Phetjinda Keovilignavong, who frequently give me warm love, encouragement and support, especially when I am at my weakest. My sincere thanks to all of the people who contributed to my thesis whom I may have not mentioned here. Thank you all. iii Table of Contents Abstract ........................................................................................................................................ i Acknowledgements .................................................................................................................... ii Table of Contents ...................................................................................................................... iv List of Figures ............................................................................................................................ vi List of Tables ........................................................................................................................... viii Acronyms .................................................................................................................................. ix Provincial and administration division map in 2007 of Laos ..................................................... x Chapter 1: Introduction to the thesis .......................................................................................... 1 1.1 Introduction to Chapter 1 ................................................................................................ 1 1.2 Background of Laos ........................................................................................................ 1 1.3 Poverty issues in
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