Lao PDR’s resource-based economy is driven by forestry, agriculture, hydropower and minerals. Together, these sectors account for more than half of Lao PDR’s total wealth. Lao PDR will need to diversify its economy and increase environmental sustainability through robust management of its natural resources, including land resources. The country also needs to address climate change mitigation and adaptation, while strengthening its resilience to natural disasters.
From 2005 to 2013, the hydropower and mining sectors combined generated about one third of Laos's economic growth. The natural resources sector has a high ratio of capital to labour, and was able to produce approximately 18 percent of Lao PDR’s gross domestic product (GDP) in 2013 with only 22,000 people.
While Lao PDR is off-track on the national target for forest cover, forest cover has increased since 2011, when it was reported to be 40.3 per cent. Forest cover in 2017 stood at 13.73 million hectares or an estimated 58 per cent of the area of the country. Between 2010 and 2015, deforesation rates were estimated as 0.26 per annum. The main drivers of forest degradation are unsustainable wood harvesting, from illegal logging and poorly regulated harvesting, and shifting cultivation. Deforestation is largely due to agricultural expansion (including rubber and sugar cane plantations), hydropower, mining, infrastructure and urban expansion. Weak enforcement of regulations and the lack of public awareness on environmental issues compound the problem. The loss of forested lands affects in particular poor rural and ethnic communities located in and around forest areas.
Lao PDR aims to achieve 70% forest cover by 2020. The main obstacles for reversing deforestation are unclear procedures for plantation establishment and land allocation, limited financial resources and human capacity, and weak enforcement of laws and policies. Changes in institutional responsibility have delayed afforestation and reforestation.
To address deforestation, the government is promoting community participation, sustainable forest management and payment for ecosystems services. In a promising move, the government is encouraging the private sector to shift to woodprocessing and commercial tree plantations such as eucalyptus, teak, agar wood and rubber.
Lao PDR’s rich biodiversity is facing serious threats from the degradation and disappearance of habitat, poaching and wildlife trade. The government has designated 20 national Protected Areas covering 20 percent of the country as National Protected Areas (also called National Biodiversity Conservation Areas). Additionally, there are two green corridors and various district and province protected areas. Altogether one-fifth of the country’s area is under some degree of protection. Notwithstanding these efforts, more and more species are threatened with extinction (115 in 2010, 210 in 2017).
Conserving forests and other ecosystems is one of 17 Global Goals that make up the 2030 Agenda for Sustainable Development. An integrated approach is crucial for progress across the multiple goals. Learn more about Goal 15 and its targets.