The e-Newsletter of the Gender Network
April 2013 | Vol. 7, No.1
Private Sector Development will Boost WomenEntrepreneurs in Lao PDR
by Mohd Sani Mohd Ismail
An ADB gender inclusive program will help women entrepreneurs achievetheir goalsMacroeconomic background
It is widely recognized that Lao PDR has made considerable progress in itseconomic development. The GDP increased to 7.8% in 2011, from 7.5% in 2010,and is expected to hold steady in 2012, reflecting stable growth. In addition, basedon the national poverty line, the poverty incidence has dropped to an estimated25% from 2003 to 2009, with accelerated reduction post-2004, when per capitaincome surpassed $400.
In 2011, when its GNI per capita exceeded $1,006, LaoPDR was categorized as a lower middle-income economy, as opposed to a lowincome economy.
However, the resource boom, whilst providing the Government with a tremendousopportunity to finance its development goals, increase per capita income andreduce poverty, can also lead to a decline in the competitiveness of the non-resource sector.
The implications for the private sector and small mediumenterprises (SME) sector is clear, as an appreciated kip real exchange rate wouldraise unit labor costs and make them less competitive. The challenges for Lao PDRare to manage the resource boom in a way that sustains growth in the non-resource sector, create productive jobs, and continue with poverty reduction. Giventhat SMEs represent more than 95% of registered enterprises in Lao PDR, and thatmore than half of newly registered enterprises are owned by women
, it is notdifficult to estimate that women may be disproportionately and negatively affectedby a resource boom that is not complemented with appropriate policy reform.ADB has supported the private sector and SME development in Lao PDR since 2006,through program loans and technical assistance. With the resource boom and its
Financial Sector Specialist, Public Management, Financial Sector, and Trade Division (SEPF), Southeast AsiaRegional Department (SERD).
K. Bird and S. Ismail. 2010.
Lao PDR ASR Trade and Industry Sector
. Manila: ADB.
World Bank. “Lao PDR Now a Lower-Middle Income Economy”, World Bank website, accessed 15 April 2013.
ADB. 2011. Report and Recommendation of the President to the Board of Directors: Second Private Sector andSME Development Program. Manila.
SMEs are enterprises with an annual average number of employees not exceeding 99 persons or total assets notexceeding KN 1,200,000,000 or an annual turnover not exceeding KN 1,000,000,000.