A rise in the Gross Domestic Product does not always indicate an improvement in living standards, according to a Professor from ColumbiaUniversity. Prof Joseph Stiglitz, winner of the Nobel Prize in Economics, was speaking at a presentation on the Development Implications of Natural Resource Based Growth, in Vientiane yesterday to members of the Lao government and other high-ranking officials. He used the example of the United States, where GDP had recently increased but average incomes had actually fallen. Laos has approved a raft of resource-based investment projects, mainly in mining and hydropower, and some concerns have been raised over issues of natural resource management and income generation. The professor suggested that the country focus on better management of these resources and seek ways to maximise revenue from them. “If you want to maximise revenue, you need to be transparent,” he said. Prof Stiglitz agreed that the media had an important role to play in country development as freedom of information could weaken the growth of corruption and force better development. “If you manage the economy well, you will get richer; if not, you will stay poor,” he said. Minister for Planning and Investment, Mr Soulivong Daravong, admitted that the most daunting challenges for Laos were to generate local employment and income, reduce widespread poverty, ensure food security and increase budget revenue. In his lecture, the professor said current global economic growth and the commodity price boom was driven by China, India and other emerging economies, with the heavy involvement of multi-national companies; resource-rich countries were gaining popularity with energy and mining companies, presenting both opportunities and risks. Prof Stiglitz said effective investment in human development and infrastructure would lead to sustainable socio-economic development once these resources are depleted. Transforming natural resource wealth into human resource wealth in countries with weak human resources should be a priority, he said. He commented that the risks and challenges for resource-rich developing countries included a tendency to perform more poorly in many areas than resource-poor countries. “Economic growth in resource-rich countries is 30 to 50 percent lower than in resource-poor countries,” he said. Prof Stiglitz said that lessons learned from international experiences included sudden surges in foreign currency revenues and consumption expenditures, or poorly selected investments, along with a lack of financial transparency and weak financial governance. Development experience indicated that virtually all success stories of developing countries were based on the foundation of broad-based literacy and education, he said. “Infrastructure and extension services are also critical to the rural private sector, given that most people in developing countries live and work in rural areas,” he said.
Interesting. Maybe that is why Singapore rich, myanmar poor. Myanmar have many natural resources, Singapore nothing. Maybe build dam, open mine for copper bad idea. Better to think smart. Go to school, follow law, freedom of press to stamp out corruption.
Transparency ? corruption ? what are you talking about ? Laos has no case of indictment because of corruption among the government officials. The Prof. from Columbia swan song - transparency, freedom of information, better management etc... is highly unlikely to be popular among those attending high ranking officials...ເພາະມັນແທງໃຈດຳ...that's a slap on their face, sir.
