According to a recent report by the Asian Development Bank, the agriculture and tourism sectors have enormous potential to support inclusive growth in Laos in the medium and long term.
According to the report, “Developing Agriculture and Tourism for Inclusive Growth in Laos,” it is vital to strengthen the links between these two sectors in order to help the country’s economy recover after the pandemic.
According to the paper, agriculture and tourism both create jobs in rural regions and can help each other in two ways.
The first is tourism-related enterprises’ demand for high-quality agricultural products, which can be supplied by local farmers.
The second is that tourism has the potential to develop jobs outside of agriculture, hence increasing rural households’ off-farm wages.
According to the report, the link between agriculture and tourism can contribute significantly to both agri-tourism and long-term development.
In Laos, agriculture employs 60% of the workforce, whereas tourism employed roughly 42,000 people before the pandemic.
At the basic and expert levels, special attention should be paid to developing managerial and digital abilities.
Furthermore, training programmes should be made more accessible by expanding the number of training centers and encouraging approaches like on-the-job training.
The ADB report emphasized the necessity of modernizing agriculture for economic growth and poverty reduction, claiming that agricultural research, development, and extension have shown to be one of the most profitable parts of public investment.
Modernization, on the other hand, will necessitate research into adapting high-yielding crop types to local conditions and assuring the availability of complementary modern inputs.
Laos’ economy has grown at an annual rate of 7% on average during the last three decades. However, this expansion was overly reliant on the capital-intensive utilization of rich natural resources, resulting in a scarcity of work possibilities.
A more productive agriculture sector and new opportunities through tourism will help reduce poverty and create inclusive growth in Laos, where the majority of the poor still rely on rural agriculture for their livelihoods.
Prior to the pandemic, tourism was booming. In 2018, international visitor arrivals were 4.1 million, accounting for 12% of the country’s GDP.
However, the ongoing pandemic is having a significant impact on this industry. According to the ADB survey for 2020, 50% of tourism businesses are currently shuttered.
Nonetheless, experts predict that once the pandemic has passed, international tourism will become even more competitive as more people wait to travel.
According to the report, Laos should broaden visa exemption policies to nations with significant outbound tourism expenditure in order to attract higher-spending visitors.