The Wealth of Nations

The definition of poverty used in Laos by international agencies and institutions is very much based on a measurement of cash income or gross national product (GNP) that is based on products and cash. It does not emphasise social and environmental capital. International agencies and institutions talk about cash capital and material capital, which is basically what comes from industry not from natural products. So in using that criteria yes, Laos is a “least developed” country and based on this criteria Laos is considered “poor”.

But the poverty here and in other countries is quite different. Poverty here is basically cash poor; social services are poor – education and health care services do not reach many people – that is “poor”. But the natural social capital and the indigenous social capital is quite high. For example, people really care about one another, they help one another and in this sense, I think we are quite wealthy. In terms of the environment, we are lucky that we are not very populated and nature can provide a lot of things that makes us kind of easy-going. This should be seen as a capital, it is our national wealth.

But in the World Bank and the mainstream economic system of measuring poverty, these factors are not considered and Laos is seen as “poor”. From the Western point of view, it is seen as a disadvantage if you are not competing against each other.

Sombath Somphone, in Watershed Vol. 7 No. 2 November 2001 – February 2002