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Does ASEAN-Korea FTA Reduce Poverty in Laos? The Roles of FDI and Trade Facilitation

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  • Jeong-Soo OH

Abstract

The objective of this paper is to attempt to quantify the impact of the ASEAN-Korea Free Trade Agreement (AKFTA) on the roles of Foreign Direct Investment (FDI) and the improvement of trade facilitation for the national economy and poverty. The study uses a standard Global Trade Analysis Project (GTAP) model for this analysis. The simulation results show that with consideration to the flow of FDI and the improvement in trade facilitation. Laos has gained significantly from AKFTA. The real GDP, welfare, and household income have increased as well as improvement in Laos’ trade terms and balance. In addition, the income of unskilled labor that affects the poverty level has also increased significantly. Therefore, AKFTA has increased growth and also improved income distribution in Laos.

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  • Jeong-Soo OH, 2014. "Does ASEAN-Korea FTA Reduce Poverty in Laos? The Roles of FDI and Trade Facilitation," Journal of Social and Development Sciences, AMH International, vol. 5(2), pages 50-57.
    • Handle: RePEc:rnd:arjsds:v:5:y:2014:i:2:p:50-57
    DOI: 10.22610/jsds.v5i2.805
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    1. Phouphet Kyophilavong & Xaignasack Lassachack & Thanouxay Volavong, 2016. "Do cash transfers help the poor during trade liberalization? Evidence from Laos," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 19(4), pages 355-371, December.
    2. Phouphet Kyophilavong & Kazunobu Hayakawa, 2024. "Impacts of Trade Liberalization in the Least Developed Countries: Evidence From Lao PDR," The Developing Economies, Institute of Developing Economies, vol. 62(1), pages 45-67, March.

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