Environmental Impacts of Trade Liberalization in the Medicinal Plants and Spices Sector of the Lao PDR

Regional demand for Lao PDR's medicinal plants is rising significantly. And while this is presenting opportunities for economic growth, it is also placing increasing pressure on the country's natural resource base. This paper provides a commentary on some of the key environmental concerns in this sector and presents case studies on the production and use of medicinal plants in Lao PDR to illustrate positive and negative practices in the industry, including suggestions for the future.

Key findings:

• the medicinal plant and spices sector is earmarked as a sector with key export potential due to increasing demand for these products regionally;

• the development of medicinal plants and spices for export can help to generate increased income among farmers, reduce poverty, stimulate entrepreneurship and create a favourable business environment to integrate into the global marketplace;

• while development of this sector can bring many economic benefits, significant expansion requires significant resources and has raised some concerns about the inappropriate and unplanned use of medicinal plants, leading to unsustainable harvesting and ultimately the destruction of the resource base; and

• key issues facing this sector at present, include a lack of systematic and scientific approaches to harvesting, specific plans for cultivation and strict enforcement of laws and regulations, weak collaboration amongst concerned authorities (between central and local authorities and between public and private sectors), and limited awareness among rural people on the preservation of biodiversity.

Key recommendations:

• collaborate with neighbouring countries on the conservation of bordering protected areas and the control of illegal trade in wildlife and prohibited plant species;

• work towards more scientific and community-orientated management of forest resources in order to generate timber and non-timber forest products at sustainable levels;

• improve statistics on resource harvesting and exporting to guide future policy in the sector;

• develop and enforce laws and regulations related to the forestry sector as a whole, and especially to non-timber forest products;

• identify appropriate measures for improving awareness on environmental impacts for rural communities;

• improve the quantity and quality of exported medicinal plants and spices to meet the demands of foreign markets; and

• encourage the private sector to consider the environmental impacts of unsustainable harvesting and unplanned cultivation, and gain their support in addressing these issues by establishing incentives for environmental best practice.