Poverty in Laos

Shifting cultivation area, Nam Ha, Laos © Piet van der Poel

Laos ranks as a low income, highly indebted poor country, centrally managed by a state that has demonstrated a weak capacity for public service delivery and infrastructure development. While the Lao government has ambitiously committed itself to shedding its "least developed country" (LDC) status by 2020, the country remains heavily dependent on assistance from multilateral agencies, together with foreign investment in its natural resources.

The government’s National Socio-Economic Development Plan 2006-2010 contains targets which are consistent with the Millennium Development Goals (MDGs). Whilst there is encouraging progress towards the goal of universal primary education, results for poverty reduction over the MDG period are disappointing and the targets will be further challenged by projections that the population will double in less than 25 years. In 2005, 27% of the population remained below the $1 per day international benchmark for extreme poverty, a considerably higher figure than recorded in the early 1990s. Using the government’s own evaluation of a national poverty line, poverty has fallen from 46% in 1992 to 38% at the most recently available assessment for 2004, an insufficient rate of progress to meet the 2015 target of 24%.
Food Security in Laos

Paddy fields at Nong Khiaw. Laos © Piet van der Poel

The difficulty in converting national economic growth into poverty reduction is explained by the fact that over 80% of the population lives in rural areas working on just 5% of the country’s land that is suitable for farming. Lacking access to credit or economies of scale, many households survive predominantly by subsistence – markets for additional foodstuffs being inaccessible and expensive. Difficulties are especially acute for ethnic minorities in the northern uplands, these groups falling within the Lao Sung and Lao Theung ethnic categories, over 20% of the population cut off geographically and by language from the increasingly dynamic economy of the capital Vientiane and the majority lowland Lao Loum ethnic group.

A report published by the World Food Programme (WFP) in November 2007 concludes that “two thirds of the rural population are either food insecure (13%) or live on the edge of food security” and that “every second child in the rural areas is chronically malnourished”, a proportion unchanged over the last 10 years. The government has responded with a National Nutrition Policy 2008-2020 targeting the locations most in need.

Uxo's at Jar field, Laos © Piet van der Poel

Eschewing reference to the influence of rising world food prices, the WFP report refers instead to the direct correlation between food security in Laos and the tragic legacy of the Vietnamese-American War. Laos is known as the most heavily bombed and mined country in history, with the most severely affected provinces being Savannakhet, Xieng Khouang, Saravane and Khammouane. The scattered unexploded ordnance (UXO), renders about 2/3rds of potentially productive land too treacherous to cultivate, exacerbating the already problematic food security situation. International aid agencies are working to raise awareness of the dangers amongst communities in the target zones while the Lao National UXO program (UXO LAO) is the national government agency responsible for coordinating mine/UXO clearance. Inevitably, progress is desperately slow, especially in the context of farm productivity.
Health in Laos

Kids near Udomxai, Laos © Piet van der Poel

The sense of urgency in developing a National Nutrition Policy stems in part from the realisation that failure to improve chronic malnutrition will impact on child and infant mortality rates which are otherwise falling in line with MDG targets. Over 50% of the deaths of young children in Laos are attributed to malnutrition. Maternal mortality remains very high at over 400 per 100,000 births, nowhere near the MDG target of 160. Given the poorly developed medical infrastructure and inaccessibility of numerous remote communities, the majority of births continue to take place without the assistance of a trained health worker.

In spite of being surrounded by countries with burgeoning HIV/AIDS rates, Laos has experienced low prevalence of around 0.1%. However, fears surround the country's gradual global integration with the risks that migration and increased travel might pose.
Climate Change in Laos

Kuang Xi Waterfall, Laos © Yip Seng Leong

Concerns about malnutrition and food insecurity can only be aggravated by the potential impact of climate change which is regarded as particularly alarming for this region of Southeast Asia. The WFP report lists drought in the north and east, flash floods in the low-lying Mekong River basin, and low yielding crops amongst the existing causes of food insecurity, all of which may be exaggerated by rising temperatures, changing rainfall patterns and more extreme typhoons. Laos is one of few LDC countries not to take advantage of UN funding to publish a National Adaptation Programme of Action which would identify any relatively low cost priorities that might respond to the threat.

Laos is also a key agent in the mitigation side of the climate change equation, having failed so far to act on the MDG objective to “reverse the loss” of tropical forests, instead allowing its extensive coverage to fall from 47% in 1992 to an unverified current figure of about 35%. The combined pressures of commercial interests in logging, copper and gold mining, and wood-pulp plantations have overwhelmed government institutions weakened by corruption. Hopes are pinned on the prospect of Laos participating in a new “avoided deforestation” mechanism agreed at the 2007 Bali climate change conference in which poor countries could be paid compensation for protecting their forests.
The Economy in Laos

Vang Vieng Market, Laos © Yip Seng Leong

In the mid-1980s, the state followed the lead of Vietnam in revamping its socialist economy, undertaking decentralisation and easing regulations on foreign investment. Physical infrastructure remains extremely basic but programmes to reduce the planting of opium have been very successful, with production down by 93% in the period 1998-2005. There are worries however that provision of alternative livelihoods has been insufficient to regard the problem as irreversible.

Sunset at Muang Kasi, Laos © Piet van der Poel

Foreign Direct Investment in Laos has strengthened the economy with major interest in the hydropower projects. Other industries are mining, timber, agricultural processing, silk, garments and tourism. The major investors in the Lao economy are Singapore, Taiwan, South Korea, Thailand and France but, with its limited domestic market, it is a struggle for Laos to attract international interest to match that of its larger neighbour, Vietnam.

In addition to being engaged in the struggle of attracting foreign investment without forfeiting its autonomy, the LPRP has attempted to build bridges with the Lao diaspora, in the hope of rallying their expertise and finances to support the state-led development process.


The OneWorld Laos Guide was first published in 2004 with a text written by Volunteer Editor Alicia Altorfer-Ong

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