The Road to Ending Poverty in Laos

Laos is a poor communist country — the result of a complicated history. Since declaring sovereignty in 1954 American contributions poignantly shape Laos’s physical landscape, albeit initially with bombs. More recent U.S. administrations, alongside international investors, have bequeathed the type of strategic investments in Laos that encourage economic development and social prosperity. Poverty in Laos is shifting.

The Lao people experienced a prolonged period of civil war and armed conflict immediately following independence. After years of abounding poverty, the economy writhed amid growing American anti-communist actions in neighboring Vietnam and Cambodia. The fighting soon leached across Laotian borders as part of a wider U.S. bombing campaign. While Laotians initially measured U.S. contributions only in terms of explosive tonnage, current administrations have retooled U.S. foreign policy in Laos to encourage growth. These efforts require a detailed understanding of Laos and its people.

Agrarianism dominates Laotian society. Rural farmers require an adequate road system to bring agricultural goods market. In 2015, only 14 percent of all roadways in Laos were paved. Poverty in Laos exists predominantly in rural areas, the same locations growing crops with an inadequate transportation infrastructure.

Transportation network improvements implemented in the late 1990s provided proof of a strong correlation between targeted infrastructure investment and rural poverty reduction. The Lao Peoples Democratic Republic (PDR) government conducts household surveys every fifth year, the Lao Expenditure and Consumption Survey, which enables the study of poverty rates. Peter Warr, a professor of agricultural economics at the Australian National University, compared the two surveys that bracket the late 90s improvements to imply, “about 13 percent (one sixth) of the reduction in rural poverty incidence… can be attributed to wet season road access.”

Poverty in Laos and War

The combined impacts of civil war and a U.S. bombing campaign in Laos staunched civil progress and economic prosperity. In an effort to help improve impoverish conditions in the country, a U.S. State Department’s principal foreign policy objective regarding assistance to Laos is to help the country meet its development goals.

President Obama visited Laos in September 2016, marking the first trip by any U.S. president to the country. Likely his last Asian tour as president, Obama’s trip highlighted the U.S. strategy to rebalance Asia and the Pacific. In a speech to the people of Laos, the president alluded to the U.S.’s assumed role to end extreme poverty through “transformative investments.” Obama also discussed diplomatic efforts that resonated strongly with two U.S. national security interests: prosperity and international order.

The president pledged $90 million over the next three years to help Laotians clear American unexploded ordinance. “Over nine years—from 1964 to 1973—the U.S. dropped more than 2 million tons of bombs here in Laos—more than we dropped on Germany and Japan combined during all of World War II,” President Obama stated. The pledge enables Laotian health and prosperity within its borders and supports international order by strengthening Asia-Pacific alliances.

According to sources for Radio Free Asia, “Road construction and renovation in Laos are usually plagued by corruption with exorbitant costs.” Assistance simply does not end after the deposit. The U.S. must follow through, providing the appropriate accountability and oversight.

The takeaway reveals how detailed research, analysis and understanding allow the investor to achieve broader returns as well as dividends. Road investments and UXO removal, while altruistic to end poverty in Laos, stimulate Laotian autonomy and economic progress. An economically independent and prosperous Laos promotes the success of broader U.S. National Security Strategic goals.

– Tim Devine

Photo: Flickr

Poverty in Laos May See Relief

As one of the few countries in the world that remains communist, Laos is ranked as one of the poorest countries in east Asia.

With the collapse of the Soviet Union in 1991, Laos found difficulty in altering their “political and economic landscape.” Despite various attempts at reforms, Laos remained dependent on international donations following the 1990s. Majority of these donations spur from Japan, China, and Vietnam.

In spite of their conditions, the country has been able to make impressive gains within the past 20 years. In the 1990s, the proportion of poor individuals was 39 percent. By 2010, this number decreased to 27.6 percent.

Over the years, Laos has experienced various complications in reforming their economic state. The government has gradually enforced economic and business reforms since 2005. In 2011, a stock market was also opened in the hopes of shifting towards capitalism.

Although these measures have been taken, economic growth in Laos has reduced poverty on a minimal scale. In 1997, the Asian currency crisis struck a deafening blow to the country, causing them to lose more than nine-tenths of their national currency’s value against the US dollar.

The landscape of Laos adds to it’s state of disparity. Being a heavily mountainous area, the country is landlocked and widely blanketed by tropical forests. Less than five percent is suitable for any sort of agricultural subsistence, furthermore contributing to the 80 percent rate of unemployment.

Outside of the country’s capital, individuals lack electricity or any access to general facilities. In the mountainous areas where majority of the population lives, the poverty rate is roughly 43 percent. This is a significant difference compared to individuals in the lowlands, where the poverty rate is 28 percent.

Majority of the disadvantaged households are located in regions that are constantly plagued by the threat of natural disasters, lack livestock of any form, have a great number of dependents, and are led by women.

In Laos, women work more than men, taking an average of 70 percent of farming and household tasks on, while also caring for young children. The literacy rate of women is generally 54 percent, while being 77 percent for men.

One-third of those living in Laos lives below the national poverty line, lacking resources necessary to lead healthy lives. According to Health Poverty Action, less than half of all women who go into labor have a doctor, midwife, or nurse to support them.

Around 40 percent of the children in Laos are chronically malnourished and suffer from severely stunted growth. In various ethnic groups, this number increases to a disturbing 60 percent.

There is good news for the country of Laos, however. In 2010, a Nam Theun 2 dam scheme was inaugurated, projected to provide $1.3bn to the country. This will be used in order to generate electricity to allow exports to Thailand. This step forward will not only boost the economy, but help develop infrastructure as well.

In early 2011 the country was also set to have the construction of their first high-speed rail begin between Laos and China. With all of the anticipated infrastructure and improvements to the overall economy, many hope that Laos will experience relief soon.

– Samaria Garrett

Sources: BBC, Rural Poverty Portal, Health Poverty Action