The Lao People’s Democratic Republic, or Laos, is a landlocked country in Southeast Asia. One of the fastest-growing economies in the world, the country has halved its poverty rate in the past 20 years. This is an impressive feat for the import-heavy country given that less than 5% of its land is suitable for agriculture. Poverty in Laos, however, remains a formidable issue. Laos faces a significant wealth gap between its capital Vientiane and poorer rural areas. Foreign aid and international efforts strive to reduce poverty in Laos.
The World Bank and the Poverty Reduction Fund
Created in 2002, the Poverty Reduction Fund (PRF) linked Laos to the international community through the World Bank, aiming to reduce poverty in Laos. The goals of the PRF have progressed over time, reducing poverty at a grassroots level and helping the Laotian poor achieve self-sustainability.
PRF has positively impacted more than 10,000 Laotian women and their families – self-help groups in different villages provide microloans, monthly household income has increased exponentially over the years and nutrition centers, roads and schools are constantly improving and serving Laotian villagers.
In December 2019, the World Bank approved additional funding of $22.5 million as a soft loan to Laos. This loan supports the Laotian government’s National Nutrition Strategy, which seeks to improve rural conditions by developing agricultural infrastructure.
The Asian Development Bank
The Asian Development Bank (ADB) grants loans, technical assistance and equity investments to promote development in Asian countries. ADB has assisted poverty-reduction operations in Laos since 1968 and still finances assistance to the country. As of 2019, it has provided Laos with a total of $2.91 billion.
ADB generally focuses on sustainable development in Laos but also funds education to achieve social and economic development. Because of its early involvement in Laos, ADB’s efforts have yielded impressive results, having connected more than 20,000 households to electricity and water and providing education facilities to more than 100,000 Laotian students.
The United Nations Development Program’s Brand Laos Initiative
The United Nations Development Program (UNDP) fights global poverty, seeking sustainable development and global equality. UNDP has several ongoing projects in Laos supporting gender parity and government transparency. One notable initiative is a project it calls Brand Laos – a mission fighting for a unique Laotian brand and niche.
Brand Laos researches Laotian economic niches in order to create a unique marketable perspective for the country, finding viable products for farmers, producers and service providers. This economically benefits Laos, raising income for agricultural workers and producers. A Laotian niche could reduce poverty while bringing spurring development.
In particular, these types of projects seek high-quality products for international markets where consumers pay extra for ethically produced foreign products. Brand Laos has looked into products and services such as tea, silk-based clothing and ecotourism.
Conditions in rural Laotian households have improved drastically in recent decades, thanks to these international efforts. The Laotian national poverty rate was 46% in 1992 and fell to 23% in 2015. Additionally, households have greater access to electricity, water and even extraneous symbols of development like smartphones. The continued work should increasingly reduce poverty in Laos.
– Maggie Sun
Photo: Flickr