Covid-19 pandemic may delay Laos’ LDC graduation

The United Nations is assessing the impact of the Covid-19 pandemic on Laos’ ability to rise above Least Developed Country (LDC) status in 2024 as planned.
Responding to questions by National Assembly members on November 2, Deputy Prime Minister Mr Sonexay Siphadone said the United Nations was looking at whether the pandemic had any impact on the progress of poor nations, including Laos, towards leaving LDC status.
He said that data up until 2019 indicated that Laos is on track to meet all the criteria set by the United Nations as a benchmark for countries to graduate from the list of least developed nations.

However, this assessment does not take into account the current impact of the pandemic on Laos’ development, he noted.
“The United Nations is studying and assessing the impact of Covid-19 on countries that are working to free themselves from least developed status. Laos is one of these countries, so we need to collect more detailed data and analyse it properly,” said Mr Sonexay, who is Minister of Planning and Investment.
He said a comprehensive examination of the impact of the pandemic impact on Laos’ graduation from LDC status would seek to minimise development risks in the future.
The criteria set by the United Nations for graduation from LDC status mean that countries must achieve certain goals relating to the human asset index (HAI) which assesses health and education targets, economic vulnerability (EVI), and gross national income (GNI) per capita.
Laos was deemed to have met two of these three criteria in the first review by the United Nations, which took place in 2018. Only the economic vulnerability criterion remains to be fulfilled.
The 2018 review found that Laos’ gross national income per capita of US$1,996 exceeded the lowest graduation threshold of US$1,230. The human asset index stood at 77.2 compared to the lowest threshold of 66. The EVI was 33.7, close to the threshold of 32 or below.
Laos faces a number of development challenges due to the pandemic. One of these is the significant impact on economic growth, with the growth rate projected to be just 3.3 percent this year.
Mr Sonexay said that despite these challenges, Laos must do more to develop rural areas and address poverty nationwide, as well as improving living conditions.
The successes achieved in poverty reduction, developing rural areas, and narrowing the development gap have created a strong foundation for Laos to maintain economic and social stability, according to officials.   
International economists told Vientiane Times recently that Laos needs to build a strong economic foundation in order to free itself from least developed status.
They added that when Laos is no longer categorised by the UN as a least developed country, it will not be eligible for the Generalised System of Preferences provided by developed nations to Laos. This would mean the loss of low tariff charges and would reduce Laos’ competitiveness in the export market.

By Times Reporters
(Latest Update November 5, 2020)