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Laos on track to meet LDC graduation criteria for a second time

Government officials and Laos’ United Nations development partners met in Vientiane to assess the country’s vulnerability in the lead up to graduation from Least Developed Country (LDC) status.
The United Nations Conference on Trade and Development (UNCTAD) in collaboration with the Lao government and the United Nations Resident Coordinator Office for the Lao PDR hosted a workshop titled “National Workshop on the Vulnerability Profile of Laos and Building Resilience through Fostering Productive Capacities and Structural Economic Transformation”.

The workshop took place from October 8-9 and was co-chaired by the Deputy Minister of Planning and Investment, Dr Kikeo Chanthaboury, UN Resident Coordinator in the Lao PDR, Ms Sara Sekkenes, and Head of the Trade and Poverty branch of UNCTAD, Mr Patrick Osakwe.
Over the last decade, Laos has achieved significant gains in economic growth. Progress has also been made in education, health, life expectancy and poverty reduction, the meeting heard.
Income per capita increased from about US$350 in 2006 to US$2000 in 2018. Laos’ Human Assets Index increased from 46.4 in 2003 to 72.8 in 2018, and the Economic Vulnerability Index decreased from almost 60 in 2009 to 33.7 in 2018.
As a result of these positive developments, in 2018 Laos met two of the three criteria for graduation from Least Developed Country status.
Addressing the workshop, Ms Sekkenes said, “Driven by strong economic growth and rapidly improving health and education, Laos is one of the best performers for LDC graduation in 2024. In view of LDC graduation as top priority, it is important to prepare a smooth transition strategy that will help Laos to manage the phasing out of certain international support measures, ensuring alignment of the strategy with the overall strategies for the implementation of the 2030 Agenda and firm integration within the 9th National Socio-Economic Development Plan for 2021-2025.”
UNCTAD provides ongoing support to the Centre for Development Policy Research in Laos in coordination with the UN Department of Economic and Social Affairs and other UN agencies, Ms Sekkenes added.  She noted that Laos’ vulnerability profile fits into the overall UN assistance to the government with regard to the graduation assessment.
If present trends continue Laos is likely to meet two of the three graduation criteria for the second time in the 2021 review, with possible graduation in 2024.
But although Laos is on track to meet the graduation criteria, more has to be done to ensure that graduation is inclusive and sustainable.
Also addressing the workshop, Dr Kikeo said “In order to reduce socioeconomic and environmental vulnerabilities, the government has implemented wide-ranging policies and measures, including promoting the diversification and transformation of the structure of the economy, and creating an enabling environment conducive for businesses in Laos.”
This requires strengthening efforts to broaden the sources of growth as the “diversification of the economy of Laos is crucial for sustainable and effective transition from LDC to non-LDC status,” Mr Osakwe said.
At present, the natural resources sector seems to be the key driver of growth, but this growth model is also a source of vulnerability and does not generate sufficient employment opportunities.
Given the large rural population, the agriculture sector is key to improving the incomes of farmers, creating jobs in agribusiness and agro-processing, enhancing health and nutrition, and contributing to overall food security.
Another important policy action that the government needs to take is to build resilience to shocks through fostering productive capacities and mitigating, as well as adapting to, environmental shocks.
There is also a need for concerted efforts by the international community to continue international support to Laos to ensure that graduation does not jeopardise the country’s progress towards the achievement of other national and international development goals, including progress made towards achieving the Sustainable Development Goals.

By Times Reporters
(Latest Update October 10, 2019)

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