Lao PDR

2019 Progress Report: Lao PDR - United Nations Partnership Framework 2017-2021, A Partnership for Sustainable Development

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INTRODUCTION

As this report documenting results and progress achieved through the UN Partnership Framework (UNPF) in 2019 was under preparation, the COVID-19 global pandemic was underway, with the first cases in Lao PDR detected in March 2020. Beyond the immediate public health crisis, COVID-19’s ultimate socio-economic impact may lead to reversals in the progress and results achieved to date. These findings and details will be presented in the year to come since the full magnitude and implications of the pandemic are not yet fully understood noting in addition, that COVID-19 is also beyond the scope of 2019 results reporting.

The year 2019, brought a number of challenges but also great cause for optimism to Lao PDR, as the country moved closer to attaining its national ambition of graduation from Least Developed Country (LDC) status, potentially becoming only the third landlocked developing country to do so, while at the same time, grappling with persistent development challenges including for example, ongoing efforts to build resilience while mitigating the impact of weather and climate-change induced shocks. In addition, no sooner had the country begun its slow but steady recovery from floods in north, central, and southern Laos in 2018, than new floods wreaked havoc in several southern provinces August-September 2019. Compounding the flood-related challenges, in 2019, outbreaks of Dengue Fever posed a severe threat to public health while the spread of African Swine Fever (ASF) and Fall Army Worm (FAW) infestations of vital crops, threatened the livelihoods and food security of communities in affected areas. Against this backdrop, Lao PDR’s economic growth contracted to just under 6 per cent in 2019, down from 6.3 per cent in 2018, and 6.8 per cent in 2017, with both agricultural and industrial production declining due to the 2019 floods. With the continued current account deficit, low levels of foreign reserves, a high level of debt, managed exchange rate, and a dollarized banking system, Lao PDR is vulnerable to macroeconomic uncertainties. Inflation continued to rise after falling to a low of 0.8 per cent in 2017, reaching 2 per cent in 2018 and 3.3 per cent in 2019, reflecting higher fuel and food prices and the depreciation of the Lao Kip against the Thai Baht and US Dollar in 2019 by 7.6 per cent and 3.6 per cent, respectively.4 On a brighter note, over the past few years, Lao PDR achieved remarkable economic growth rates, with headline GDP growth rates averaging close to 8 per cent over the past decade, making it one of the fastest growing economies in the Asia-Pacific region. This has been attributed in part to strong and sustained social progress, for example, with life expectancy at birth increasing from 64 in 2009 to 65 in 2017 and 66 in 2018.5 Key drivers of economic growth have included exports of natural resources and heavy investment in major hydroelectric and infrastructure projects.

At sub-national level, decision makers also showed increasing initiative in taking forward provincial development efforts. However, funding long-term capital investments, combined with decentralization of decision making, has stretched Government’s immediate financing capacity, leading to growing economic risks.
Consistent fiscal deficits have been recorded, resulting in general Government debt reaching 59.9 per cent of GDP in 2019, in addition to increasing levels of contingent liabilities accrued amongst State-owned Enterprises (SoEs). As a result, Government has taken measures to tighten controls concerning expenditure and limiting the public sector wage bill. The Prime Minister issued a Decree in October 2019, on the management and use of Official Development Assistance (ODA), covering both grants and concessional loans. The new Decree states that ODA must be used to finance development projects that are in line with the 8th NSEDP, transparent and auditable as well as compliant with agreements drawn up between Government and development partners. Moreover, it helps to streamline coordination of official support in authorized state agencies such as the Ministry of Planning and Investment (MPI) and the Ministry of Foreign Affairs (MoFA), thus allowing macroeconomic considerations to be better reflected in investment decisions. Notably, the need for restraint in Government commitments has made it challenging for both the UN System and Government to move towards more sustainable and programmatic modes of support with increased levels of Government financing as originally envisaged. For the UN System’s partnership with Lao PDR, this has been associated with a continued need for ODA-sourced development projects to support the implementation of the 8th National Social and Economic Development Plan (NSEDP), particularly in the health and education sectors.

As a key high point in 2019, Government continued to demonstrate its solid ownership of, and commitment to the 2030 Agenda for Sustainable Development and its associated Sustainable Development Goals (SDGs), through its endorsement of both the SDG Roadmap and a comprehensive set of 238 SDG indicators (SDGi) in June 2019 under the purview of the National SDG Steering Committee, including the distribution/allocation of indicators across line ministries to ensure their effective ownership, monitoring and reporting. Since 2019 also marked the penultimate year of implementation of the 8th five-year NSEDP (2016-2020), in preparation for the 9th NSEDP (2021-2025), the Prime Minister appointed ministers who were tasked with taking initial steps toward the formulation of the next five-year plan that among other priorities, will localize indicators that have not yet been incorporated. A Round Table Implementation Meeting (RTIM), Lao PDR’s annual high-level platform for development dialogue, was subsequently convened in November 2019, focused on the acceleration of the 8th NSEDP implementation and preparations for the 9th NSEDP.

These priorities include strengthening the private sector by promoting export-oriented industries, diversifying drivers of the economy, including a shift from climate and environment degrading industries such as hydropower and the extraction of natural resources to greater investment in human resources, and an improved business environment. The RTIM 2019 resulted in constructive and inclusive discussions that contributed to facilitating effective development cooperation and partnerships to support the achievement of Lao PDR’s national development goals and priorities, in line with the Agenda 2030’s goal of sustainable development for all Lao PDR citizens, leaving no one behind.

At global level, Government renewed its commitments to advancing the Rights of the Child at the Convention on the Rights of the Child Forum (CRC30) in November 2019 and to ending all maternal deaths. Sexual and reproductive health have been key Government priorities. In addition, at the International Conference on Population and Development (ICPD25), Government also confirmed its commitment to meeting the unmet needs for family planning and ending gender-based violence and harmful practices against women and girls by 2030. Following the Human Rights Council’s Universal Periodic Review’s (UPR) second cycle, Government made positive progress in a number of areas with the adoption of 116 of 196 recommendations. Looking forward, a clear national mechanism should be established to monitor implementation of the accepted recommendations. At national level, a number of important new laws and regulations were passed in 2019. For example, the Lao Penal Code adopted in September 2019, serving as critical legal reference material for the country’s judicial authorities.

Significant progress was also noted in public financial management, including the promulgation of the new Public Debt Management Law, Procurement Law, and a number of tax laws. To support and protect Lao PDR’s workers, in February 2019, a new decree on Occupational Safety and Health (OSH) was promulgated, along with an amendment to the Prime Ministers Decree No. 68 on migrant workers abroad, in an effort to reduce workers’ vulnerability to labour exploitation and human trafficking. In January 2019, Lao PDR adopted the National Green Growth Strategy to ensure that economic growth and development are balanced with environmentally sensitive and sustainable business practices. Similarly, in October 2019, a Climate Change Decree was issued to reduce the impact of climate change threats, while at the same time, increasing the country’s capacity to respond to the threat of climate change. The passing of a new Land Law and Forestry Law in 2019 represented positive progress. In June 2019, the Disaster Management Law was endorsed to provide a national legal framework for Disaster Risk Reduction (DRR).

The UNPF’s Outcomes 1 and 2 reflect both Government and the UN System’s continued commitment to promote opportunities for Lao PDR’s women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity, while benefiting from social protection, which has been recognized as a key strategy for reducing poverty and vulnerability, while strengthening resilience. The UN System’s support to ensure that decent work opportunities are available and accessible by Lao PDR’s citizens took many forms in 2019.
It included for example, strengthening Government’s access to the latest, accurate data on labour and statistics (ILO) to support evidence-based decision-making.
To generate employment opportunities for Lao women, the UN System leveraged Government’s One District,
One Product (ODOP) initiative focused on the promotion of Lao products and handicrafts (UNDP). Given the large number of Lao PDR migrants seeking employment outside of the country, IOM and UN Women worked together to provide support to Technical, Vocational and Education Training (TVET) institutions, to strengthen their capacity to address the specific needs of women migrant workers. The UN System also supported initiatives aimed at ensuring that Lao migrants received practical information on recruitment processes, basic rights, and work/ living conditions in destination conditions prior to their departure, to ensure safer migration and reduced risk of exploitation. Decent livelihoods and social protection may be seen as two sides of the same coin as both are fundamental to people’s well-being and security.
However, most of Lao PDR’s labour force, still do not benefit from social protection coverage. The finalization of the National Social Protection Strategy (NSPS) in 2019 through support provided by ILO, was therefore, a particularly notable milestone that promises to expand the scope of social protection towards leaving no one behind, including the disabled or elderly, who are among the most vulnerable. Given Lao PDR’s vast size, rugged topography, and the diversity of its ethnic groups, many of whom live in isolated and difficult to reach communities, additional national resources should be urgently mobilized and allocated to ensure that livelihood opportunities and national social protection programmes are extended to all corners of the country and available to all Lao PDR citizens.

While climate change has affected nearly all countries, climate-related natural disasters have had a particularly strong impact on developing countries that typically have low levels of resilience to shocks. The UNPF’s Outcome 3 is therefore, anchored around Government and UN System efforts aimed at ensuring that Lao PDR’s citizens are less vulnerable and more resilient to climate-related disasters and that forests, rivers and other critical ecosystems, are protected, given their link to livelihoods and reducing vulnerability to climate-related disasters. In Lao PDR, floods in 2019, in addition to posing a threat to human lives, also heavily impacted multiple sub-sectors, most acutely, agriculture and transport, emphasizing the need for strong national disaster risk reduction systems to save lives and reduce economic losses. The Disaster Management Law passed by Government in June 2019 with support from UN Office for Disaster Risk Reduction (UNDRR) and the IFRC, was a step in the right direction as it provided a solid framework for a coordinated national response by all sectors to respond to disasters and minimize losses to lives and property. Other important initiatives aimed at reducing Lao citizens’ climate and disaster vulnerability in 2019 included UNDP and WHO support to Government’s establishment of a climate resilient health care system through the identification of priority health sector areas to be targeted for climate adaptation. Disasters and other emergencies result in significant impacts on people’s health, including the loss of many lives. They also underscore the inherent challenges related to managing health risks during emergencies and disasters. In response to such challenges,
WHO worked closely with the Ministry of Health (MoH) to ensure national and provincial trainers were able to effectively make use of the WASH Facility Improvement Tool (WASH FIT) at facilities in the 2019 flood affected provinces of southern Laos including Attapue, Savannakhet and Xekong. To protect farmers’ livelihoods as they faced weather and climate related threats such as flood and drought, the UN System provided critical support to two key areas. First, in May 2019, LaCSA (Laos Climate Services for Agriculture), an agro-meteorological information system accessible online and through a mobile phone app, was made available to farmers through FAO support. The multilingual system provided information on rainfall and weather conditions, helping farmers with the rapid identification of the most suitable crops for planting based on the latest national data and statistics.
Second, in the area of disease and pest control, to help farmers respond to African Swine Fever (ASF), FAO convened experts who helped to shed light not only on the prevention and control of ASF, but also its socio-economic impact. In response to Fall Army Worm (FAW) infestations, FAO was also instrumental in Lao PDR’s formulation of a National Standard Operating Procedure (SOP) for eradication of the pest and strengthening the Ministry of Agriculture’s (MAF) FAW monitoring capacity.

Lao PDR’s remaining tropical forest coverage is among the highest in the Southeast Asian region. Towards preserving the country’s forests and rich biodiversity, the FAO-supported the revision of the new Forestry Law and Land Law in 2019, which prevents commercial exploitation of natural forest areas, while allowing degraded areas to be converted to sustainable, livelihoods-generating plantations. Through the Global Environment Facility (GEF), UNDP strengthened national efforts to preserve important wildlife habitats through sustainable forest management. Given its strategic geographical location however, the country’s unique and varied flora and fauna have come under increasing threat from the thriving black-market trade in wildlife. In recognition of Lao PDR’s role as a wildlife source country and transportation hub,
Government worked with UNODC in 2019 to map and identify critical gaps in wildlife and law enforcement legislation to prevent organized criminal groups’ exploitation of gaps and discrepancies in national legislation and criminal justice systems, to commit wildlife crimes.

In order to maintain the positive national momentum to address persistent challenges related to climate change and environment and to further strengthen Government’s disaster management capacities, improved coordination across sectors such as forestry, agriculture and increased engagement of the private sector will be required to for example, guide disaster planning and the sequencing of assistance (e.g. water, sanitation and health facilities). The availability of accurate, updated climate, environment, and disaster data along with capacity building efforts around data collection and management, are also key priorities going forward. While the promulgation of the new Forestry Law and Land Law is a positive achievement, the customary rights of local communities may need to be further ensured.

In the area of education covered under Outcome 4, as indicated in the Mid-term Review of the 8th NSEDP, Lao PDR citizens have benefited from the increased number of schools at all levels including early childhood education, primary, secondary, tertiary, and vocational studies.
Critical challenges persist however in reducing drop-out rates and ensuring education quality and efficiency, as poor learning outcomes and low skills-acquisition have been documented, especially among the most vulnerable groups, thus slowing progress towards meeting SDG4 targets. It is encouraging to note the Governments committment to prioritising budgetary allocations for education and improving access to quality education at all levels, especially for girls and other vulnerable groups, and reduce school drop-out rates. Key highlights of UN-supported 2019 progress and achievements include over 800 children from pre-primary and primary schools in three provinces (Phongsaly, Savannakhet and Salavan) who received Water, Sanitation and Hygiene (WASH) education through UNICEF support. The school meals programme supported by WFP has also been a notable success, contributing to Lao PDR’s nearly universal primary school enrolment. In 2019, 515 meal programmes were officially handed over to the Ministry of Education and Sports (MoES), in line with the shift from implementing to supporting Government’s capacity to continue the programme. Capacity development of government officials at different levels, school administrators, teachers and communities continued to be a key pillar of UN support in 2019. Joint UN interventions in this area contributed to enhanced knowledge and skills of key stakeholders in delivering quality education services, particularly for disadvantaged learners. In 2019, UN agencies continued to support Government in enhancing more equitable access to quality education and skills development opportunities, for example, through UNICEF support to a community-based school readiness (CBSR) programme, providing Early Childhood Education (ECE), in areas without pre-schools or kindergartens.
While solid progress has been achieved in the area of education in 2019 and in previous years, more needs to be done to reach the 8th Education and Sports Sector Development Plan (ESDP) and 8th NSEDP targets. For example, extending quality education to those from disadvantaged background, ensuring children in rural areas acquire 21st century skills to prepare them for bright futures and that Lao youth complete secondary and/or vocational-technical education. In addition, Government’s limited capacity should be considered by the UN system when planning interventions and programmes to prevent multiple, parallel interventions that may overwhelm existing Government capacities.

Under Outcome 5, covering health, water, and sanitation, as an encouraging sign, Government has committed to increasing health resources and spending in the health sector, ensuring steps toward Universal Health Care (UHC) and the expansion of healthcare infrastructure to remote areas of the country. In addition, the Constitution holds that “The State and society attend to building and improving disease prevention systems and providing health care to all people, creating conditions to ensure that all people have access to health care, especially women and children, poor people and people in remote areas, to ensure people’s good health” . A number of important health-related laws were passed in 2019, with support from the UN System. These include the adoption of the National Health Insurance (NHI) Law, a major piece of legislation that moves Lao PDR closer to the achievement of UHC. Most importantly, NHI helps Lao PDR’s citizens, particularly poor families in rural areas, overcome the high cost of accessing health care.
To ensure people are aware of their rights under the NHI, in 2019, WHO continued to work with the MoH to raise awareness. As one of the key pillars for reducing maternal and newborn mortality rates and improving the health and wellbeing of women and their children, Family Planning (FP) is critical. In 2019, through UNFPA support FP in Lao PDR increased, resulting in 257,000 unintended pregnancies averted, 61,000 unsafe abortions prevented and 230 maternal deaths avoided1. To strengthen Lao PDR’s capacity to prepare for and respond to public health emergencies, in 2019, WHO supported the preparation of the National Emerging Infectious Disease, Public Health Emergencies and Health Security Workplan. In response to a large dengue outbreak, WHO also provided much needed technical support including risk communication, vector control and clinical management.

Looking towards the future, it is worth noting that the country’s plans for graduation from LDC status will likely be accompanied by a decline in external funding for public health and will need to rely on increased domestic financing. In addition, the phase-out of GaVI (Global Alliance for Vaccines and Immunisation) support will also reduce health investments in Lao PDR’s health system despite the fact that health service mechanisms remain insufficient. Managing these simultaneous transitions, while also strengthening service delivery, is a key task for the coming years.

The UNPF’s Outcome 6 on food security and nutrition focus on how our relationship to the world around us, including our ways of growing, distributing, and consuming food is increasingly challenged by pressures like climate change and environmental degradation. In Lao PDR, good progress has been made over the past twenty years in reducing poverty and hunger, but malnutrition continues to be one of the main SDG challenges affecting children across socio-economic status. Stunting affects around one-third of children under five; though in some provinces and specific ethnic groups, more than half of children under five are stunted. Improving access to healthy, diversified diets and ensuring children receive appropriate care is therefore, vital to improving nutrition. In 2019, UNICEF provided both financial and technical support to mainstreaming nutrition into the national Reproductive, Maternal, Newborn, Child and Adolescent Health (RMNCAH) strategy, through a “whole child” approach that considers a child’s full lifecycle. In the context of emergency response to the 2019 floods, UNICEF partnered with the MoH to deliver emergency nutrition interventions to displaced populations, including 154 children with Moderate Acute Malnutrition and 21 children with Severe Acute Malnutrition. To improve food safety in Lao PDR, in 2019, ITC provided support to strengthening regulatory frameworks related to the use of pesticides in fruits and vegetables.

Going forward, lessons from 2019 highlight the multisectoral nature of nutrition showing that nutrition interventions are most successful when mainstreamed through all sectors including the health sector and programmes. In addition, nutrition interventions with the greatest impact should be prioritized. Continued challenges in Government capacity across sectors, to respond to emergencies will also require ongoing UN system support for the foreseeable future and should be prioritized.

An efficient and effective public sector that is transparent, accountable, and trusted by its citizens is built on strong institutions and solid public sector management.
The UNPF’s Outcome 7, therefore, aims to ensure that Lao PDR’s institutions and policies both at national and local levels, contribute to the delivery of quality services that correspond to the needs of Lao PDR’s citizens. To strengthen their capacity to engage Lao PDR’s citizens, in particular the most disadvantaged and marginalized and ability to undertake effective law-making based on citizens’ needs, in 2019, UNDP continued to provide support to the National Assembly (NA) and Provincial People’s Assemblies (PPAs), in particular, the development of legislative agendas of the 7th and 8th National Assembly Ordinary Sessions in 2019.

Other contributions provided by the UN system towards strengthening institutions included capacity building of the Lao Statistics Bureau (LSB) and line ministries to develop the SDG indicators. Led by UN DESA’s Statistics Division, Government, policymakers, academia, civil society, and user groups joined a national workshop in June 2019, to discuss common data challenges and drafted a strategy for continued user engagement for SDG monitoring. This was followed by capacity building training for the analysis of SDG indicator metadata with participants from LSB and 20 line ministries. In Lao PDR, Unexploded Ordnance (UXO) contamination continues to have a negative impact on livelihoods in rural areas. In 2019, UNDP strengthened its support to the National Regulatory Authority for the UXO/Mine Action Sector in the Lao PDR and the Lao National Unexploded Ordinance Programme (UXO Lao), with the goal of improving the coordination and implementation of UXO clearance efforts to open up otherwise productive land in rural areas. Given the share of the population involved in agriculture, UN-Habitat partnered with the Ministry of Natural Resources and Environment (MoNRE) on issues related to the fair and efficient administration of land, including inclusive land rights enumerations undertaken at household level. Lao PDR’s location at the crossroads of the Indochinese peninsula, places it at the center of a regional network for the movement of people and goods. To support physical border management, UNODC worked in partnership with Ministry of Public Security (MoPS) to strengthen the capacities of Government’s network of 15 Border Liaison Offices (BLOs). Through trainings, the BLOs benefited from capacity building on cross-border communication and coordination, data and intelligence gathering and information sharing. To tackle the issue of human trafficking, IOM worked closely with the Counselling and Protection Centre of Lao Women’s Union (LWU), completed research on Community-Level Responses to Trafficking in Persons in Vientiane Province to better understand social responses, reporting patterns, and barriers to reporting. The research aimed to support better understanding of community-level attitudes towards existing legal mechanisms and anti-trafficking information campaigns.

While capacity development continued to be a key focus in 2019, going forward specific needs should be identified in order to tailor capacity development approaches to strengthen national institutions. More specifically, strengthened national data systems, improved availability of key data and disaggregation and strengthened capacity of the national statistics system are needed to effectively monitor progress towards the SDGs.

Under the UNPF’s Outcome 8, the UN System works in partnership with all branches of Government and organizations such as the LWU and the Lao Youth Union (LYU), to improve access to justice and maintain progress towards the realization of human rights. The promotion of good governance and rule of law lies at the heart of Lao PDR’s ambitious plans to achieve the SDG 16 goal of just, peaceful, and inclusive societies. As a major achievement, Lao PDR’s first Penal Code was finalized and enacted in September 2019, with support from UNDP.
The Code subsumes legal provisions and laws related to critical issues for the protection of human rights, including violence against women, children’s rights, and environmental protection and is expected to improve access and referencing of laws by legal authorities. To support broader improvements to access to justice, a notable result in 2019 centred on the expansion of the use of evidence-based processes for legislative development. This was achieved through UNDP support to the Ministry of Justice (MoJ) and other legal institutions.
These improvements contributed to strengthened access to justice and justice services, improved national capacity to harmonize and support the integration of international obligations and standards into domestic law and practice, and increased public awareness of legal rights and responsibilities.

Towards advancing gender equality and ending violence against women and girls, UNFPA worked closely with the LWU, the National Commission for the Advancement of Women and Mother and Child (NCAWMC), and Lao civil society organizations to raise awareness under a 16-day public campaign centered around International Women’s Day and the International Day for the Elimination of Violence Against Women and Girls, reaching an estimated 500,000 people. Other notable achievements included efforts to support the protection of children’s rights. Lao PDR’s Ministry of Labour and Social Welfare (MoLSW), the National University of Lao PDR, and UNICEF, finalized a comprehensive training manual for the social welfare workforce, including sub-national Labour and Social Welfare staff and the Child Protection Network (CPN), which continues to serve as Government’s main strategy for bringing child protection services closer to communities to strengthen identification, reporting and referrals of cases. By the end of 2019, the CPN was established in a total of 1,248 villages nationwide.

While Government made significant progress in law-making and capacity building for justice professionals under the Legal Sector Master Plan in 2019, further strengthening of access to justice will entail improved understanding of legal issues within the legal sector and administration. In addition, Lao PDR’s citizens would benefit from advocacy work focused on improving their understanding of the significance of rule of law. Improved data collection and access to sufficiently disaggregated data will also be needed to strengthen evidence-based policymaking. Capacity building efforts focused on ensuring international global governance principles are sufficiently integrated to bring Lao PDR’s system on a par with international norms and standards, also remains a key priority.