Chapter 1: Key developments in the country and regional context
In 2021 the COVID-19 pandemic has presented further challenges across development efforts and has to some extent stalled the promising advancements made in recent years. Following a rapid closure of borders in early-2020 and the introduction of prevention and control measures, Lao PDR was largely successful in containing the spread of COVID-19 in the country until the second quarter of 2021. After the Lao New Year in mid-April, imported cases spread rapidly among populations such as migrant workers, factory labourers, prisoners and eventually to several provinces in the centre and south of the country, leading to a second wave of the pandemic in Lao PDR.
Situated strategically along the Mekong River in the centre of Southeast Asia, Lao PDR is categorised as an Least Developed Country (LDC) and Landlocked Developing Country (LLDC), with an ethnically diverse, largely rural and agrarian population of approx. 7.2 million . The country is experiencing the fastest urbanization rate in the region and the population is expected to reach 8.1 million in 2030 and 9.4 million by 2045, entering a 20-year window of opportunity during which the ratio of the working age population to older and younger dependents is high, offering a one-off opportunity to profoundly transform the country economically and in terms of overall development.
Three out of every 50 people will be older than 65 by 2030, and the largest age group will be of working age (15-64 years, 68%) with females of reproductive age in a small majority3 . Limiting the adverse health effects of ageing and ensuring good health for those entering the working age are necessary preconditions for harnessing the opportunity for a demographic dividend.
Progress during the UNPF Cycle
Prior to the pandemic, Lao PDR was amongst the fastest-growing economies in the region for the past decade, leading to significant poverty reduction and improved living conditions. Lao PDR moved from low income to lower middle-income status in 2011 and the country has continued to make key advancements, meeting all three of the criteria outlined for LDC graduation – Gross National Income, Human Asset Index and Economic Vulnerability Index – paving the way for the Committee for Development Policy to recommend graduation from LDC status by 2026.
Recognizing the exceptional circumstances of COVID-19, the Committee further recommended an extended 5-year preparatory period, in place of the default 3 years. In June 2021, this recommendation was agreed by the Economic and Social Committee and in December 2021, the UN General Assembly presented its formal endorsement.
Despite the substantial progress which has led to the recommendation for LDC graduation, many issues remain. After consistent decline, poverty levels are now estimated to have risen as a result of the pandemic. Even prior to the pandemic, sharp regional, gender, and urban-rural differences persisted, as well as differences in progress amongst different ethnic groups. To ensure a more holistic and inclusive development model, the UN has identified eleven groups that warrant particular consideration4 in programming to ensure that no one is left behind. Those with intersecting deprivations compounded across multiple dimensions are most at risk. These groups were identified in the Common Country Assessment (CCA) by using a five-factor framework considering vulnerability to shocks, governance, socio-economic status, geography, and discrimination as per UN requirements.
The share of the population affected by hunger has declined from one-third to under one-quarter over the past decade. However, even with this progress, Lao PDR is still classified as “serious” on the Global Hunger Index, as one-third of children under five suffers from undernutrition, and the proportion of stunting remains very high, at 33%. Life expectancy at birth has increased from 59 years in 2000 to 68 years in 2018. Similarly, key health indicators like the maternal and infant mortality ratios have improved, although they remain high by comparison to regional peers. Limited access to quality and coordinated health services, including urban-rural disparities, discrimination and availability of reproductive health services remains a challenge. Moreover, the majority of the population are not yet drinking safe water and there remains a sharp disparity in the use of basic sanitation and safe hygiene practices associated with income levels.
Enrolment in basic education has improved, now reaching over 90%, with negligible gender differences. The key outstanding challenges are addressing root causes for high secondary school drop-out rates, including child labour, early marriage, and early pregnancies, improving learning outcomes and completion of the full cycle of basic education, coupled with expanding early learning opportunities, with only one-third of children currently participating in early childhood education programmes. Not only are issues such as child labour, early marriage, and adolescent pregnancies barriers to accessing education, but also for young people, and in particular girls, to decide freely about their education and reproductive health free from discrimination.
In response to COVID-19, the Government of Lao PDR (GoL) introduced stronger prevention and control measures, including locking down major cities, closing schools and suspending interprovincial movement. Despite a decrease of positive cases reported mid-year, transmission spiked from September as a result of the more infectious Delta variant. Since the last quarter of the year, while continuing to vaccinate the population, the number of registered positive cases stood at 111,060 with 372 casualties recorded at year-end, and the GoL began to take measures to ease the restrictions to revitalise the economy.
WHO, UNICEF and other partners provided crucial support to the Ministry of Health (MoH) in the implementation of a National Deployment and Vaccination Plan (NDVP) for COVID-19 vaccines, including shipment of COVAX- and partnersupported vaccines, vaccination campaigns and strengthening cold chain capacity.
Socio-economic implications of the pandemic have been significant, with COVID-19 exacerbating Lao PDR’s longstanding structural vulnerabilities. For instance, revenue collection has continued to fall during the pandemic and public debt has increased causing further difficulties in servicing debt, compounding budget constraints for social sector services, integral components of COVID-19 recovery and more inclusive development. .
2020 marked the conclusion of the implementation of the 8th National Socio-Economic Development Plan (8th NSEDP) and the commencement of the next five-year plan (9th NSEDP 2021-2025). The 9th NSEDP is dominated by challenges associated with development sustainability and climate change, quality and inclusive growth, human capital, infrastructure development and the transition from LDC status. The NSEDP will be accompanied by a COVID-19 recovery strategy in 2022 to ensure further prioritisation in light of the continued fallout of the pandemic.
The UN Sustainable Development Cooperation Framework (UNSDCF) 2022-2026 was developed in 2021 as the UN Partnership Framework (UNPF) 2017-2021 cycle came to a close. The UNSDCF was developed through an extensive consultative process building upon a Common Country Analysis (CCA) and the 16 key recommendations from the independent evaluation of the UNPF.
The NDVP has been particularly successful in Lao PDR due to the GoL’s strong commitment to the programme, the donors’ active support and engagement with GoL, WHO’s and UNICEF’s joint efforts to coordinate with partners through COVAX and beyond, as well as the UNCT’s active engagement with communities to leave no one behind. Including shipments arrived in January 2022, COVID-19 vaccines via the COVAX Facility have provided full vaccination to over 3,8 million people, or approximately 52% of the Lao population. Unlike many other developing countries, Lao PDR has had minimal wastage of vaccines.
The target of 50% vaccination was met at year-end of 2021 with over 3.7 million people fully vaccinated and over 4.6 million people vaccinated with at least one dose.
The table above illustrates that all provinces except for Xaisomboun reached the 2021 target of 50% vaccination rate as of February 2022, while Bokeo and Vientiane Capital have already reached the 2022 target in terms of all recommended doses. The UN will continue to provide support to the GoL to improve access to vaccination to hard-to-reach populations and accelerate the booster programme in 2022. For more information on UN technical and logistical support to the NDVP in 2021, please refer to Outcome 5 in this report