Attachments
Background
The war in Ukraine has had major implications on food security and diets across the world, given both countries’ key roles in global food markets and Russia’s prominence in global energy trade. The resulting global food and economic crisis risks heightening inequalities and vulnerabilities in a world still confronting the effects of the COVID-19 pandemic. In this context, food system resilience is crucial to maintain or adapt its functions in the face of shocks, and ultimately for system sustainability. Through a series of key indicators, this brief describes how the food system has been affected by this ongoing crisis and provides an overview of its resilience and potential opportunities for building resilience further.
HOW HAS LAO PEOPLE’S DEMOCRATIC REPUBLIC (PDR) BEEN EXPOSED TO SHOCKS SINCE 2020?
In the last 3 years, Lao People’s Democratic Republic (PDR) has faced shocks that have affected the food system and its resilience in various ways. Like the rest of the world, the country was hit by the COVID-19 pandemic in March 2020. To minimize COVID-19 spread, the government rapidly implemented strict containment strategies such as school closure, restrictions of movements (lockdown, travel restrictions) and public gatherings among others, which can impact various domains of the food system (e.g., supply chain, consumer environment, consumer behaviors). After this initial phase, those stringent measures were adapted based on transmissions rates (e.g., lockdown in the capital and restrictions in other provinces in April 2021, following the surge in COVID-19 cases). The government also adopted supportive socio-economic policies, which included measures such as emergency cash transfer to garment workers and the most vulnerable households (Figure 1).
Pre-crisis, the Lao PDR currency (Lao Kip, LAK) exchange rate – relative to the US dollar (USD) – has been weak but relatively stable, with variations between 7,800 and 8,700 LAK per USD. During the crisis period, the LAK slightly dropped in value in 2020-21 (by 11% since 2019), and sharply depreciated as it fell by 44% in 2022, reaching by far its highest level within the reporting period (14,000 LAK per USD – Figure 2). The weakening of the LAK, aside from being attributed to critical macroeconomic conditions in the country such as limited fiscal space, a restricted external market, and high public debt, may have been a result of the volatility in global financial markets and the surge in global commodity prices resulting from the war in Ukraine. Besides shocks related to the COVID-19 pandemic and the war in Ukraine, Lao PDR is also prone to numerous climate-related hazards, such as floods and landslides, droughts, and storms. This is illustrated by the major floods that occurred in 2013, and Typhoons Bebinca and Son Tinh that hit the country in 2018, which primarily contributed to the 9% and 11% of the Lao population that were affected by natural disasters these years (Figure 3). A Lao PDR assessment indicated that the 2018 floods affected a total of 2,382 villages and 126,736 households, impacting an estimated total of 616,145 people across all 18 provinces. Due to a combination of geographic and social factors, as well as its high reliance on natural resources and agriculture, Lao PDR is recognized as vulnerable to climate change impacts and is ranked 121st out of 185 countries in the 2021 ND-GAIN Index. Weather patterns are becoming more erratic and the frequency and/or intensity of extreme events are rising with climate change, exacerbating vulnerabilities and impacting on people’s food security in a country where 70% of the population relies on subsistence agriculture.