Lao, République Démocratique Populaire
The Economic Outlook for Southeast Asia, China and India is a regular publication on regional economic growth, development and regional integration in Emerging Asia. It focuses on the economic conditions of Association of Southeast Asian Nations (ASEAN) member countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. It also addresses relevant economic issues in China and India to fully reflect economic developments in the region.The Outlook provides an update of macroeconomic trends and challenges, country-specific structural policy notes and a thematic focus which varies in each volume. The Update of the Outlook has been published since 2018, following the Special Supplements of 2016 and 2017 editions, to ensure that the projections, data and analysis remain current and useful.
Lao People’s Democratic Republic (Lao PDR) has made significant headway on its development path over the past three decades. The country’s sustained economic growth has been led by booming commodity exports and substantial inflows of external financing. Many Laotians have seen significant improvements in their well-being. Poverty has declined as household income has increased, and many important development goals in education and health have been achieved.
In the face of macroeconomic challenges, a shift from commodity-driven growth to a more inclusive prosperity paradigm that emphasises the creation of broad-based opportunities, human capital development and green sustainability can unlock Lao PDR’s future development. This report presents priorities for overcoming the country’s current fiscal constraints and finding ways to fund this shift. Recommendations address strengthening Lao PDR’s sustainable finance and debt management, revenue generation and tax reform, investment promotion, and data capacity in order to tap into green finance mechanisms.
This chapter provides a development diagnostic of Lao People’s Democratic Republic (Lao PDR), focusing on the “prosperity”, “people” and “planet” pillars of the United Nations’ (UN’s) Sustainable Development Goals (SDGs). It examines the impressive economic advancements fuelled by investments, commodity exports and tourism, juxtaposed with the challenges of stagnant structural transformation and unequal distribution of opportunities. Emphasising the need for a vibrant private sector in fostering employment and productivity across diverse sectors, this chapter underscores the necessity of stimulating broader-based economic growth. Under the “people” pillar of the SDGs, it highlights the imperative of prioritising human capital development and stresses the need to bolster funding capacity. Addressing environmental concerns, this chapter underscores the urgency of preserving Lao PDR’s natural wealth amid escalating environmental pressures, particularly air pollution and carbon emissions. Finally, it explores the nation’s increasing vulnerability to climate change, highlighting the need to develop integrated approaches to sustainable development.
This chapter examines trends in investment and investment policies in Lao People’s Democratic Republic (Lao PDR) through a sustainability lens and provides recommendations on how to attract more sustainable investment to the country. Lao PDR experienced an impressive increase in foreign direct investment (FDI) inflows between 2006 and 2017, which has been one of the main drivers of economic growth. However, the country would benefit from FDI that generates more positive spillovers to the local economy and is more conscious of the environment and local communities. Attracting more sustainable investment – which advances environmental and social goals – first and foremost requires improving the overall enabling environment for investment in the country. It would also be important for Lao PDR to integrate environmental and social considerations into investment policies and strengthen the implementation of social and environmental safeguards for investment projects.
Lao People’s Democratic Republic (Lao PDR) faces significant macroeconomic vulnerabilities that have been intensified by global events such as the COVID‑19 pandemic and escalating food and energy prices. Consequently, the country grapples with pronounced fiscal and liquidity pressures and is currently in debt distress. Given these circumstances, Lao PDR’s previous debt-driven infrastructure growth model is no longer viable. To effectively pursue its ambitious sustainable development agenda, the country must address its debt issues and the fragmented governance of its financing framework. Tackling these challenges is fundamental to build the type of sound environment required to harness additional and innovative resources in support of Lao PDR’s development goals. This necessitates efforts to boost tax revenues, diversify investments and develop the domestic financial sector. Given Lao PDR’s current financial constraints, sustained international support is essential to safeguard investments in key development areas, such as healthcare and education. In parallel, designing preventive strategies is crucial to ensuring long-term financial stability and avoiding future debt issues.
Lao People’s Democratic Republic (Lao PDR) faces the significant challenge of raising its tax-to-gross domestic product (GDP) ratio, which remains too low despite substantial growth in per capita incomes. As a result, and without reform, Lao PDR will miss its 2025 tax revenue target. While tax policy cannot be examined in isolation from the country’s challenging macroeconomic setting, Lao PDR needs to change its approach to designing, administering and evaluating the tax system. This requires reconsidering many tax design features, such as overly generous investment tax incentives. There is also a lack of tax policy coherence across the enacted policies, and overall tax compliance remains low. In the future, the tax system should play a larger role in promoting formalisation. High-quality tax policy analysis will also be necessary in order to enact tax reforms and raise sufficient tax revenues while also promoting sustainable economic development.
[18] ASEAN (2023), ASEAN Stats Data Portal, https://data.aseanstats.org/indicator/ASE.TRP.ROD.A.002 (accessed on 20 March 2024).
Lao People’s Democratic Republic (Lao PDR) has the potential to unlock green and climate financing using environment statistics. Mechanisms such as green bonds, debt-for-nature swaps and carbon credits require robust monitoring and reporting mechanisms and strict transparency and verification processes, of which environment statistics are the cornerstone. This chapter analyses the state of play of Lao PDR’s environment statistics system for responding to the data demands of climate financing mechanisms. The key findings reveal that supportive legislation prioritises environment statistics, and establishing the Department of Environment and Stability Statistics (DoES) in the Lao Statistics Bureau (LSB) will help to create a robust institutional framework. Overall, environment statistics underpin Lao PDR’s 9th National Socio-Economic Development Plan (NSEDP) and its associated Financing Strategy. Despite progress, persistent information gaps, co‑ordination challenges between data producers and users, and poor data sharing hinder effective climate financing in Lao PDR. This chapter recommends prioritising data demands, implementing harmonised data templates for improved data sharing, and enhancing capacity development across the National Statistical System (NSS) beyond individual ministries.
Lao People’s Democratic Republic (Lao PDR) has made significant headway on its development path, combining high economic growth with poverty reduction. Sustained economic growth of more than 7% annually between 2000 and 2019 was led by booming commodity exports and substantial inflows of external financing, notably from large investment projects in hydropower, mining and transport. Many Laotians experienced significant improvements in their well-being. Poverty declined as household income increased, and many important development gains in education and health were achieved.
Economic growth is important, but it is just one aspect of development. Policy makers are required to reconcile economic, social and environmental objectives in order to ensure that their country’s development path is sustainable and that the lives of its citizens improve. At the same time, achieving these economic, social and environmental objectives requires strategies for reform that factor in any complementarities or trade-offs across policies that may be needed. It requires the mobilisation of financial resources from various sources and directing these resources towards activities that promote sustainability across different sectors.
Lao People’s Democratic Republic (Lao PDR) has made significant headway on its development path over the past three decades. The country’s sustained economic growth has been led by booming commodity exports and substantial inflows of external financing. Many Laotians have seen significant improvements in their well-being. Poverty has declined as household income has increased, and many important development goals in education and health have been achieved. In the face of macroeconomic challenges, a shift from commodity-driven growth to a more inclusive prosperity paradigm that emphasises the creation of broad-based opportunities, human capital development and green sustainability can unlock Lao PDR’s future development. This overview summarises the report and presents priorities for overcoming the country’s current fiscal constraints and finding ways to fund this shift. Recommendations address strengthening Lao PDR’s sustainable finance, revenue generation and tax reform, investment promotion, and data capacity in order to tap into green finance mechanisms.
The Economic Outlook for Southeast Asia, China and India is a regular publication on regional economic growth and development in Emerging Asia – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam, as well as China and India. It comprises three parts: a regional economic monitor, a thematic chapter addressing a major issue facing the region, and a series of country notes.
The 2024 edition discusses the region’s macroeconomic challenges such as external headwinds, impacts of El Niño and elevated levels of private debt. The thematic chapter focuses on strategies to cope with more frequent disasters. Emerging Asia is among the world’s most disaster-prone regions, and the threat of disasters, such as floods, storms, earthquakes and droughts, is increasing. The report explores how countries can reduce disaster risks and improve resilience by developing a comprehensive approach involving policy measures such as improving governance and institutional capacity, ensuring adequate budgets and broadening financing options, strengthening disaster-related education, improving land planning, investing in disaster-resilient infrastructure and disaster-related technology, improving health responses, and facilitating the role of the private sector.
Alors que les catastrophes augmentent dans le monde entier en raison du changement climatique, les pays d’Asie et du Pacifique font face à un risque accru d’inondations. Or ces pays manquent souvent des infrastructures nécessaires pour s’y préparer et y répondre efficacement. Là où des mesures de protection contre les inondations existent, elles reposent le plus souvent uniquement sur des infrastructures grises ou lourdes qui sont de plus en plus contestées. Les solutions fondées sur la nature (SFN) proposent une nouvelle approche de la gestion des inondations, dont les co-bénéfices vont au-delà de la réduction des risques. Les décideurs de la région l’ont bien compris, mais ils font face à plusieurs défis, notamment l’absence d’une définition claire et commune et de lignes directrices, ainsi que des problèmes de financement. L’impératif croissant de l’adaptation climatique exige une combinaison de solutions complémentaires, innovantes et tournées vers l’avenir, telles qu’une approche intégrant à la fois les SFN et les infrastructures grises.
What are the structural barriers to women's empowerment and inclusive development in Southeast Asia? Building on data from the fifth edition of the SIGI, the SIGI 2024 Regional Report for Southeast Asia: Time to Care provides new evidence-based analysis on the progress and setbacks in eliminating the root causes of gender inequality in 11 countries of the region. It underscores how multiple personal status laws perpetuate gender-based legal discrimination. The analysis also shows that social norms governing gender roles and responsibilities worsened between 2014 and 2022, particularly affecting women’s educational and economic rights.
The report explores a critical policy area for the region, the care economy. Stressing the gendered, informal, and unpaid dimensions of care, it draws on social, demographic, educational and economic evidence to forecast a growing demand for care services in Southeast Asian countries. The report advocates for the strategic development of formal care systems as a unique opportunity to accelerate women's economic empowerment, build inclusive societies and strengthen the region's resilience to external shocks – including those induced by climate change. To dismantle the barriers that prevent the emergence and expansion of such a formal care economy, it provides concrete recommendations to policy makers and other stakeholders.
Subnational governments in Asia and the Pacific are key providers of the public services and infrastructure required to achieve the Sustainable Development Goals. Given this role, it is essential that policymakers and development partners understand and support the effective functioning of multi-level governance structures and subnational government finances across the region.
This joint OECD-ADB report provides a comprehensive overview of subnational governments across Asia and the Pacific. It covers over 467,000 subnational governments from 26 countries, which represent 53% of the world’s population and 40% of global GDP. On average in 2020, subnational governments in the region accounted for 29% of total public expenditure (8.8% of GDP), 35% of total public revenue (8.5% of GDP) and 38% of public investment (2% of GDP).
Harnessing unique data from the 3rd edition of the OECD-UCLG World Observatory on Subnational Government Finance and Investment, the analysis highlights how decentralisation and territorial reforms have reconfigured the structures and finances of subnational governments in the region. It covers a range of topics including fiscal rules, financial management capacity, priority-based budgeting, asset management and the use of public-private partnerships.
The Economic Outlook for Southeast Asia, China and India is a regular publication on regional economic growth and development in Emerging Asia. It focuses on the economic conditions of the Association of Southeast Asian Nations (ASEAN) member countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. It also addresses relevant economic issues in China and India to fully reflect developments in the region. This Update presents the region’s economic outlook, depicting rapidly changing trends and macroeconomic challenges amidst external headwinds.