The United Nations is reevaluating the likelihood that Laos will graduate from Least Developed Country (LDC) status in 2024 amid the effects of the Covid-19 pandemic.
Speaking to National Assembly members on Monday, Deputy Prime Minister Sonexay Siphandone said the United Nations was looking into how the pandemic will affect the progress of developing nations, including Laos, in their goals of LDC status graduation.
“The United Nations is studying and assessing the impact of Covid-19 on countries that are working to free themselves from least developed status. Laos is one of these countries, so we need to collect more detailed data and analyze it properly,” Mr. Sonexay was quoted as saying by the Vientiane Times.
He said a thorough analysis of the effects of the pandemic on the graduation of Laos from LDC status could help to reduce potential development risks in future.
The criteria set by the United Nations for graduation from LDC status mean that countries must achieve certain goals relating to the human asset index (HAI) which assesses health and education targets, economic vulnerability (EVI), and gross national income (GNI) per capita.
A 2018 Laos review found that the country had met requirements for GNI per capita and the HAI. However, the Economic Vulnerability Index (EVI) had not passed the threshold.
Amid the Covid-19 pandemic, Laos faces a number of development challenges including a significant impact on economic growth, with the growth rate projected to be just 3.3 percent this year.
In spite of these challenges, Deputy Prime Minister Sonexay said Laos must do more to develop rural areas and eradicate poverty nationwide.
If Laos does graduate from Least Developed Country status in 2024, it will no longer be eligible for the Generalized System of Preference, which provides duty-free treatment to goods of designated beneficiary countries.
This would mean an increase in tariff charges, further reducing the country’s competitiveness in the global export market.