Over the past four years, starting with the onset of COVID-19 in 2019, Laos has experienced a significant economic shift. The current economic woes, marked by rising inflation, high fuel prices, and the growing depreciation of the Lao kip, have left residents especially vulnerable. Many are struggling to make ends meet on low salaries amidst these challenging economic conditions.
Here are some voices from the ground:
Maikham, a Kindergarten teacher in Saysettha district, who wishes to conceal her full identity for personal reasons, expressed frustration towards her current financial situation, which she described as “unbearable”.
“Ever since our country’s economy has taken a turn for the worse, I have never been able to save my salary until the following month,” said the teacher. “How could I possibly save up when I have to pay my electric bill, fuel, three meals a day, and my children’s tuition fees?”
According to Maikham, her salary is just slightly above the current national minimum wage, which is LAK 1.6 million (USD 75). This has forced her to start borrowing money from the bank – something she had never done during the pre-Covid era. She also offered extra courses after her usual working hours to make additional money.
“Before the virus and all these economic setbacks, I could afford many items and ingredients with just LAK 500,000 (USD 23.36). But now, the same amount could only get you an item or two.”
The teacher further explained that she and other teachers have attempted to ask for a raise. “Well, it didn’t work out well since our employer said they have already paid us enough.”
While seeking a job abroad is always an option, Maikham’s care for her family, especially her children, outweighs her desire to cross the border. “I mean, who wouldn’t want to (go abroad), but I love my family. Separating from them is something I will never resort to.”
Amphone, a maid and a resident of Nongbone village, Saysettha district, Vientiane Capital echoed similar statements. Like Maikham, the maid expressed her interest in working abroad, but due to her family situation and her health condition due to old age, she has no choice but to stay in Laos.
“As a maid, I only get LAK 2 million (USD 93.43) a month,” said Amphone, explaining that her salary is far from enough to cover the whole month. “I always end up spending all my monthly income. Some months, it only took me three days to use it all up just for food”
Due to her low salary, Amphone has to rely on her family, particularly her daughter and daughter-in-law for daily meals. “We [as a family] are all suffering one way or another, but we always look out for each other. That’s basically how I survive day after day.”
While struggling financially, the maid has never asked her employer for a raise due to fear. “I have been working for them for two years or so, and my salary hasn’t moved an inch.” She further explained that if she does not get a raise soon, she would quit.
Before the arrival of the coronavirus, Amphone mentioned that LAK 2 million was enough for her to save for the following month. “Nowadays, 1 kilogram of vegetables costs around LAK 30,000 to 40,000 (approximately USD 1.40 to 1.87). Previously, they cost about LAK 10,000 (USD 0.47),” she explained.
She added that bringing LAK 100,000 (USD 4.67) to the market used to get her an abundance of meat, vegetables, and rice, but now, LAK 200,000 (USD 9.34) only buys a small portion of meat and vegetables.
The struggle of not being able to afford enough consumable products stretched out even to young adults with a family, such as Ketsada Somsaiphon, a Lao staff at a French restaurant, who had to drop out of college to make extra money. “I have always had the thought of working part-time simply for experience, but I would never imagine working full-time just to survive like I am these days.”
Besides the economic struggles, Ketsada considers himself a lucky person as his employer is kind enough to treat their employees to lunch and dinner every day. “It helps that I don’t have to rely on my parents’ allowance anymore as I personally do not want to bother them to become more independent.”
However, the young man’s troubles lie in needing to manage his income very carefully to avoid spending it all before the month ends. “I used to only spend about LAK 10,000 – 15,000 (USD 0.47 – 0.70) for a bowl of rice noodles back in the days when the economy was fine. Now, it’s like LAK 30,000 to LAK 35,000 (USD 1.40 to 1.63).” He noted that the price he mentioned was for a small bowl of rice noodles, if one wants a bigger bowl, they would have to pay up to LAK 50,000 to 60,000 (USD 2.34 – 2.80).
But Ketsada’s situation might change for the better as he has secured a scholarship to continue his studies in Russia in August.
“I would not struggle for a while when I go to Russia. I might even try to get a job there, as well.” Nevertheless, the young man urged the Lao government to increase the minimum wage as many others may not have the chance to seek education and employment abroad.
“The current minimum wage will never be enough for one to survive. Raising it to about LAK 2.5 million (USD 117) would prove to be more sufficient,” he said.
Ko noted the dramatic drop in the Lao kip value compared to the Thai baht, which posed a minor issue for his business for a while. “The most challenging thing was that I could no longer go to Thailand to buy ingredients for my restaurant. To do so, I had to exchange my profits from kip to baht.” However, he soon realized that 90 percent of products in Laos are imported from Thailand. Now, instead of buying products directly from Thailand, he purchases already imported Thai products in Laos using the Lao currency.
According to Ko, the economic situation does affect his business, forcing him to increase the price of his dishes. “At the end of the day, people have to eat, even if the food is expensive,” he added.
Ko further remarked that relocating to Laos was the right choice to escape the “political” chaos in his own country.
Despite the growing inflation rate, Ko insisted he has no plans to relocate soon, as his current business is sufficient to keep him financially stable.
The economic turbulence in Laos has profoundly impacted the lives of its residents, leaving them grappling with rising costs and stagnant incomes. While some, like Maikham and Amphone, struggle to make ends meet and consider options to improve their financial stability, others like Ketsada find temporary respite through opportunities abroad. Yet, there are individuals such as Ko who have managed to adapt and thrive despite the economic hardships.
