Tag Archives: LDC

Climate, Peace, Development Desires Aired as Laos Meets World at Annual UN Assembly

Mr Saleumxay Kommasith

Between US President Donald J. Trump’s signature America First rhetoric and self-appraisals generating “spontaneous murmurs” and the attendance of New Zealand’s first baby and mum Jacinda Adern, you might be forgiven for missing Laos’ Foreign Minister in the international news reports generated at the United Nations (UN) General Assembly this weekend.

Yet crucial issues of climate change, support for vulnerable communities and countries, sustainable development, peace on the Korean peninsula and beyond and the unilateral imposition of sanctions were among those issues raised by Laos when it had the opportunity to speak directly to the international community.

Laos’ Foreign Minister Saleumxay told the UN General Assembly on Saturday in New York that Laos supported and urged the international community to uphold and further strengthen multilateralism. “This remains one of the core values of our only universal organization, the United Nations,” he said.

Realizing the goals of the 2030 Agenda for Sustainable Development at a time of a changing climate requires national governments and the international community to work “hand-in-hand’ with extra thought to the vulnerable, particularly Least Developed Countries and Small Island Developing States. “Against this backdrop, it is more crucial than ever for world leaders to honour the commitments pledged in the Paris Agreement.”

Laos also highlighted the critical importance of peace and security for socio-economic progress in all nations. “Past experiences have shown that settling disputes by peaceful means is the best way to ensure durable peace that is essential for sustainable development of a nation.”

The international community must help build mutual trust and confidence among countries to support them overcome challenges between them and resolve disputes peacefully, he said.

As such, Minister Kommasith welcomed the thawing of relations in the Korean Peninsula and between the Democratic People’s Republic of Korea and the United States.“We hope that such positive momentum will be strengthened, thereby, contributing to the maintenance of peace and stability, and denuclearization in the region as a whole.”

He also called for the end to the economic blockade of Cuba, given that the enforcement of isolation and sanction measures imposed on any country may not bring about benefits to the international community. “On the contrary, it will cause a loss for all and lead to increasing hostility,” the minister said.

The Lao minister expressed his country’s concern on the continued lack of progress on the Isreal-Palestine front.“We hope that this long overdue issue on Palestine will be resolved by peaceful means in order to achieve a two-state solution where Palestine and Israel can live side by side in peace, security and within internationally recognised borders as stipulated in the relevant UN Security Council Resolutions,” Minister Saleumxay said.

Mr Kommasith also underlined the need to address the scourge of transnational crime, at all levels, noting Laos’ commitment with regional countries at the Association of South East Asian Nations (ASEAN) and the international community in the fight against illicit drug trafficking, illegal wildlife trade, human trafficking and other serious crimes.

PM: Laos Won’t Graduate From Least Developed Country Status by 2020

Laos Least Developed Country

In a surprise revelation, Prime Minister Sisoulith told the members of the National Assembly last week that despite the government’s enormous efforts, Laos will not be able to graduate from its Least Developed Country (LDC) status by 2020, a goal that has been one of the nation’s priorities since 2001.

In response to the pressing concerns of the 5th Ordinary Session of the National Assembly on the topic of poverty eradication, Prime Minister Sisoulith said, “Laos has engaged on a path of development for 43 years. Since 2001, the Party and Government have tried their best to implement a national development plan with the goal of graduating the country from Least Developed Country status, an economic classification given to Laos by the United Nations based on three criteria. And for the first time since then, United Nations representatives have come to perform inspections and have concluded that Laos will not be able to free itself from this classification by 2020 for a number of reasons.”

LDCs are assessed using three criteria: the Human Asset Index (HAI) which assesses health and education targets, economic vulnerability, and gross national income (GNI) per capita.

Countries are required to meet at least two of the three criteria at two consecutive triennial reviews by the Committee for Development Policy to be considered for graduation.

The 2018 Laos review found that the country has met requirements for GNI per capita and the HAI. However, the Economic Vulnerability Index (EVI) has not passed the threshold.

Speaking at the biannual assembly session, the PM stated that Laos’ GNI per capita of US$1,996 exceeded the graduation threshold of US$1,230 or above, while the HAI stood at 72.8, above the required threshold of 66.

The EVI, however, was 33.7, too close to the threshold of 32 or below.

The PM said that Laos must strive harder to meet the set criteria by creating a firm foundation in preparation for graduation.

Laos Least Developed Countries

Less Aid if Laos Graduates from Least Developed Country Status

The policies toward Laos by various development partners could change if Laos graduates from Least Developed Country status, and economists have warned that Laos must prepare for changes in aid and loan policies.

Laos would lose some Official Development Assistance (ODA), loans, and cease to enjoy some preferential trade treatment.

ODA, including grants and low interest loans, equates to more than 10 percent of total investment.

However, Planning and Investment Deputy Minister Dr Kikeo Chanthabouly sees graduation in a more positive light, saying that if Laos receives the new status, it should be able to more easily secure loans, with the new classification enhancing the country’s image and reputation.

He says that while Laos will receive less ODA, it will be able to take on more loans. Meanwhile, the World Bank has warned Laos that public debt has increased to levels that are no longer sustainable.

Public debt made up 70.5 percent of the country’s Gross Domestic Product (GDP) last year, up from the 68.1 percent the year before.

Source: Vientiane Times, Lao Economic Daily


Analysts Concerned with Laos’ Rising Debt

For the first time in twenty years, analysts have drawn their concerns back to potentially unsustainable debt that has been accruing in the region. Largely untouched by the ’97 collapse, experts fear that Laos could get pulled into a new era of financial turmoil.

According to a recent International Monetary Fund (IMF) report, the risk of “external debt distress” in Laos, Southeast Asia’s second smallest economy, has risen from “moderate to high.” The country is in debt for miscellaneous big infrastructure projects, including foreign financing for massive hydropower dams.

The IMF uncovered that Laos’ external public and publicly guaranteed (PPG) debt increased from US$5.4 billion in 2014 to an estimated US$6.5 billion by the end of 2015, or roughly 52% of gross domestic product (GDP). The present figure is currently unknown, however is estimated to be even higher.

Debt sustainability concerns are rising as Laos’ recent booming economic growth, averaging around 8% from 2011 to 2014, has begun to diminish.

The Asian Development Bank (ADB) predicts growth of 6.9% this year and around the same for 2018. Longer term, the IMF projects 6.3% average real GDP growth between 2016 and 2036.

According to experts, there are several reasons for the decline, with economic slowdowns in Laos’ main trading partners, including China, and lower global commodity prices attributing to primary causes.

Analysts also point to poor weather conditions over the last few years for a weakening agriculture sector.

However, while growth rates continues to weaken, the country will need to continue spending to reach its 2020 deadline for graduating from ‘Least Developed Country (LDC) status, a classification as of 2015 where gross national income per capita is below US$1,035.

Analysts suggest to keep borrowing and hope for a new foreign investment driven economic uptick as one solution to the growing problem. The government’s budget plan through 2020 sets the national borrowing rate at 23.7% of GDP, a level analysts doubt the government can maintain at current spending rates.

Though the country remains classified as a LDC, debt repayment and servicing are largely under favorable low-interest terms, however the real test will come when the country transitions from LDC status, shifting the country from concessional to market-based terms.

Government officials have acknowledged this problem, with the finance ministry successfully completing its largest ever bond issue via a US$419 million offering on Thailand’s debt markets in October of this year. According to media reports, half of the raised capital is expected to be used for debt repayment; the other half is earmarked for funding infrastructure projects,.

Boosting domestic revenue would also assist in managing the mounting pile of debt. Last month, Prime Minister Thongloun Sisoulith instructed the finance ministry to re-inspect the state’s revenue sources, including taxes. Tax collection fell from 15.8% of GDP in 2013 to 14.3% last year.

PM Thongloun has personally headed a campaign to diversify Laos’ economic relations away from neighboring China, Vietnam and Thailand, its traditional main trade partners, to other wealthier regional countries.

Upon taking the premiership last year, Mr Thongloun has stated his ambition to transform Laos from being landlocked to “land-linked.”

A Chinese-financed Kunming to Vientiane high-speed railway passing through Thailand, Malaysia and extending to Singapore, is expected to be completed in 2021 and will contribute to that vision.

Land concessions granted as incentives to private companies that involve the movement of populations are also a risk factor.

In past years, Laos has handed over state-owned land in lieu of debt payment to foreign investors. For example, when the country failed to pay back a US$80 million loan China provided to build a stadium for the Southeast Asian Games, the government agreed to hand over a 300-hectare land concession to the contracted Chinese company.

The Prime Minister has expressed his intention to abolish the practice to dispel protests over land ownership. He has also moved to curb the growth of Chinese-run banana plantations in the country’s north where Chinese growers have been granted decades-long land concessions.

Some of Laos’ greatest economic potential is found in its land. Mining and farming remain dominant and hydropower could allow it to become a major power exporter. But it is these same foreign currency-generating industries that frustrate locals, many of whom have come to think the government’s economic development schemes don’t have them in mind.

Source: Asia Times

Laos Must Focus on Family Planning in Order to Prosper


In line with nationwide efforts to graduate Laos from Least Developed Country (LDC) status by 2020, Laos strategically held its First National Conference on Family Planning at the beginning of this month.

Themed, “Investing in Family Planning for Economic Prosperity”, the Ministry of Health initiated the conference that gathered more than 200 delegates, which included officials from key government ministries, provincial governors, vice governors, health officials  and members from both civil and private sectors.

Supported by the UNFPA, the May 3-4 conference was a milestone in its own right, assembling key representatives who focused and discussed family planning goals for the nation,  in context to economic and social growth.

Laos’ deputy Minister of Health, Dr. Phouthone Muongpak, stated in his keynote address, “This is our vision for the future.”

In recent years, Laos has seen tremendous progress in regards to maternal mortality and access to contraception, however, death rates are still critically high on a global scale.

There are still 206 maternal deaths per 100,000 live births, a rate beyond those in developed nations.

The adolescent pregnancy rate is estimated to be 1 in 10, contraception prevalence stands at just 50 percent and 20 percent of family planning needs remain unmet nationwide.

With Laos ranking one of 69 priority countries identified by the Family Planning 2020 initiative, officials have vowed to support women and their right to decide when and how many children they choose to bear.

FP2020’s executive director, Beth Schlachter stated,  “We believe … that access to contraception is a fundamental human right and has important impacts on gender equality, and access to rights for women and girls.”

Family planning is critical to Laos in order to evolve a skilled workforce that can sustain the country long-term and to repress escalating pressures on the health system.

Dr. Kikeo Chanthboury, Laos’ Vice Minister of Planning and Investment explained, “Increasing our government’s investment in family planning commodities, including contraception, will be cost-effective on so many fronts. Spending $1 on contraceptives can reduce the cost of pregnancy related care by $7, and eventually help save millions of dollars in direct healthcare costs averted.”

Though the Lao government has pledged to prioritize family planning, with several development agencies on board to offer support, the conference also provided a platform for those who are on the front lines – provincial governors and health workers – to voice their concerns.

The issue of access to contraception and the demand for additional trained health workers and midwives was paramount, for some.

For others, whose provinces are home to ethnic groups living in remote areas, culturally specific information and local language literature and dissemination methods were essential.

With the support of UNFPA, the government is preparing to implement new measures and has drafted a proposal that outlines how much will be required to assist Laos on graduating from LDC status. The proposal asses an estimated $15 million USD is needed, to be utilized over the span of four years across 18 different provinces.

Funding will be used towards promoting and providing information on long-acting reversible contraception, increasing the number of midwives able to provide such contraception, improving capacity at health centers and campaigns targeting young people.

“I think we really made history here,” UNFPA representative, Frederika Meijer stated. Adding,  “Before, family planning was mainly seen as simply birth control, limiting the amount of people, and the governors were very concerned they wouldn’t have enough working population. But here, there has been a huge mind shift. They see now that family planning is about saving lives, working on quality of life, and having an influence on economic prosperity and social development.”


Source: NewsDeeply