Lao People’s Democratic Republic is one of the fastest growing economies in the East Asia and Pacific region. The high growth rate is contributed to the introduction of economic reforms in the 1980s, when the government began decentralizing control and encouraging private enterprise. The proportion of poor individuals was 39% in the 1990s; the country successfully brought it down to 27.6% by 2010. Laos now has a booming tourism industry, more foreign investments in its natural resources, and exposure to global markets. But despite the progress its economy has been making, the nation remains to be one of the least developed and poorest in the world. Here are some facts and statistics reflecting the problem of poverty in Laos.
Poverty Levels
- Poverty is most common and extreme in mountainous regions, where most of the ethnic minority live. The poverty rate in the uplands is 43%, while in the lowlands it is 28%. Those who resettled from mountain regions to the lowlands comprise the poorest groups in the area.
- The most disadvantaged households have no livestock, include a large number of dependents, are headed by women, and are located in areas that are vulnerable to natural disasters.
- Upland ethnic people are marginalized and socially isolated because of their customs, beliefs, and their languages. The geographic location of their villages also makes them more isolated.
- Poor, rural communities in remote areas have limited access to facilities and services, such as electricity, roads, markets, schools, health services, and financial aid. During rainy seasons, they become unreachable, isolating them geographically and institutionally.
- One-third of the population lives below the national poverty line, lacking the resources to lead healthy lives.
- Only about 10% of the Lao population lives in Vientiane, where most of the wealth is concentrated. In the 1990s, 90% of those who lived outside of Vientiane lived below the poverty level of $1 per day.
- There is a very wide gap between the income of the rich and poor in Laos. The top fifth of the population control 44% of the nation’s wealth, while the bottom fifth control only 8%.
- Laos ranks as the most heavily bombed country per capita. Vast areas in the land are still contaminated with unexploded ordnance (UXO). The presence of UXO continues to cause death and injury, and create food insecurity as wide portions of land in remote areas remain unsafe for farming.
- Two-thirds of the Lao population are at risk of food insecurity or are already food insecure. The most vulnerable are children and ethnic groups in remote places.
- Literacy, health, and nutrition indicators of people living in remote areas are greatly lower than national averages, especially for women.
- According to the Lao Statistics Bureau, the Toumlan district in Xekong province and the Xepon district in Savannakhet province are the poorest districts in Laos. The people in those areas live in extreme poverty.
Economy
- Laos lost nine-tenths of their currency’s value against the US dollar in 1997 during the Asian currency crisis.
- A report from the Asian Development Bank states that even if absolute poverty incidence has halved, the distribution of private household expenditures has become more unequal in Laos.
- Because a large portion of the Lao population don’t have the required education, skills, and experience for jobs outside the agriculture sector, foreign businesses who invest in the country usually bring their own foreign staff with them. This creates a deeper unemployment problem.
Healthcare
- Approximately 44% of children suffer from stunted growth and 27% are severely underweight. In minor ethnic groups, 60% of children are stunted and chronically malnourished.
- More than 40% of children aged under 5 and 63% of children aged under 2 are anemic.
- About 45% of children aged under 5 and 23% of women aged 12 to 49 years old have sub-clinical vitamin A deficiency.
- Based on data from the Health Poverty Action, less than half of all women in Laos go into labor with a doctor, nurse, or midwife to support them.
- The life expectancy for men in Laos is 66 years, while for women it is 69 years.
Agriculture
- Farming accounts for 70% of the total employment, and most rural people depend on agriculture for their income and food. However, they lack the knowledge and technology to improve harvests, sticking to traditional farming methods. Agricultural conditions are also often unfavorable, soil fertility is declining, few farms have access to irrigation, and a household’s land tends to be too small for other crops or paddy cultivation. As a result, productivity is low, sometimes even not enough to feed their family.
- The decline in yields of rice and other crops has forced some families to use resources from the wild forest for food and income. This has contributed to the exploitation of natural resources and the degradation of the environment, which will eventually create a cycle that exacerbates poverty.
Education
- Women receive less schooling than men and generally work longer hours. They take on about 70% of farming tasks, household duties, and taking care of young children.
- Female literacy rate is just 54%, compared to 77% for males.
- 70% of the illiterate population is comprised of women in ethnic groups; only a few of them speak the national language, isolating them even further.
Most poverty reports indicate that poverty continues to decline in Laos. However, if the country wishes to reach its goals of further decreasing its poverty levels, it needs to invest more in education so people will be more competitive and skilled for jobs in various industries, improve its business environment and infrastructure to attract more investments, and as a result create more employment opportunities for its citizens. There should also be more social welfare programs put in place and a strong social protection system to ensure that assistance is provided efficiently to the poor. The planned railway system and the hydro-electric projects in the country are being eyed as key factors in helping Laos progress further.
Crystal Lombardo is a contributing editor for Vision Launch. Crystal is a seasoned writer and researcher with over 10 years of experience. She has been an editor of three popular blogs that each have had over 500,000 monthly readers.
