EducationGovernmentLao EconomyLatest News

As Lao PDR Prepares For LDC Graduation, Inequality Has To Be Overcome

Source: KPL

UNDP’s annual statistical update points out challenges and successes

In light of UNDP’s latest statistical update on human development indices and indicators, launched recently, the Lao PDR appears to be continuing on its path towards graduation from Least Developed Country status in 2024.

According to the update, the Lao PDR’s Human Development Index (HDI) value — which is calculated based on the life expectancy, level of education and income per capita of a country’s people — has increased by over 50 per cent since 1990. In 2017, the country’s life expectancy reached 67 years, while the Gross National Income (GNI) per capita reported in 2018 is US$1996.

In order to graduate from Least Developed Country (LDC) status, the Lao PDR needs to pass two of three thresholds. The country’s GNI per capita and Human Assets Index (HAI) has reached the required eligibility value, whereas the target for the Economic Vulnerability Index (EVI) remains to be met. The Lao PDR’s low resilience to shocks and instability remains a concern, particularly during a time, when various parts of the country are suffering from severe flooding.

J&C Services Health Insurance

“The risk that unpredictable occurrences like natural disasters impact existing development gains is high. This pertains even to a high growth rate economy like the Lao PDR,” remarks UNDP Deputy Resident Representative, Mr. Balasubramaniam Murali. 

According to UNDP’s statistics, inequality remains one of the major challenges in the Lao PDR. When the Lao PDR’s HDI value is adjusted for inequality, it decreases by over 26%. The average decrease for other countries in the region is slightly over 15%. Vast inequalities are particularly alarming in a disaster situation, as people with low incomes and difficult access to services often struggle the most with recovery.

Dr. Kikeo Chanthaboury, Deputy Minister of Planning and Investment, believes that data concentrating on more than just economic scales is essential for sustainable and equitable development: “UNDP’s human development data compilation and analysis helps us to forecast and plan a better future, especially when it comes to the quality of development. If the Lao PDR is to avoid the middle income trap, among others, we have to find diversified avenues for growth, design strategies for continued economic transformation right from the start, and invest in transforming education and health systems in a way that will equip the labour force and whole population to continuously adapt. In particular, the graduation from LDC status can happen by improving the education levels among our people who are healthy, live in a sustainable manner and have the creativity that fuels the innovation process and inclusive economic growth,” he says. Currently, the inequality in education in the Lao PDR is at 34%, which is close to the worldwide average for LDCs.

The Lao PDR has, along with most of the developing world, taken major strides forward in almost all categories of human development over the past three decades.  Remaining gaps in opportunities, achievements and empowerment are a key source of inequality in many developing countries. The Lao PDR’s process of moving towards LDC graduation will be strengthened even further when economic growth can be complemented by high-quality human development interventions.