Source: Vientiane Times
The United Nations Conference on Trade and Development (UNCTAD) will encourage development partners to maintain their assistance to Laos for a while after the nation graduates from Least Developed Country status.
“In fact, one of the things we are doing is to encourage development partners not to reduce aid to countries when they graduate [from this category],” UNCTAD’s Trade and Poverty Branch Chief, Mr Patrick Osakwe, told Vientiane Times recently.
“Graduated countries need some time to put in place measures to ensure that their positions are sustainable,” he added.
Mr Osakwe spoke to Vientiane Times after attending a workshop in Vientiane. The meeting, which was attended by UN and government officials, discussed preparations by Laos to rise out of the UN’s list of Least Developed Countries in 2024.
Mr Osakwe said that, based on the current assessment by the UNCTAD team, Laos was on track to become a developing country in 2024 thanks to its strong economic growth over the past several years and improved living conditions.
“Laos is basically on track to meet the [graduation] criteria for the second time in 2021. If the present trend continues and if there is no negative shock that affects the country in the intervening years, there is a high probability for Laos to graduate,” he said.
According to Mr Osakwe, the criteria which UNCTAD uses to assess whether least developed nations are eligible to graduate from this designated status are national income, human capital, and economic vulnerability.
There are two areas of concern that Laos needs to address to meet the criteria for graduation, namely malnutrition and maternal mortality, Mr Osakwe said, adding that Laos needs to make improvements in both these areas to fulfil the human capital criterion.
Another concern is economic vulnerability. In this regard, Laos has to build economic immunity to the impacts of climate change, which is now causing a serious negative impact on agricultural productivity.
Laos is an agriculture-based nation, which means that a large proportion of the population is employed in this sector so it is very important to make this sector of the economy more resilient to climate change.
Mr Osakwe said that apart from these concerns, Laos still needs to work harder to restructure its economic base, as current economic growth is based on the natural resource sector, such as mining and hydropower.
Laos needs to diversify its economic base so that it will be in a position to maintain economic stability. The current economic structure is not very strong as the price of mining products on the world market always fluctuates in accordance with market demand.
Mr Osakwe said that apart from encouraging development partners to continue their aid for Laos during the graduation transition, UNCTAD would help Laos to enhance its capacity-building to sustain its growth.