Lao Economy

Low Unemployment Rate Called Into Question

Source: Vientiane Times

Laos’ extremely low unemployment rate has been queried by economists and jobseekers alike with many university graduates struggling to find work.

According to citing the World Bank, the unemployment rate in Laos is expected to be 1.40 percent for the fourth quarter of this year, which is predicted to rise to 1.7 percent in 2020.

This figure is similar to the government’s report regarding the jobless, saying that the majority of Lao people are employed in the agriculture sector and some help their parents to do businesses.

Conversely, an independent economist, Dr Mana Southichak told Vientiane Times the unemployment rate recorded so far does not reflect the reality of the nation.

“I think that the actual unemployment rate in Laos is higher than the figure we have now,” he said, saying that the seasonal jobless rate of those working in the agriculture sector alone is already high. Many people cannot find jobs after harvesting their produce.

The unemployment rate in cities is higher than that recorded in rural areas, according to Dr Mana who has conducted a lot of economic research for the government, international organisations and private companies.

An UN-funded survey in 2010 found that new college and university graduates represent about 6 percent of the country’s workforce, but the jobless rate in this group is very high.

The majority of new graduates are seeking employment with the government as they think that it’s a permanent job. However, the government accepts only small numbers of officials annually.

This year, the new graduates from the National University of Laos alone reached almost 6,000 people and many of them are struggling to find jobs.

A senior economist from the National Economic Research Institute Dr Leeber Leebouapao has a similar opinion with Dr Mana in which they said the survey about the unemployment rate is unclear.

“It’s unclear whether we carry out a survey in the period that people are doing their farming or after their harvest. We do not differentiate whether they are unemployed the whole year or for some particular months,” Dr Leeber said.

But the fact is that Laos has less skilled workers than the country needs, and has more unskilled workers than the market demands, according to Dr Leeber.

“We produce a lot of workforce personnel annually but many of them do not meet the requirements of the private sector. The reality is that we still need a high number of labourers as you will see many companies advertising via the media to ask for labourers,” he said.

Due to a lack of labourers, Dr Leeber said project developers and companies import labourers from other countries.

Laos is similar to Thailand in a way that the unemployment rate has been low not because of different definitions from other countries but because of structural problems.

Bank of Thailand spokesman Chirathep Senivongs Na Ayudhya was quoted in Bloomberg last year as saying that “the agricultural sector absorbs labourers and those who can’t find work can always look for jobs in the informal sector or do something on their own.’