Since 1986, Laos has implemented reform and opening up, comprehensively implemented economic system reform and opening up policy, and the social economy has gradually developed. Especially in
the past ten years, Laos’ GDP has maintained an average growth rate of more than 7.5% on average.Per capita GDP has grown rapidly from 710 USD in 2007 to 2457 USD in 2017. The poverty rate has dropped from 48% in 1990 to 23.2% in 2015, this development has lifted 500,000 people out of poverty,and Laos achieved the Millennium Development Goals (MDGs) in 2015, which halved extreme poverty. According to the Eighth Five-Year Plan of Laos (2016-2020), the Lao Government has attributed the development achievements of the past decade mainly to the effective transformation of central policies into local practices; the government has concentrated its funds on rural development and poverty alleviation, especially Communication networks and rural power supply, invest 17% and 9% respectively to develop education and improve health and sanitation;
international aid and development cooperation.
Post-2015: Poverty rate remains high in ASEAN countries
At present, Laos has a population of 7 million, with a rural population accounting for 71%, and the population engaged in agricultural production accounts for 67.6% of the total employed population.
Agricultural output accounts for 29% of Laos’ GDP (World Development Report, 2013), of which 93% of employed women are engaged in agricultural production. Although economic growth and poverty reduction results are remarkable, rural and urban areas still show a clear gap between the rich and the poor.
The poverty rate in rural areas is 2.9 times that of urban areas. Among them, one third of the highland areas are still in poverty. Below the line, in the lowlands, about one-fifth of the population is in poverty.
Compared with ASEAN member countries, Laos has a higher poverty rate than Cambodia and the Philippines under the poverty line of 1.25 USD. Its neighbor Vietnam has experienced rapid economic growth in the past decade and the incidence of poverty has dropped to around 2%. (Figure
3). At the same time, under the poverty line of 1.90 USD, the incidence of poverty in Laos is only lower than that of Myanmar (32.1%) (Figure 4).
Infrastructure: shackled in the “landlocked country”
As the only landlocked country in ASEAN, Laos is known as the “ heart of the Indochinese Peninsula”. Its territory is narrow and narrow, and mountains and plateaus account for 80% of the country’s land area. The traffic conditions are extremely poor. In the 1980s, Laos proposed to connect with other countries and regions, eager to break through the predicament of the “landlocked country” and strengthen communication with other ASEAN countries. However, the backwardness of infrastructure construction has become a major constraint to the sustainable development of Laos’ economy, and the supply gaps in infrastructure such as airports, electricity and telecommunications have been increasing. Due to the heavy reliance on road transport for internal and external trade, more than 98% of passengers’ journeys and 86% of freight traffic are achieved by road transport.Since 2003, the Lao Government has launched a poverty alleviation fund to implement inclusive development projects to build important infrastructure for poor communities in Laos, including schools, clinics, roads and drinking water systems. As of 2016, the Poverty Alleviation Fund has carried out 988 poverty alleviation projects in 44 poverty-stricken areas in 10 provinces, benefiting 476,466 villagers, about 86% of poor households have mobile phones, 77% have televisions, and
80% have motorcycles. During the same period, the electricity consumption of poor households increased by 18.5 percentage points to 58.7%.
Through years of development, the Laos road network has extended from 14,000 kilometers in 1990 to more than 44,000 kilometers in 2012. However, only about 15% of the roads are paved, and the road network utilization rate during the rainy season is less than 60% (Figure 6). The main roads in neighboring Vietnam are dense, and the closer to the capital Hanoi, the more intertwined the road network, while the main roads in Laos are few and sparse, and the capital city of Vientiane is no exception. The infrastructure indicators in the World Logistics Performance Index (LPI) (Figure 5) show that Laos performed as well as its poverty rate in ASEAN countries from 2007 to 2014, just better than Myanmar.
Prospect of the Eighth Five-Year Plan ” land linked Country “
With the deepening of ASEAN integration, Laos will usher in more development opportunities in the fields of transportation, trade and tourism, and will play a more important role in the global industrial chain. The stable economic development will continue to promote domestic poverty reduction. Results. In 2016, the Lao Government adopted the Eighth Five-Year Social and Economic Development Plan (2016-2020) to achieve an annual economic growth rate of no less than 7.5%. In 2020, it will strive to break away from the ranks of least developed countries and will produce per capita domestic production. The total value has increased to 3,190 USD and the population is expected to exceed 7 million. Another major goal is to reduce the national poverty rate below 10% and work to increase the literacy rate of people aged 15 and over, accounting for 95% of the
country’s total by 2020, while ensuring a broad expansion of the medical network. Laos hopes that by implementing the plan, it will transform Laos’ “landlocked Country” dilemma and become the “land linked Country” in the Mekong region, with a view to finding breakthrough opportunities for
development and poverty reduction. In order to achieve the goal of poverty reduction, the five-year plan aims to achieve breakthroughs through the following ways: rural infrastructure construction, economic crop promotion, community capacity building, coordination of urban and rural
development, strong grassroots governance and stable settlements.
It is estimated that between 2011 and 2020, Laos needs nearly 11 billion USD in infrastructure investment (Asian Development Bank, 2010) to meet the purpose of Land Unicom, which is equivalent to more than 13% of GDP, far higher than other ASEAN countries. The needs of the economy.
The Lao government urgently needs to change the status of “landlocked Country” to find exports for economic development and poverty alleviation, promote development with China Unicom, promote poverty alleviation through China Unicom, and realize the stable transformation of “land linked Country” as soon as possible under the 2030 Sustainable Development Goals.