Cambodia, Lao PDR and Vietnam have achieved strong economic growth rates and significant prorgress in poverty reduction in the past 20 years. They remain, however, among the poorest countries in southeast Asia. Inequalities are growing and democratic participation remains weak. Poverty is most widespread among the rural population and in ethnic minority groups. Agriculture provides livelihoods for approximately 80% of the population.
All countries face huge challenges such as improving social and environmental development, diversifying the economy and strengthening inclusive growth. As they seek to enter the ASEAN Economic Community in 2015, the social and economic gap with the other six ASEAN countries will have to be narrowed.
All stakeholders within the federal administration coordinate their activities using a common approach. Switzerland's activities in the region all include the cross-cutting themes of gender equality, participation of marginalised groups and non-discrimination, adapting to climate change as well as disaster prevention and risk reduction. Key partners in the development cooperation are:
- Swiss partners: Helvetas Intercooperation, Centre for Development and Environment (CDE), Nestlé, Allianz Re, MeteoSwiss)
- Ministries and provincial or district authorities
- Local NGOs
- International NGOs such as Care International, CORD (peacebuilding organisation), the WWF
- Regional partners (The Centre for People and Forests, Mekong River Commission, Mekong Institute)
- Bilateral donors such as Germany and the Nordic countries
- Multilateral organisations such as the UNDP, World Bank, Asian Development Bank
SDC Programming in Lao PDR
A member of the village handicraft group in Vientiane Province, Lao PDR. Photo by Touravanh
About SDC in Lao PDR
SDC has supported development projects in Lao PDR since 1990. In 2006, SDC opened a country office in Vientiane to oversee Switzerland’s development cooperation activities in the country. Since 2008, the Lao country office has also served as the regional office from where SDC coordinates its programming in Cambodia, Lao PDR, and Vietnam.
Strategy Period 2013-2017
During recent decades, Lao PDR has significantly alleviated poverty: Between 1992 and 2008, the share of the population living on less than US $2.00 a day fell from 46 to 28 percent.
However, not everyone is benefitting from the country’s current economic growth. Citizens have little influence on national policies and decision making, nor do they have any opportunity to ensure that their concerns are considered and needs met. Lack of public services—such as roads, clean water, and health care—affects especially the poor in remote rural areas, ethnic minorities, and female-headed households. These minority groups are also the most impacted by a weak land tenure system, wherein customary land rights are not recognized. SDC considers improvements in governance the most important factor for Lao PDR to be able to achieve equitable, inclusive, and sustainable growth.
Paddy rice farming in Lao PDR. Photo by Michel Wechsler
Agriculture is still an important pillar in the Lao economy: The sector accounts for 33 percent of the country’s GDP and 70 percent of the population rely on agriculture for their livelihoods. Yet, the agricultural sector remains underdeveloped, and poverty is widespread among vulnerable groups. More than 30 percent of children under the age of five are underweight, and more than a fourth of the population overall is malnourished. That’s why SDC will continue its long-standing support to agricultural development and help farmers—especially those from ethnic minorities—achieve food security and sustainable livelihoods.
Lao PDR’s current macroeconomic growth is driven mainly by investments in the natural resources-based industries, such as hydropower and mining, which do not create many jobs for Lao people. Large foreign direct investments are increasing the competition over land, and a growing number of people are driven out of sustenance agriculture and into wage jobs in the industry and services sectors. In addition, Lao PDR is slated to enter into the ASEAN Community in 2015. By then, the country will become an actor in a common workplace and open market, which will encompass ten states and 600 million people.
Skilled labor moving freely across borders will increase competition for jobs, and Lao workers will need to strengthen their skills to be able to compete. Lao PDR faces a formidable challenge in diversifying its economy to create employment for young Lao people entering the job market. To address this challenge, SDC will contribute to strengthening the country’s vocational education and training system.
Switzerland seeks to contribute to poverty reduction, support equitable and sustainable development, and foster democratic governance in Lao PDR.
Local Governance and Citizen Participation