Vulnerability Profile of Lao People’s Democratic Republic

This report presents the vulnerability profile (VP) of the Lao People’s Democratic Republic, as mandated by General Assembly resolution 59/209 of 20 December 2004. It is intended for use as a background document for the Committee for Development Policy (CDP) deliberations* on the preparedness of the Lao People’s Democratic Republic for graduation from the least developed country (LDC) category.

In the 2018 review, the Lao People’s Democratic Republic met two of the three thresholds for graduation from LDC status: the per capita income and human assets criteria, given its score at 162 per cent and 110 per cent, respectively, of the relevant graduation threshold. By 2017, the Lao People’s Democratic Republic was the thirteenth fastest-growing economy in the world, recording improvements in incomes, poverty, access to some basic services and infrastructure. However, the economy remains largely agrarian, with employment concentrated in agriculture and with labour productivity in the sector considerably lower than in other sectors.

It is recommended that the Lao People’s Democratic Republic pursue a fresh and focused approach to natural resources-based development that also leverages industrial policy.

In the conclusion of this report, three interdependent critical fault lines, namely infrastructure, human capital and domestic resource mobilization supported by enhancements in public institutional capacities are highlighted for short- to medium-term policy action. Developing existing and building new productive capacities, expanding the domestic production sector, including through building new/fostering existing regional value chains (RVCs) (the RCEP provides new possibilities in this area) and forward-looking plans to graduate out of the current duty-free, quota-free (DFQF) support and ODA packages are recommended as priority areas for graduation with momentum and the attention of authorities of the Lao People’s Democratic Republic.