Reducing Rural Poverty in Lao PDR through Community Efforts

October 17, 2016


  • New World Bank support aims to scale up results to date and to benefit more poor communities across Lao PDR.
  • Since 2003, the Poverty Reduction Fund has been supporting the improvement of rural poor’s access to primary education, clean water and healthcare in Lao PDR.
  • The Fund proves to be an important mechanism for harmonizing donor assistance to achieve results that enables the poor to escape poverty.

Vientiane, Lao PDR - Experiences from other countries indicate that lack of infrastructure makes it harder for poor communities to escape poverty. For instance, it is harder for them to send their children to school if there is no school, or no road to the nearest school. It is harder for them to keep their children healthy if there is no health facility nearby, or no safe water supply. In Lao PDR, such trends changed for the better when the Government set up the Poverty Reduction Fund (PRF) with support from the World Bank and other bilateral donors.

“Before the bridge was built, travelling to our village was so difficult, especially during flooding. If people got sick, they could not go see the doctor and children could not go to school,” says Vanthong, village elder of Houtoung village.

Since 2003, the Government started financing a series of PRF projects to enable the construction of vital infrastructure including schools, health clinics, roads and drinking water systems for poor communities across Lao PDR. The main objective of PRF has been to help improve access to and utilization of basic infrastructure and services for poor communities, and to achieve this using inclusive development processes, with an emphasis on sustainability.

“We collect some money yearly for the maintenance budget. If there is damage to the bridge, we use this budget to buy material such as steel and equipment to do the repair work,” says Leo, head of the women union at Houtoung village.

The US$30 million support to the third phase of PRF has recently been approved by the World Bank Board of Executive Directors, which aims to scale up some of the results of the previous two PRF projects. Specifically, the third phase will finance more than 1,000 infrastructure sub-projects (in areas such as education, health, roads and irrigation); continue support to improve the livelihoods, nutrition and sanitation of the rural poor, in particular vulnerable mothers and infants using community driven development approaches.

“The PRF’s approach to project implementation is based on the bottom-up concept that includes village level planning where the villagers are the ones who decide and select activities for the village,” says Phongvan Inthavy, local team leader of PRF, Xiengkhor district. “If the activities are selected by the villagers, they are very proud of implementing, managing and maintaining them knowing that they created these projects themselves.”


" If the activities are selected by the villagers, they are very proud of implementing, managing and maintaining them knowing that they created these projects themselves. "

Phongvan Inthavy

Team Leader of Poverty Reduction Fund, Xiengkhor District

Since 2011, the PRF II project has financed over 1,900 sub-projects benefitting about 650,000 rural poor, or about 10% of the national population. This support has improved lives of people in 42 poor districts in ten provinces across Lao DPR. Results include improvements in access to protected water by 58 percentage points and reduction in travel time to the nearest village by 114 minutes in the dry season and 73 minutes in the wet season.

“Going forward we look forward to being able to support Government efforts in rural development together with others development partners,” says Sally Burningham, Country Manager for Lao PDR.

The PRF attracted considerable development partner funding to support the Government’s policy objective to graduate from a Least Developed Country (LDC) by 2020. The Australian Department of Foreign Affairs and Trade (DFAT) provided financing to the PRF II in the amount of AUD$20 million (US$15.6 million), and Swiss Development Cooperation (SDC) has contributed more than US$20 million for the PRF I and II.  Many other development partners have provided extensive support to complementary rural development programs.