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FEATURE STORY October 17, 2021

End Poverty — Build a More Resilient Economy in Lao PDR


Lao mothers receive nutritious food preparation training from the Poverty Reduction Fund 

“Poverty is an issue which should concern us all, for there are enough resources in the world for everybody to live comfortably, without lack of food, shelter, education or healthcare” - Alex Kremer, WB Lao PDR Country Manager

October 17 is the International Day for the Eradication of Poverty, or End Poverty Day as it is often known, one of the most important days on the calendar for people working in governments and development agencies all over the world.

Let me be clear: poverty is not a problem specific to Laos, and not even a problem confined to less developed countries. There are poor people everywhere in the world, often living in the richest cities that humans have built.

This is an issue which should concern us all, for there are enough resources in the world for everybody to live comfortably, without suffering lack of food, shelter, education, healthcare, and all the other markers that are used to indicate poverty. On End Poverty Day, we try to increase awareness of this and call for actions that actively address poverty.

This year’s theme for the day is "Building Forward Together: Ending Persistent Poverty, Respecting all People and our Planet." This means we need to build stronger, more resilient societies in the wake of the COVID-19 pandemic while tackling persistent poverty, responding to the global challenge of climate change, and realizing the Sustainable Development Goals (SDGs).

The World Bank is just one of the government’s partners supporting the Poverty Reduction Fund (PRF), which is making a difference in the fight against poverty in priority districts across the country. The incidence of poverty in Laos has fallen from 46% to around 18% over the last 30 years, and the PRF has played an important role in this.

The Poverty Reduction Fund is an important tool in the country’s efforts to achieve the SDGs, and like the World Bank it emphasizes improved livelihoods and nutrition in poor communities, along with better agricultural production so that people can sell surplus livestock and crops. These objectives naturally align with a common goal of the PRFs “parent” ministry, the Ministry of Agriculture and Forestry, and the World Bank. Both institutions believe that improved community-based management of forestry and natural resources is imperative not only to poverty eradication in Laos, but also to the building of a green, resilient, and inclusive economy that is better prepared for future crises.

Despite the difficulties placed on its work by COVID-19, the PRF continues to support people in poorer districts through savings and loan groups, and initiatives to support the National Nutrition Strategy. Another activity organizes community-based construction and repair of local infrastructure. This not only allows people to earn more money for their labor, but also means people take more pride in and better care of rural infrastructure. Better infrastructure, improved incomes for the poorest, and new knowledge on food intake — all managed through community-run platforms — give an important lifeline to families during the pandemic and beyond.

Over the last two years, Laos’s progress in eradicating poverty has been set back by the economic effects of the COVID-19 pandemic, but as vaccinations continue at a good rate, Lao people can hopefully begin rebuilding their economic success from next year. The World Bank will support the country’s efforts, and we are currently discussing the best strategies for this with the government and many other stakeholders as we move to the next five-year Country Partnership Framework for 2022-26.

The economic slowdown accentuated by the pandemic gives us a chance to reset, and move forward again with renewed purpose and clarity of vision as we seek to end poverty. COVID-19 has revealed fragilities and strengths in our societies, and it is time to use the knowledge gained. Laos needs to increase equity across society, by raising revenues from those with high incomes, and by attracting investment in businesses that in turn invest in people and the environment.

Three priority approaches can help people escape or avoid poverty in Laos. Strengthening national institutions that collect revenues, and provide services and support, is vital. At the same time, we need to invest in people, upgrading their education, knowledge, and skills, and making quality healthcare and social protection available. A third crucial component will be the enabling of a more resilient environment. Poor people are the most vulnerable when disasters, including disease, arrive. Protecting forests and nature helps prevent pandemics and natural disasters and can also improve livelihoods through international tourism, better agricultural productivity, and through the environmental services the land provides to citizens and the economy. All these would contribute greatly to the elimination of poverty.

Alex Kremer is the new World Bank Country Manager for the Lao PDR, having presented his letter of appointment to the Lao government in September. He has previously served as World Bank Country Manager in Belarus, Moldova (2014-17), the Kyrgyz Republic and Turkmenistan.

This article was first published in the Vientiane Times on October 15, 2021