Logo of Phnom Penh Post newspaper Phnom Penh Post - Laos still committed to LDC graduation despite challenges

Laos still committed to LDC graduation despite challenges

Content image - Phnom Penh Post
Laos is one of 47 nations categorised by the UN as a least developed country. PIXABAY

Laos still committed to LDC graduation despite challenges

Laos remains firmly committed to graduating from the UN’s Least Developed Country (LDC) list, despite the numerous challenges that lie ahead.

Deputy Minister of Foreign Affairs Thongphane Savanphet reiterated Laos’ commitment on Tuesday when speaking during a videoconference with the UN Office of the High Representative for LDCs, the ministry said in a statement.

The meeting aimed to prepare for the upcoming review of Laos’ graduation from LDC status.

The review – the second of its kind – is scheduled to take place early next year. If Laos is deemed to have met the targets set by the UN, the country is expected to officially leave the LDC list in 2024.

In 2001, the government set a target date for graduation from LDC status by 2020 but this target could not be met.

To be considered for LDC graduation, countries must meet two of three criteria when assessed at two consecutive triennial reviews, the UN has said.

LDCs are assessed using three criteria – the human asset index (HAI) which assesses health and education targets, economic vulnerability (EVI) and gross national income (GNI) per capita.

Laos was judged as meeting two of the three criteria in the first review, which took place in 2018. Only the economic vulnerability criterion remains to be fulfilled.

The 2018 review found that Laos’ gross national income per capita of $1,996 exceeded the lowest graduation threshold of $1,230. The human asset index stood at 77.2 compared to the lowest threshold of 66.

The EVI was 33.7, close to the threshold of 32 or below.

The ministry said: “Economic vulnerability is the only criterion we have not yet met.

“However, if Laos is still able to meet two of the three criteria or meet all the criteria in the second review by the UN in 2021, it will be proposed that Laos leave the LDC list by 2024.”

Laos is one of 47 nations categorised by the UN as an LDC.

The Party and government of Laos attach great importance to LDC graduation.

This is reflected by the fact that policies and guidance in this regard were integrated into the eight five-year national socio-economic development plan for 2016-2020.

This enabled Laos to enjoy high-level economic growth of six-to-seven per cent annually, according to the ministry. Besides, the poverty rate fell from 46 per cent in 1992 to just 18 per cent today.

Along with the progress made, there are challenges ahead, notably those caused by the Covid-19 pandemic, which has severely impacted the economy and slashed growth.

Tuesday’s meeting also discussed the Laos-UN cooperation plan, including the joint development of strategies for the graduation transition period and post-graduation to address potential post-graduation challenges.

There are concerns that once Laos is no longer classified as a LDC the change could affect trading privileges and the foreign aid that development partners and foreign countries extend to LDC countries.

The garment sector will be hardest hit by trade losses when Laos no longer qualifies for special tariff allowances upon expected 2024 LDC graduation.

In the EU alone, the garment sector can expect trade losses amounting to $56 million, according to the latest research paper conducted in the context of the International Trade Centre project and funded by the EU.

However, Deputy Minister of Planning and Investment Dr Kikeo Chanthabouly eased concerns by saying that cooperation strategies and plans with development partners including the UN would be developed for further cooperation during the transition and post-graduation period to ensure Laos’ smooth graduation and its sustainability.

He told Vientiane Times: “This will ensure that Laos will not fall back into the LDC category in the future.”

Although development grants are expected to decline after graduation, the number of low interest loans is expected to increase because Lao will be eligible for more credit.

“Grants represent a small component of financial assistance,” Dr Kikeo said, referring to Official Development Assistance.

Tuesday’s videoconference was attended by senior representatives from various ministries.

VIENTIANE TIMES/ASIA NEWS NETWORK

MOST VIEWED

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior

  • Bullets to bracelets: Siem Reap man makes waste from war wearable

    Jewellery is often made from valuable gemstones like emeralds or diamonds and precious metals like gold or silver, or valueless things like animal horns. But a man in Siem Reap has approached the manufacture of delicate pieces from a different angle. His unique form of

  • Second Hungary business forum set for H2

    Cambodia has asked Hungary to provide GSP- (Generalised System of Preferences) Plus facilities for when the Kingdom sheds its least-developed country (LDC) label, as the two countries prepare to hold a second business forum in the second half (H2) of this year to expand trade

  • 61% of 2022 imports came from just 3 markets

    The three largest exporters to Cambodia – mainland China, Vietnam and Thailand – accounted for 60.94 per cent of the Kingdom’s total merchandise imports last year, at $18.245 billion, which was up 11.99 per cent over 2021, according to the General Department of Customs and Excise. Cambodia’s total imports

  • CPP sets out five primary strategic goals for 2023-28

    The Cambodian People’s Party (CPP) on January 29 concluded its two-day extraordinary congress, setting the party’s priority goals for 2023-2028. The ruling party’s congress was attended by more than 3,000 members from across the Kingdom, including the members of the permanent and central committees,