Political situation Significant progress on development, but deficits with regard to governance

    Laos is caught between political standstill, an economic crisis and ambitious development plans. While the government is pursuing reforms, the country is still living with the reality of corruption, weak institutions and the lingering consequences of the Viet Nam War.

    Government building in Vientiane, the capital of Laos

    Political system

    The Lao People’s Democratic Republic has been a single-party state ever since it was founded in 1975. The Lao People’s Revolutionary Party (LPRP) controls all areas of public life. Democratic institutions exist in a weak form only and legal structures are poorly developed. Basic political rights such as freedom of speech and freedom of assembly are subject to significant restrictions. There are no independent monitoring mechanisms to protect human rights. The government controls the media; criticism of the ruling party is censored and punished. The 2025 World Press Freedom Index compiled by Reporters Without Borders ranked Laos 150th out of 180.

    Current challenges

    The government is currently facing a juggling act between economic pressures and political standstill. The ongoing economic crisis (see: Economic situation) is forcing Laos to make major reforms. Laos has set itself the goals of reducing public debt, increasing exports, creating new employment opportunities and reducing its dependence on the commodities sector. It also aims to improve access to basic public services, particularly health care and education. Back in 2009, Laos announced its intention to establish the rule of law by 2020 through the Legal Sector Master Plan. The Plan focuses on reforming and strengthening the justice system, promoting good governance and efficient public administration and effectively combating corruption. Despite significant progress, the project has still not been fully realised. Implementation of the reforms has ground to a halt due to political and administrative inefficiencies, and many programmes fail to progress beyond declarations of intent.

    Corruption an ongoing problem

    A key reason for the low levels of capacity is widespread corruption. The government has shown demonstrative willingness to combat corruption and has implemented ministerial reforms aimed at increasing efficiency – but also increasing control. Initial minor progress has been made in addressing bribery and nepotism. Corruption has been identified as a fundamental issue, yet it persists in almost all areas of public life. In the Corruption Perceptions Index compiled by Transparency International, Laos ranked 114th out of 180 countries evaluated in 2024 (2014: 145th out of 175).

    Development strategy up to 2025

    The 9th National Socio-Economic Development Plan (NSEDP) adopted by the National Assembly in March 2021 was a renewed effort by the government to free the country from its structural dependencies. The Plan was closely aligned with the goals of the 2030 Agenda. As part of the country’s development strategy, an unexpected government reshuffle was announced in March 2025, with four of the previous total of 17 ministries being dissolved. Laos’ national development strategy is being continued in the form of the 10th National Socio-Economic Development Plan, spanning 2026 to 2030.

    In the long term, Laos aims to graduate from the status of least developed country (LDC). This progression was pushed back from 2024 to 2026 due to the pandemic. To reach its goal, Laos needs to achieve major structural transformation, debt relief and a broader economic base. Regional differences between urban and rural areas also need to be reduced and natural resources need long-term protection.

    Historical burdens

    Alongside economic and political challenges, Laos continues to grapple with the lingering consequences of the Viet Nam War. Although it officially remained neutral, Viet Cong supply routes passed through Laos and large parts of the country were bombed by the US as a result. Millions of tonnes of bombs were dropped, and people are still killed by unexploded ordnances and mines in eastern Laos every year.

    Pervasive corruption

    One of the great challenges which the government is facing is the modernisation of the governance system. The political and administrative system is characterised by limited capacity. When reforms are launched, they usually fail in the implementation stage.

    While the government has made some initial strides in the fight against corruption, this phenomenon nonetheless continues to affect nearly all areas of public life. On the Corruption Perceptions Index compiled by Transparency International, Laos ranked 126th out of the 180 countries evaluated in 2022.

    2021–2025 Development Plan

    In March 2021, the National Assembly adopted the 9th Five-Year National Socio-Economic Development Plan (NSEDP). It covers the period of 2021 to 2025 and has been aligned with the Sustainable Development Goals (SDGs) of the 2030 Agenda. Notwithstanding the very tight budget situation, the government wants to achieve major breakthroughs in four areas: creativity, human resource development, improvement of administrative and regulatory mechanisms, and poverty alleviation.

    It is the declared goal of the Lao government to enable the country to graduate from the group of least developed countries (LDCs). During its regular review of the LDC list in 2021, the United Nations concluded that Laos had a good chance of graduating from the group. The UN recommended the following important steps, among others, for the five-year transition phase: strong debt relief, a sustainable structural transformation and economic diversification, reduction of rural/urban and other inequalities, and restoration and preservation of natural resources.

    Consequences of the war can still be felt

    One problem that affects the country to this day is mines and unexploded ordnance from the Viet Nam war. While Laos was officially neutral during the war, supply routes for the communist Viet Cong passed through the country, and as a result Laos was bombed by the United States. To this date, parts of the country – especially in the east – have not yet been fully cleared of ordinance. Every year, people are killed or severely injured as a result.

    As at: 16/02/2026