Social situation COVID-19 pandemic reverses trend on poverty rates

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Street scene in Vientiane, the capital of Laos

Economic development and income

Between 2009 and 2019, the average annual per capita income in Laos rose from the equivalent of around 950 to 2,600 US dollars. By 2024, however, it had fallen to around 2,150 US dollars.

Prior to the COVID-19 pandemic, some 18 per cent of people in Laos were living below the national poverty line according to World Bank figures. The pandemic significantly exacerbated the social situation in Laos. Currently, around a fifth of the population is once again living below the poverty line. During the pandemic, jobs were lost, especially in small and medium-sized enterprises. Migrant workers returned home and were no longer able to transfer money to their families. Additionally, supply chain disruptions and a deteriorating exchange rate drove up the cost of living. Laos is also experiencing a significant rise in prices as a result of Russia’s war of aggression against Ukraine. In 2023, according to the World Bank, the inflation rate was around 30 per cent.

Overall, considerable progress has been made in reducing poverty, creating access to safe drinking water and reducing child mortality in the last two decades. However, deficits persist in the following areas in particular: nutrition, health and education, environmental protection and gender equality.

Further consequences of the COVID-19 pandemic

The COVID-19 pandemic also exposed weaknesses in the health and education systems and in the area of social protection. Around 30 per cent of people in rural areas – mainly children – are undernourished or malnourished. This is one of the chief causes of delays in physical and mental development. In addition, about 70 per cent of children had no access to online classes when schools were closed during the pandemic. While the government has made a commitment to improve access to basic public services, there is a risk that social spending will be reduced because of the high levels of public debt.

Gender equality and women’s participation

The Gender Inequality Index ranks Laos 120th out of 170 countries. At 61.5 per cent, women’s participation in the workforce is almost equal to men’s (70.7 per cent); however, many women remain in informal, poorly paid jobs. Traditional gender roles and restricted access to education and healthcare present further barriers to women participating fully in social and economic life.