Lao PDR

Millennium Development Goal 1

Eradicate Poverty & Hunger

Poverty in Lao PDR declined steadily from 46 percent to 33 percent during the decade 1992-2002, and the country is on course to attain the MDG target of halving poverty by 2015.

While the incidence of poverty has declined, and the poor are getting less poor on average, the share of the poorest quintile in national consumption also fell from 9.6 percent to 8 percent. This suggests an increase in inequality during 1992-2002, thereby confirming evidence from other sources about increasing disparity among the poor and the non-poor. Food poverty declined faster than overall poverty between 1992-93 and 2002-03, and the average number of months without sufficient rice in villages dropped between 1997-98 and 2002-03.

However, malnutrition remains a significant concern in Lao PDR. Estimates suggest that despite considerable efforts, 37 percent of children younger than five years of age are underweight. Chronic malnutrition, or stunting, also remains a major issue, affecting 40 percent of children under five, and requires urgent attention by both Government and the development community. As a first step, it is recommended to include stunting as an additional MDG indicator for Lao PDR to ensure constant monitoring and action.

Following the widespread conviction that poverty can only be reduced if people have a decent and productive job, a new target on employment was added under MDG 1 in 2006: Reaching full and productive employment and decent work for all, including women and young people.

While the economy has grown considerably in the last two decades, with a significant slice of growth originating from the non-agricultural sector, sectors that create work and are skills-based have not grown in equal measure.

As a result, the overall structure of the workforce has not changed, with around 80 percent of workers still engaged in subsistence-oriented agriculture and associated activities.

Meeting the targets: Economic growth is necessary, but not sufficient for poverty reduction. To continue to achieve significant reductions in poverty, Lao PDR needs to diversify its economy and give further attention to strengthening the agricultural and manufacturing sectors. This will allow for more broad based and equitable growth and skills development. Additionally, attention must be given to the development of rural infrastructure and improved opportunities and wages of the unskilled workers. Lao PDR has the potential for high rates of sustainable agricultural growth that are keys to continued reduction of rural poverty; aiming for a rate of 5 to 6 percent in the next decade is reasonable. Achieving this will involve transitioning from reliance on extensive growth to a future that will depend more on intensive sources of growth.

Poverty reduction alone also is not sufficient to meet the targets on reducing malnutrition. In other words, poverty reduction will not automatically result in an improved nutrient dietary intake. An urgent need exists for intersectoral policies to address both malnutrition and poverty in a comprehensive way. In response to this need, an inter-sectoral Nutrition Policy is being set up, which acknowledges that nutrition is central in development; it has listed 10 main objectives for 2020.

See indicators for MDG 1

Update from the 2010 UNDP report
Beyond the Midpoint: Achieving the Millennium Development Goals:

Lao PDR remains a least developed country with troubling indicators in hunger and malnutrition, maternal mortality and in environmental sustainability; and in areas affected by unexploded ordnances (UXOs), the incidence of poverty is particularly high.

Lao PDR, however, is on track to achieve some MDGs, benefiting from an 8 percent growth rate fueled by exports, tourism, copper, logging and overseas remittances. While it is on track to achieve the income poverty target, pervasive inequalities in urban and rural areas and among the country's ethnic groups persist.

About 40 percent of children under five suffer from chronic malnutrition. A multi-donor effort entitled REACH is working to alleviate child hunger through complementary feeding programmes, treatment of acute malnutrition and by increasing household food security.