While Laos has been the beneficiary of rapid economic growth, not all are seeing its benefits.
Laos is a country in transition that is enjoying robust economic growth as a result of its exposure to global markets, increased foreign investment in the country’s abundant natural resources, and a blossoming tourism industry. At the same time, more than a third of Laos's population continues to live below the global poverty line of U.S. $1.25 PPP a day in a society where most of the population remains dependent on subsistence agriculture. Farming still accounts for 67.6% of total employment, compared with 16.9% of the population who is self-employed and only 15.5% who are wage-earners, according to the World Development Report 2013. The UN Food and Agriculture Organization estimates that 93% of women who participate in the labor force in Laos are employed in agriculture. Agriculture also still accounts for 29% of Laos’ GDP, compared with 19% for industry and 51% for services.
The official Vientiane Capital Region extends over 3,920 km2 of which only 6% are occupied by developed areas while 68% are forest areas and 16% paddy fields. With a total population of just over 800,000 people, many settlements in the capital region are still villages. Even within the city of Vientiane itself, good roads are a privilege and residents often times must use dirt roads to access essential services like schools or hospitals.
As this suggests, booming economic development does not automatically translate into improved access to services for the poor. Without a system of social protection, the poor have to rely on friends and relatives in times of economic hardship. This reflects the fact that unskilled farmers working small plots of land face immense difficulties in trying to find a non-agricultural job to supplement their meager incomes.
In Phonethong Village, located on the outskirts of Vientiane, the capital city, I encountered a woman named Kaum – a mother, farmer, laborer, and factory worker – living at the far end of the village. She and her husband own a small plot of land barely capable of producing a subsidence level output. In order to feed their family, they are forced to spend their nights laboring on other villagers’ farms. In addition, Kaum works a number of shifts at a nearby garment factory, earning U.S. $50 every two weeks, or approximately U.S. $3.57 a day. Despite these extra income sources, Kaum and her husband struggle just to feed their family of four, let alone to put their children through school or make capital investments in their farm to increase output.