Image Credit: ATM Photo of Subsistence farmer, Kaum, with her children in Phonethong Village.

Laos' "Different Face" of Poverty


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 km2of 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.

Tristan Knowles
November 29, 2012 at 08:35

As another person has pointed out in the comments, Rome wasn't built in a day. And neither will a modern Lao economy be built in just 20 years. Lao only began economic reforms in the very late 80's and more seriously in the 90's and 00's.
Nonetheless, their economy has done well and levels of poverty have decreased over this time as the economy has grown. The problem as I see it is that they now need to shift up the supply chain and do more manufacturing and value adding, rather than just relying on selling their natural resources cheaply. By doing more manufacturing more jobs would be available for rural people or their children.
Yes Lao still has high dependence on agriculture for livelihoods, but it's not a bad thing. It's just that the country is in the early stages of transforming from an agrarian to an industrialised economy. Their challenge is to ensure that the coming decade gains them quality economic development and not just quantity of economic growth.

November 29, 2012 at 08:27

I have  visited Laos many times in the past and even people I know who run businesses have a very precarious life; The tourist season is about 6 months after which many of the guesthouses and restaurants are virtually empty with little or no income.
People in the outlying villages have seen there lives unchanged over the past decades apart from having mobile phones and maybe a satellite dish; the children still suffer from high mortality rates due to cholera, malaria and other diseases which go untreated. Poverty is rife especially in the minority tribal villages.
As with western society, the rich are getting richer while the poor get nothing!
The future for many Lao people does not look good unless they leave which many want to;
I hope they can continue to smile and be hospitable despite this.

November 18, 2012 at 23:22

If Laos can find a way to reduce corruption, it would set a path out of poverty. Also, Laos needs to learn to produce their own products, instead of relying on Thailand, Vietnam, etc… imports.

November 18, 2012 at 22:46

Eradication of poverty cannot be done overnight! There are billionaires and the homeless in the United States the richest capitalist country!

Sang Le
November 18, 2012 at 21:47

Lao is still a communist country?. Although, over the past few years, Lao has reached significant achivements in economic development, especially high economic growth rate, this country still a backward country with low educational level. Lao is different from its neighbors Vietnam and Cambodia because this country has no coastal areas and sea, it is an disavantage of Laos . There is the only way for this country to develop sustainably is focus on education to generate skilled laborers. To do so, Laos government need to open their mind to get helps from NGOs and other countries.

Wasted Dollars
November 18, 2012 at 14:31

What happened to all the money selling China the city land>?
Where was the promise of better education?
When I see the World Bank and the UN in any story on a third world country
I shutter to think the end of the story

November 18, 2012 at 12:34

one key factor that the author misses on the poverty in this country of Laos is the ramnants of Indochina War– the unexploded ordinance or UXO. These bomblets were dropped on this country more than those combined during WW2. after almost 4 decades, they are still deadly and keep the Lao poor because they prevent the people to work on their farm lands.

November 17, 2012 at 22:53

Laos needs a strong education system that every Laos people can benefits and less corruption so the whole country can be out of poverty.

November 17, 2012 at 17:25

I happened to Laos in 2011, in my summer vacations, the facts in the article may be correct, but the writer has failed by bringing the views of single lady, I’ve met hundred of people of different classes, they’re happy, they are busy and lively!

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