Vientiane, 29 March 2024 – Uneven development progress is leaving the poorest behind, exacerbating inequality, and stoking political polarization on a global scale. The result is a dangerous gridlock that must be urgently tackled through collective action, according to 2023/24 Human Development Report (HDR), titled “Breaking the Gridlock: Reimagining cooperation in a polarized world", which was launched in Vientiane on 29 March 2024 by the United Nations Development Programme (UNDP), in collaboration with the Development Research Institute of the Ministry of Planning and Investment.

The 2023/24 Human Development Report reveals a troubling trend: the rebound in the global Human Development Index (HDI) – a summary measure reflecting a country’s Gross National Income (GNI) per capita, education, and life expectancy – has been partial, incomplete, and unequal.

The HDI is projected to reach record highs in 2023 after steep declines during 2020 and 2021. But this progress is deeply uneven. Rich countries are experiencing record-high levels of human development while half of the world’s poorest countries remain below their pre-crisis level of progress.

The launching ceremony for the HDR was inaugurated by Dr. Sthabandith Insisienmay, Vice Minister of Planning and Investment. In the opening remarks he noted that “The Human Development Report has highlighted several areas of importance, especially our development journey where we take full ownership of our future to ensure self-reliance following the LDC graduation. Human development should be at the center of our development strategy, particularly focusing on youth empowerment to ensure we maximize our demographic dividend”.

Presenting the report at the National University of Laos, Mr. Christophe Bahuet, UNDP Deputy Regional Director for Asia and the Pacific, noted that “The widening human development gap revealed by the report shows that the two-decade trend of steadily reducing inequalities between wealthy and poor nations is now in reverse”.

Lao People's Democratic Republic’s HDI value of 0.620 for 2022 puts the country in the Medium human development category, ranking it 139 out of 193 countries and territories (the country ranked 140 in 2021). Despite a recovery in human development performance, with an HDI value slightly above the 0.617 pre-pandemic score of 2019, there has been a permanent loss in human development performance, as for most countries and for the globe. But the loss in Lao PDR is not only due to the COVID-19 pandemic. Ms. Martine Thérer, UNDP Resident Representative in Lao PDR explained that since 2014, Lao PDR’s human development performance has significantly slowed down, resulting in a loss that cannot be recovered. 

UNDP also calculates measures related to Human Development Performance. The inequality adjusted HDI calculates the ‘loss’ in human development due to inequality in life expectancy, schooling, and per capita income across the population. Lao PDR’s loss due to inequality is 24.8 percent, which lowers the HDI to 0.466 in 2022. 

While there has been an improvement in reducing the gender gap, coming from an increase in women’s participation in the workforce, Lao PDR’s Gender Inequality Index (GII) value of 0.467 is below the levels of 2020, ranking the country 116 out of 166 countries in 2022. 

Lao PDR’s HDI adjusted for planetary pressures (carbon dioxide emissions per person -production-based-, and material footprint per capita), showed an improvement for 2022 due to marginal decreases in material footprint. However, the current material footprint (12.2 ton per capita) is still much higher than 2014 levels during when the country experienced higher growth with lesser material footprint.

These adjusted HDI values show that while Lao PDR may have rebounded from pre-pandemic levels in Human Development performance, if we take into account inequality in life expectancy, schooling, and per capita income, gender inequality and the pressures on the planet from carbon dioxide emissions and material footprint, the recovery has been incomplete and unequal.

But there are opportunities and how Lao PDR will use them will have far-reaching consequences on human development and growth prospects. First, the current economic crisis is an opportunity to address structural problems and to recalibrate Lao PDR’s growth pathway, diversifying the economy and ensuring that it is more inclusive and sustainable. Second, empowering youth would allow Lao PDR to capture the demographic dividend before the window closes. However, absorbing the over 80,000 new job seekers expected to enter the labour market annually requires urgent investments in decent work, quality education and skills development, affordable and quality healthcare, and economic diversification that creates high-value jobs. Third, a smooth and sustainable LDC graduation can bring Lao PDR enhanced international standing, and improve its access to financial markets, trade opportunities and technical cooperation. However, as called for by the UN Committee on Development Policy earlier this month, some issues will need to be addressed as priorities for a smooth transition, including strong debt relief and improved macroeconomic stability, sustainable and inclusive structural transformation, economic diversification, regional integration, reduction of rural/urban and other inequalities, and building disaster resilience and reversing environmental degradation. 

The presentation of the report was followed by a panel discussion themed "Advancing Regional Cooperation: Enhancing Connectivity and Economic Resilience to Support a Smooth LDC Transition in Lao PDR." The panelists included Mr. Vilayphong Sisomvang, Director General of the Department of Planning and International Cooperation at the Ministry of Labour and Social Welfare; Mr. Viengsavang Thipphavong, Director General of the Institute for Industry and Commerce Economic Research Institute at the Ministry of Industry and Commerce; Mr. Phouxay Thepphavong, Secretary General of the Lao National Chamber of Commerce and Industry; and Ms. Sonomi Tanaka, Country Director of the Asian Development Bank for Lao PDR. The panel discussion was moderated by Dr. Sitthiroth Rasphone, Director General of the Development Research Institute (DRI) at the Ministry of Planning and Investment. 

Panelists highlighted that Lao PDR’s chairmanship of ASEAN in 2024, and the prospects of LDC graduation offer an important opportunity for the country to advance regional integration and promote sustainable and inclusive growth. Multilateral cooperation between ASEAN member states, particularly in trade facilitation and liberalization policies, can support the export sector and enhance the movement of goods and services for Lao PDR. 

The need to ensure greater uptake of social protection systems and to strengthen inter-governmental cooperation in social sectors was stressed. Important areas to consider include financing social protection, better targeting existing welfare schemes towards the most vulnerable groups in rural areas and integrating climate change and disaster risk reduction considerations into social protection policy.  

Panelists underlined that the prevalence of the informal sector in Lao PDR presents several challenges that need to be addressed to create a dynamic labor market in the country. Skills development programmes have to be aligned with the needs of the private sector in order to address skill shortages and mismatch issues. This should be further supported by greater adoption of digital solutions such as the Labor Market Information System (LMIS), hosted by the Ministry of Labour and Social Welfare, which connects job seekers with employers. 

It was also noted that in attracting investments into Lao PDR, efforts must be renewed to ensure that concessions incentivize long-term developmental priorities rather than short-term objectives. 

The launch ceremony was attended by more than 120 participants, including government representatives, Ambassadors and representatives of diplomatic missions and development partners, civil society organizations, UN agencies, academia, and students. 

To view the full report, visit https://hdr.undp.org/content/human-development-report-2023-24

UNDP in Lao PDR wishes to express its sincere appreciation to the Ministry of Planning and Investment and The National University of Laos for their partnership and support in hosting this event.

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Media contacts

For more information, please contact:

Ms. Aksonethip Somvorachit 

Communication Analyst, UNDP 

aksonethip.somvorachit@undp.org 

+856 20 5502 1550