Lao People’s Democratic Republic (PDR) joined the list of the least developed countries (LDCs) in 1971. In 2018, for the first time, it met the criteria to ‘graduate’ from the list, as affirmed by the global Triennial Review that year and subsequently in 2021. In February 2021, the United Nations Committee for Development Policy recommended Lao PDR for graduation with an extended five-year preparatory period. The decision reflected the severe and ongoing impact of COVID-19. Graduation is expected in 2026.

The report further concluded that graduation would have limited impacts on development cooperation. It is not expected to affect assistance by the World Bank or most United Nations system entities, as most official development assistance (ODA) is received from members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC)5 or via South-South cooperation. Graduation may result in less favourable terms on concessional loans from Japan and the Republic of Korea; a gradual shift from grants to soft loans by Germany; loss of access to the Least Developed Countries Fund (LDCF), the United Nations Technology Bank for Least Developed Countries and the United Nations Capital Development Fund (UNCDF) Investment Support Programme for LDCs; and a reduction in resources for country-specific activities or a requirement for higher cost-sharing by a very small number of United Nations system entities.