Laos

Laos is a mountainous and landlocked country but it does not lack assets. For some fifteen years, the country’s economic activity has been very strong, driven by an economic model based mainly on the exploitation of natural resources. In 2018, this dynamic slowed down when the country was hit by devastating climatic events (drought, floods).
The Covid-19 pandemic and the subsequent global economic downturn have strongly affected the Lao economy in 2020.
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In Laos, 65% of the population lives in rural areas and depends on agriculture
AFD and Laos: Supporting rural development and developing heritage
fishermen on Nam Ngum lake

Supporting sustainable and inclusive agriculture

Coffee shoots Laos

Supporting sustainable and inclusive agriculture

65% of the population lives in rural areas and depends on agriculture. AFD has been a long-standing partner of Laos and combines support for public policies, field operations and capacity building for local stakeholders. The aim is to improve living conditions by increasing the quantity and quality of agricultural production, supporting sustainable agricultural practices and promoting market access. Our action:

  • Promotion of agricultural activities to combat malnutrition;
  • Building water and irrigation networks;
  • Strengthening the organisation and quality of agricultural sectors (coffee, tea and rice) by promoting certification (organic, fair trade, geographical indications);
  • Protection of biodiversity;
  • The promotion of efficient and sustainable agroecological practices from an economic, social and environmental point of view.

Supporting the justice sector

Courthouse in Laos

Supporting the justice sector

France has long supported the Lao authorities in the justice sector, especially in its modernization and functioning through the implementation of successive projects with the support of several French actors. In 2019, AFD has allocated 1.5 million euros in financing to support judicial institutions by providing human resources support to the Ministry of Justice and high judicial authorities (Office of the Supreme People’s Prosecutor – OSPP – and Supreme People’s Court – PSC) in order to promote effective, equitable and timely access to justice for the population.

Supporting NGOs

Rice paddy, Laos

Supporting NGOs

The NGO network is very active in Laos. AFD provides financial support via the CSO Initiative Facility to six of them for a total of nine projects, five of which are implemented solely in Lao PDR, and four multi-country programs that include activity components in Lao PDR. Among the NGOs supported are the Comité de Coopération avec le Laos (CCL), GRET, Aide Odontologique Internationale (AOI), Tetraktys, AgriSud and AVSF. The subjects covered are varied, from the structuring of sustainable sectors to nutrition and oral health.

Reconciling tourism development and heritage preservation

Ho Prabang, pagoda of the royal palace, Luang Prabang, Laos

Reconciling tourism development and heritage preservation

Since 1998, AFD has been involved in preserving and developing the heritage of Luang Prabang, the ancient capital of northern Laos, with a view to reconciling tourism and traditions.

Since 2012, AFD’s support in this area has been extended to the classified area of Vat Phu Champasak where many pre-Angkorian temples can be found in Champasak province. A new financing of 6 million euros has been granted by AFD to better preserve the Vat Phu Champasak site and in Savannakhet as well as for the creation and implementation of tourist attraction sites, which will contribute to improving the living conditions of local inhabitants, encouraging them to preserve their culture and traditions.

A regional presence

Vegetation, Laos

A regional presence

AFD also finances regional projects with activity components in Laos. It is thus present alongside:

  • The NGO Wildlife Conservation Society (WCS), in addition to the national ECILL project, for the management by local communities of protected areas in the Indo-Burmese hotspot (Myanmar, Cambodia and Laos).
  • The Mekong River Commission, responsible for dialogue between the countries of the region on the management of the Mekong.
  • GRET and its 27 partners for the implementation of the ASSET programme on the agro-ecological transition of food systems.
  • The Pasteur Institute of Laos and its first European standard laboratory as well as the ECOMORE 2 project, focused on the emergence of diseases linked to climate change, in particular dengue and leptospirosis, and a complementary component linked to Covid-19.
  • Finally, AFD Group, through Proparco, supports local economic activity through the ARIZ guarantee, a risk-sharing tool to encourage banks to lend to small and medium-sized enterprises and microfinance institutions.
76
projects funded by AFD Group since 1994
220
million euros committed since 1994

Laos has made considerable progress in development over the last two decades, reducing poverty by more than half between 1993 and 2019 while at the same time GDP grew by an average of 7.3% per year, reducing malnutrition and improving education and health outcomes. However, the country is still classified as a Least Developed Country (LDC).

Nevertheless, Lao PDR has assets: important mineral, forestry and hydroelectric resources, low agricultural production but very characteristic agricultural land and a political will to distinguish itself by the quality of its products. In order to further reduce poverty and boost prosperity, the country will need to implement reforms to support greener and more inclusive growth, diversify income sources and encourage private sector participation while managing its vulnerabilities to the effects of climate change.

AFD has been active in the country since 1994. The high level of public debt (70.9% in 2020) limits AFD's intervention to financing in the form of grants exclusively.

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