Overview
The Lao People's Democratic Republic (Lao PDR) is a landlocked country with a population of over 7.9 million. It is one of the 10 member states of the Association of South-East Asian Nations (ASEAN).
Lao PDR has enjoyed three decades of rapid economic expansion, with its poverty rate dramatically declining from 46% in 1993 to 18% in 2019. Despite a slow-down due to the COVID 19 pandemic, the country is on track to transition out of the least developed country status by 2026. Embracing its strategic central location and abundant hydropower resources, Lao PDR is on a mission to transform from a 'landlocked' to a 'land-linked' country and aspires to a sustainable energy provider at the heart of the ASEAN Power Grid (APG).
Our partnership
The EU is committed to supporting Lao PDR in its journey toward sustainable and inclusive development. This commitment is aligned with Lao PDR's National Socio-Economic Development Plans and sector-based strategies,, its aspirations for graduation from Least Developed Country status, the EU Green Deal, the EU's Global Gateway Strategy, and the Indo-Pacific Strategy. Our aim in Lao PDR is to promote sustainable and quality trade and investment, particularly in sectors related to the green economy, bolstered by improved governance and enhanced skills.
Team Europe in Lao PDR brings together the EU, the European Investment Bank (EIB), Belgium, Finland, France, Germany, Hungary, Ireland, Luxembourg, and Switzerland.
Together, we have endorsed the Team Europe Strategy for Lao PDR for 2021-2025, currently being extended to 2027 with a total estimated funding of €672 million. The EU's initial contribution to this strategy, through the Neighbourhood, Development, and International Cooperation Instrument (NDICI-Global Europe), stands at €83 million in grant funding. Further investments will be leveraged through Global Gateway via the European Fund for Sustainable Development Plus (EFSD+) and development banks of the Member States.
Additionally, Lao PDR benefits from various EU regional and multi-country actions. At the EU-ASEAN Summit in December 2022, the EU announced plans for up to €10 billion investment in ASEAN from Team Europe through Global Gateway including the Green Team Europe Initiative and the Team Europe Initiative on Sustainable Connectivity.
EU-Lao partnership programming documents can be found in the 'Related documents' section below.
Our key initiatives
- Green and inclusive economy
The EU is helping Lao PDR move towards more sustainable agricultural and forestry models. It is also facilitating trade, investment and private sector development. Specific actions include:
- Fostering sustainable and inclusive trade, investment, and connectivity in the agriculture and forestry sectors in particular for more sustainable value chain in coffee, tea and forest-based products.
- Promoting labour rights and improving access to social protection coverage and occupational safety and health for coffee, tea, and forestry sectors workers.
- Increasing transport connectivity and market access, including by building rural roads.
- Conserving ecosystems through integrated landscape management, funding communities for livelihood development while protecting biodiversity.
- Supporting sustainable small businesses in the tourism sector.
- Supporting ASEAN-level sustainable trade, connectivity, and value chains.
- Human capital
We are working with Lao PDR on investing more in human capital development through support to the critical sectors of health and education. Progress has been made in earmarking resources for nutrition in order to reduce stunting and wasting together with focusing on the education and skills needed for green and inclusive growth, particularly in the tourism, agriculture, and forestry sectors. It is also helping address malnutrition. Specific actions include:
- Funding community-based early childhood education for greater education access and reduced inequalities.
- Improved pre-service and in-service training for teachers for better learning outcomes.
- Targeted TVET courses for disadvantaged young adults in order to provide them with better labour market skills.
- Initiating a Youth Sounding Board to create a consultative space on communication, green action, and education.
- Supporting the National Nutrition Strategy and Plan of Action, including through technical assistance and capacity building in the health and education sectors.
- Financing nutrition-sensitive agriculture and nutrition-sensitive agro-ecology applied research.
- Good governance
Through a meaningful collaboration between the EU, Lao PDR and civil society, we are contributing to good governance, improved transparency, the promotion of the rule of law, and the protection of human rights, including labour rights. Dedicated support is also provided to strengthen public financial management for a more optimal collection of domestic revenues and use of the available state budget, targeting priority services for citizens while addressing the country’s high public debt and restoring macroeconomic stability. Specific actions include:
- Partnering and funding civil society organisations (CSOs) as key actors for inclusive national development.
- Increasing citizen engagement in national development by improving civil society’s enabling environment and operational capacities, strengthening parliamentary functions, and implementing accountability obligation and the rule of law.
- Empowering women and girls socially and economically, and targeting ethnic groups, leaving no one behind.
- Promoting green action and circular transitions by empowering civil society, media, and communities to raise awareness, support sustainable livelihoods, and advance climate-smart agriculture, biodiversity protection, and plastic reduction, while ensuring access to information and fundamental freedoms.
- Supporting young entrepreneurs and micro, small, and medium enterprises in the Lao tourism value chain.
- Contributing to the prevention and elimination of child labour and human trafficking, and to the fight against corruption and impunity.
