Laos Development Cooperation

Laos Imported goods in Vientiane

Foreign policy

The government is increasingly trying to use the forces of globalization and regionalization in alliances such as ASEAN, AFTA and, since February 2013, the WTO. From the membership in ASEAN since July 1997, Laos hopes, in addition to growing acceptance within the region, increased economic and financial development and strong Asian allies.

At the same time, Laos is trying to counter the strong one-sided Thai influence by integrating it into the Southeast Asian community. In 1997, Laos was drawn into the economic crisis due to its dependence on Thailand. Due to recurring incidents such as the Hmong problem, the relationship with Thailand remains ambivalent.

According to ehealthfacts, there are close ties between Laos and Vietnam due to the decades-long “liberation struggle”. The 25-year friendship treaty with Vietnam was extended for another 25 years in 2002. The growing Chinese influence is clearly evident in the financing of large projects and the increasing presence of the Chinese in Laos. The population is ambivalent about the growing number of Chinese in the country.

Both “brother countries” China and Vietnam are fighting their power struggles by trying to exert influence in Laos and are trying to secure a say in important decisions in Laos. Both Vietnam and China each have their supporters within the Laotian party leadership, which in turn tries to strategically play off the two neighbors against each other or to integrate them through major projects.

Since 2004, Laos has maintained normal trade relations with the USA again. In 2010, Vice Prime Minister Thongloun Sisoulith visited the United States. During the historic visit, which was the first since 1975, human rights organizations criticized the fact that the issues of civil society and human rights as well as the current problem with members of the Hmong were not discussed. This was followed by regular mutual visits, and in 2016 Barack Obama visited Laos.

In the meantime, the Laotian government seems to have taken a liking to major events. In October 2012 the 9th Asia-Europe People’s Forum (AEPF) took place in Vientiane, shortly afterwards the Asia-European ministerial meeting (ASEM summit). In 2016, Laos chaired the Southeast Asian community of states ASEAN and was thus responsible for around 800 meetings in the country.

Laos Imported goods in Vientiane

Bilateral development cooperation

Foundations of development cooperation with the partner country Laos are the guidelines of German development policy. The focus of the projects & programs is on the following topics:

  • Sustainable economic development with a focus on vocational training, market integration and microfinance
  • Rural development focuses on improved land management in the Mekong region as well as ” land management and decentralized planning “

Laos is still one of the “Least Developed Countries” ( LDC) in the world and receives many of the services as grants.

The Federal Ministry for Economic Cooperation and Development (BMZ) coordinates the state development aid projects in Laos.

At government negotiations in September 2018, Laos was pledged a total of 50 million euros for 2018 and 2019. Of this around 30 million for financial cooperation and 20 million for technical cooperation. Of the total amount, 10 million are earmarked as a special commitment for reconstruction after the flood disaster in July 2018.

(2016/17: 45.8 million euros; 2014/15: 50.3 million euros, in 2012/13 the BMZ pledged a total of 58.8 million euros, which almost doubled compared to the 31.3 million euros for 2010 and 2011 meant).

The focus is on economic development and rural development. Above all, the poorer part of the population, who previously did not participate in the increasing prosperity, should now participate more.

  • Framework conditions in the Laotian forest sector are to be improved with innovative approaches
  • The development of a civil society and the improvement of the participation of the rural population, who are directly affected by dam construction and mining measures, are focused and supported.
  • In the case of dam projects with cross-border effects, neighboring countries should be more closely involved in decision-making processes
  • German-Laotian development cooperation should in future be designed to include disabled people, ie people with disabilities should be more involved in development cooperation measures and benefit from them.

Implementing organizations of German government development cooperation:

  • GIZ (since January 2011, previously InWEnt, GTZ and DED), GIZ project overview
  • KfW
  • CIM

Non-governmental German implementing organizations include

  • Care
  • Welthungerhilfe (WHH)
  • Hanns Seidel Foundation
  • bread for the World

The German Adult Education Association (dvv) has been active in the education sector with its own regional office in Laos since 2009.

Multilateral development cooperation

The Sustainable Development Goals (SDG) have been in effect since September 2015.

The Millennium Development Goals (MDG) adopted by the United Nations in 2000 were implemented in a National Growth and Poverty Reduction Program (NGPES). A special feature in Laos was a Millennium Development Goal 9: reducing the impact of unexploded duds (UXO).

The progress of the MGDs and the link with the national development plans are shown on the UNDP website.

Support is primarily provided for projects in the following areas:

  • Poverty Reduction & livelihoods
  • Governance
  • Natural resources, climate change and disaster risk reduction
  • Unexploded Ordnance / UXO

One of the cross-cutting issues are projects on the topic of women’s empowerment.

The projects of the World Bank (WB) and the Asian Development Bank (ADB) and the International Monetary Fund (IMF) are coordinated with the government strategy and focus above all on poverty reduction, social integration and improved governance.

In 1997 the EU laid down the framework for cooperation between the EU and Laos in a cooperation agreement. The country strategy paper 2007-2013 (EUR 69 million) focused on stabilizing the economy, fighting poverty and good governance. The EU’s program for Laos (2014-2020) is EUR 207 million and focuses on nutrition, education and governance, cluster bomb clearance, gender equality and climate change.

Since 2016, the European partners (EU, EU countries and Switzerland) have been working more closely together through the Joint Programming (2016-2020). A delegation of the European Commission in Laos has existed since 2003, since September 1st, 2016 there has been a full-fledged diplomatic mission of the EU in Laos.