Laos after graduation from Least Developed Country status

• Published in: Journal of International Development Studies Vol. 32; no. 3; pp. 5 - 18
• Main Author: Punya, Supitcha
• Format: Journal Article
• Language: English
• Published: The Japan Society for International Development 30.03.2024
• Subjects: Laos; Laos's development; Least Developed Country; The international community
• ISSN: 1342-3045; 2434-5296
• DOI: 10.32204/jids.32.3_5

Graduating from Least Development Country(LDC)status has been the resolution of the Lao People's Democratic Republic(Lao PDR or Laos)since the year 2000. As an aid-dependent country, this resolution seems difficult to achieve without development assistance from and supervision by the international community. Yet in 2021, Laos astonished the world and succeeded in meeting the three criteria required to transcend LDC status, transiting to a five-year promotion preparatory period. This paper wishes to examine the potential consequences of graduation. It argues that the Lao government can be hit by three dilemmas in dealing with the consequences of graduation. The first dilemma may arise from internal economic fluctuation as a result of the global pandemic and the Russo-Ukrainian war. Many Laotians have lost their jobs, inflation is rising rapidly, and social inequality remains problematic and intractable. The second dilemma arises from Laos losing the economic benefits the international community provides to countries with LDC status. This loss of benefits can presumably re-shape its relationship with the international community and redirect its priorities towards acquiring more Chinese development assistance. The last dilemma is from the Lao state capacity itself. Lastly, this paper aims to imagine scenarios in which the Lao government can deal with these dilemmas and survive the consequences of surpassing LDC status.