Seminar on Social Protection Policy and Financing for National and Provincial Assemblies in Lao PDR

Distinguished guests and esteemed colleagues,

Ladies and Gentlemen,

Sabaidee ton sao, tuk-tuk tan!

It is my pleasure to represent the United Nations in Lao PDR at the Seminar on “Social Protection Policy and Financing” today, for members of the National Assembly and Provincial Assemblies, Social and Cultural Affairs Committee in Lao PDR.

Across the world, underpinning a more inclusive and equitable society, there is consensus that building nationally owned, effective, inclusive and sustainable social protection systems is critical to the achievement of the 2030 Agenda for Sustainable Development that leaves no one behind.

Expansion of social protection is increasingly being recognized by countries as a critical strategy for poverty reduction and inclusive growth.

Allocating domestic resources to social protection programmes, such as non-contributory cash transfers, can ensure that such programmes are sustainable, as opposed to a donor-focused, project-based approach.

Under SDG 1 on No Poverty, the Target 1.3 explicitly calls for the establishment of social protection systems for all, prioritising the poor and vulnerable.

This is also set out in the Government’s priorities, with the 9th 5-year National Socioeconomic Development Plan having an output on social protection.

In line with SDG target 1.3, the National Social Protection Strategy sets out a vision that by 2030, the welfare of all Lao people will be safeguarded by a basic social protection floor. And it sets goals for the improvement in the existing social protection system, both in terms of coverage and services provided.

In all our work at the UN and our cooperation programmes, as we support the Government and partners in Lao PDR, the National Social Protection Strategy remains a vital framework to align our efforts and a foundation for an inclusive approach in the social protection sector.

Building a comprehensive national social protection system can help to mitigate the impact of crises, support economic recovery, and increase resilience to future shocks and natural disasters.

Over the past two-and-a-half years, we have encountered challenges that have had a considerable impact on the pace of development.

We live in a world where events beyond our control can wreak havoc on livelihoods and opportunities without warning.

We know that the COVID-19 pandemic has had an unprecedented impact on the incomes of many households, especially in the vast informal sector which comprises most of the Lao Workforce with an estimated 83% of total employment by the last Labour Force Survey from 2017.

In May this year, a World Bank rapid phone survey reported that 54% of family businesses had lower revenues than they were prior to the pandemic.

And also, that border closures and movement restrictions within the country could have pushed up to 215,000 people into or back into poverty.

And moving beyond the pandemic, the population is now faced by another economic crisis marked by a rapidly increasing cost-of-living.

Such crises, as we well know, affect the poorest and most vulnerable people the most, whose level of resilience was already weakened by the pandemic.

The World Bank survey also reported that 86% of households were affected—with as many as 52% significantly impacted—by the escalating inflation that started in earnest in January this year.

65% of households also reported that they have had to reduce education and health spending to cope with inflation.

In addition, many households reported a need to reduce food consumption, switch to cheaper food, hunting and gathering, or resorting to self-production to make ends meet.

In times of crisis, social protection, if receiving sufficient attention and investment, can act as a powerful social and economic stabilizer.

It can contribute to stabilizing the economy and to ensuring social stability.

When a particular set of conditions are met, cash in the hands of the poorest members of society provided through stat systems can ensure that they continue to spend money on their basic needs, a measure that also supports local and national economies.

In the times of crises, such measures can also help address social tension and paly a critical role in crisis response.

But such results cannot be achieved through ad hoc and donor-funded interventions alone.

I would like to make three observations here:

• It is essential for all of us to address the question of how, over time, national and external investments in the social protection system can sustainably finance it.
• A strong social protection system takes several years—even decades—to build. Over time, as fiscal resources in Lao PDR gradually become available, social protection programmes need to be continuously improved, to progressively cover more people and provide better services and higher benefits.
• The most efficient response is to build and expand nationally owned structures and systems. In the long term, such a response can lead to more sustainable impact, by making the most efficient use of available resources.

It is my sincere hope that the seminar will offer opportunities for discussing these questions.

In this context, I would like to share that over the past two-and-a-half years, we have been working jointly with national, provincial and district government authorities; civil society and academia under a UN Joint Programme, to deliver integrated support to the implementation of the National Social Protection Strategy.

One of the actions of this Programme was to design and pilot a cash grant—known as the Mother and Early Childhood Grant—to pregnant women and infants in 3 districts in southern Lao PDR.

As part of this pilot, many of the underlying systems, infrastructure and procedures were established for the very first time—including how to identify and registrate beneficiaries, how to conduct the payment of cash, and monitoring the status of the cash transfers and health check-ups to beneficiaries.

The pilot provided valuable opportunities for us to see which systems, procedures and structures that work and how to improve them. I hope that it will also offer lessons on how to scale up or implement new social protection programmes in the future.

While the pilot is an integral component of the National Social Protection Strategy, we as the UN stand ready to support the National Assembly, Government, and other partners in their mandated areas of contribution – whether legislative, managerial or implementation – to establish the building blocks needed to realise social protection for all.

Such key building blocks include the important milestone of 9 December 2021, with the setup of a National Social Protection Commission, with the primary responsibility to coordinate, oversee and monitor the National Social Protection Strategy. This Commission is now actively working to deliver on its mandate.

In 2024, Lao PDR aims to amend the Social Security Law—with one of the objectives being increased coverage for the informal sector, and to introduce a new Social Welfare Law—which can help solidify the right to social protection for the poor and vulnerable, and we stand ready to support these processes too.

In conclusion, I would like to highlight the significance—even necessity—of social protection programmes that prioritise the poorest people in society, supporting those furthest behind first.

We are still faced with a daunting challenge of how to continue the work on social protection, which --in an economic environment that has never been more challenging-- has never been more needed.

I wish you a fruitful and successful seminar on these important issues of social protection policies and financing social protection. I also hope there will be opportunities to discuss concrete areas for further joint work, and especially how we can all collaborate together—more and better—with partners from ministries, development agencies and the civil society.

Finally, I would like to express my sincere gratitude to the Government of the Republic of Korea and the Government of Australia for their financial contribution to this seminar.

Working together to build a strong, sustainable, and well-structured social protection system that truly leaves no one behind is something that requires the combined efforts of all actors.

And I would like to emphasize that the UN stands ready to support the National and Provincial Assemblies, the Government of Lao PDR, and other partners in our common goal of providing social protection to all people in Lao PDR.