Strengthening Social Protection: Building a Resilient Future for Lao PDR

The achievements of Lao PDR's development model are impressive, but there is a growing recognition that not all segments of society have benefited equally. While economic growth has lifted many out of poverty, significant disparities persist, with half of the country’s children lacking access to essential services like education, healthcare, and adequate living conditions. Income inequality has risen over the years, and despite notable progress in human development, recent gains have slowed.

These gaps highlight the importance of ensuring that future development efforts are inclusive and leave no one behind. Important steps have already been taken to address these disparities, but there is a critical need to accelerate efforts, particularly in social protection. By doing so, the nation can better protect its citizens from economic and climate shocks and create a more equitable society.

Lao PDR's journey toward inclusive growth is occurring at a time of heightened vulnerability. The impact of global challenges such as climate change, economic uncertainties, and geopolitical shifts is being felt across the region. In addition, recent events, like the floods following Typhoon Yagi, have underscored the need for robust systems that can respond to natural disasters and protect those most affected. The country’s proactive steps in disaster prevention, preparedness and response demonstrate a clear commitment to building resilience in the face of these challenges.

A significant area where Lao PDR can enhance its resilience is through strengthening social protection. Investing in social assistance schemes is essential to prevent families from slipping back into poverty due to unexpected economic shocks, climate-related crises, or health emergencies. Informal workers, who constitute a large portion of the country's workforce, are especially vulnerable. Expanding social security coverage to include these workers would be a critical step toward building a more inclusive system that ensures protection for all, regardless of employment status. Harmonising services to ensure that social assistance and welfare is equitable across vulnerable groups such as persons with disability, children, elderly and victims of Unexploded Ordinance (UXO) is equally critical.

The Government has already laid a strong foundation with the introduction of the National Social Protection Strategy in 2020 and the establishment of the National Social Protection Committee in 2021. These efforts mark significant progress in improving the coherence and coordination of social protection initiatives. The creation of Provincial Social Protection Committees is another positive step towards ensuring that local needs are addressed effectively, bringing support closer to communities across the country.

However, enhancing social protection requires more than just policies; it demands strategic investments and innovative solutions to close existing gaps. Currently, the allocation to social protection and public healthcare stands at a modest percentage of GDP, which is lower than some of Lao PDR’s regional peers. Creating fiscal space is critical to ensure that essential services are accessible to all, particularly in rural areas.

There is a clear opportunity to enhance the financial sustainability of social protection programs by exploring domestic funding mechanisms and fostering stronger partnerships with development partners. As Lao PDR prepares for its expected graduation from Least Developed Country status, securing sustainable financing for social protection will be vital to maintaining the momentum in poverty reduction and human development.

Governance and data systems also play a crucial role in the effective delivery of social protection services. Efforts are underway to streamline these systems, but coordination among different ministries and agencies could be further strengthened. A more integrated approach would help ensure that eligible citizens receive the full range of benefits and services they are entitled to, reducing any gaps in support.

The National Assembly's upcoming discussions on amendments to the Social Security and Health Insurance Laws present a timely opportunity to address key issues related to funding and management. By prioritizing social protection in its national development agenda, the Government can lay a solid foundation for a more resilient and inclusive future.

Looking ahead, it is crucial to integrate social protection priorities into the National Socio-Economic Development Plan (NSEDP) for 2026-2030. This integration will not only provide a strategic direction for the sector but also ensure that social protection remains a central focus in the country’s broader development agenda. Enhancing dialogue and coordination between government entities and development partners will be essential in making this vision a reality.

The National Social Protection Strategy serves as a guiding framework for the sector, promoting a unified vision for social protection in Lao PDR. While some institutions and partners may have different definitions of social protection, the strategy provides a common goal that can drive efforts towards a cohesive, data-driven approach to supporting the nation’s most vulnerable groups.

As Lao PDR continues its development journey, strengthening social protection systems will be vital in safeguarding the progress made so far. By investing in inclusive and age-appropriate policies and resilient social protection schemes, we can ensure that every citizen has the opportunity to thrive, regardless of their circumstances. As we mark the International Day for the Eradication of Poverty, we are reminded of our collective responsibility to act together for just, peaceful, and inclusive societies.

The Lao Government’s proactive efforts in improving social protection demonstrate a strong commitment to this goal. By building on these achievements, Lao PDR is well-positioned to create a future where economic growth is shared by all, and every citizen can look forward to a more secure and prosperous life.

Authors 

H.E. Baykham Khattiya, Minister, Ministry of Labour and Social Welfare, Government of Lao People's Democratic Republic.

Martine Thérer, UNDP Resident Representative 

Xiaoyan Qian, Director, ILO Country Office for Thailand, Cambodia and Lao People's Democratic Republic

Bilal Aurang Zeb Durrani, UNICEF Country Representative