UNDP’s new Global Human Development Report (GHDR), released on 13 March 2024, shows that the Human Development Index (HDI) in Lao PDR has undergone improvements in 2022, but the overall human development trajectory remains below historical trends and the average HDI for the Asia Pacific region. Gender inequality is a major contributor to the inhibition of human development in Lao PDR. A key metric of the HDI, measuring gender gaps, the Gender Inequality Index (GII) for Lao PDR continues to be well below the levels of 2020. There are significant gaps in income and labour force participation. Estimated Gross National Income per capita (2017 PPP) for women was reported to be 30 percent lower compared to men, while women lagged 9.3 percentage points behind their male peers in labor force participation.
Gender inequalities in the labor market significantly undermine development opportunities for Lao PDR. According to UNDP’s National Human Development Report (NHDR) from 2022, Lao PDR entered its demographic dividend window in 2015, and an estimated 80,000 youths are expected to join the labor force each year in the next two decades. To convert this demographic transition into a ‘demographic dividend,’ finding meaningful jobs that result in raising their productivity, ensuring their health, and continued education will be of paramount importance. Women comprise half of this labor force. Persistent economic disparities and structural barriers women experience in contributing to the formal economy and in earning decent incomes may hinder the realization of a demographic dividend. A report estimates the time horizon for a demographic dividend in Lao PDR using two methods and concludes that Lao PDR has already surpassed 60 percent of the demographic window of opportunity. Urgent action is required to ensure policies are put in place so youth have access to skills, knowledge, and the means to meaningfully contribute to Lao PDR’s economic growth.
The NHDR highlights that while economic growth was achieved in the past decades, it was primarily driven by capital-intensive sectors such as mining and hydropower. This growth model was characterized by a failure to create meaningful livelihood opportunities. As the full realization of growth models breaks dawn, the country is at the cusp of an economic crisis, with falling revenue and rising debt pushing unemployment and inequalities even further. Whether this crisis can be turned into an opportunity to address structural problems and to recalibrate Lao PDR’s growth pathway remains to be seen. A big part of addressing these structural barriers should include removing unequal access to labour markets, particularly for women. It is within this context that UNDP jointly with UNFPA embarked on this research journey. The purpose of this research paper is to provide evidence for dialogue and advocacy, making the case that investing in women and girls is necessary for Lao PDR to achieve its demographic dividend and economic diversification ambitions.
