China’s experience in poverty alleviation provides useful reference for Laos as the Southeast Asian nation strives to lift more people out of penury, especially in rural areas.

Laos has seen its poverty rate more than halve in less than 30 years, falling from 46 percent in 1993 to 18 percent in 2019, according to the World Bank

Experts said the landlocked country, which remains one of the poorest in the region, should build on its existing cooperation with China to tackle socioeconomic challenges, which have been exacerbated by the COVID-19 pandemic.

“China is the first country to achieve the first Millennium Development Goal. It is very impressive and there are many things to learn from China’s experience,” said Phouphet Kyophilavong, associate professor and dean of the Faculty of Economics and Business Management at the National University of Laos.  

One thing that Laos can learn from China is continuous economic reform and innovation to promote growth, he said. 

China’s policymakers try to ensure that “even the poor can … benefit from the economic growth,” Kyophilavong noted. 

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China announced in February that all the 98.99 million impoverished rural residents living below the poverty line have overcome poverty. It is also the first country to achieve the United Nations Millennium Development Goal of poverty reduction in a record 10 years. 

The Asian giant has been sharing its experience with other countries in recent years, including Laos. On March 30, construction began on China-aided rural poverty alleviation facilities in Laos, according to information on the website of the Chinese embassy in Vientiane, the capital of Laos. 

At the ground-breaking ceremony, Chinese Ambassador to Laos Jiang Zaidong said Beijing has been proactively participating in global poverty reduction efforts. Citing a World Bank report, he said the China-led Belt and Road Initiative could lift 7.6 million people from extreme poverty and 32 million from moderate poverty globally. 

In 2014, China proposed the Initiative on Cooperation on Poverty Alleviation in East Asia during an ASEAN Plus Three Summit, with relevant projects in Laos, Cambodia and Myanmar. Under the initiative, China and Laos have been carrying out poverty alleviation projects in Ban Xor village, some two hours’ drive north from Vientiane, and in another village in the northern town of Luang Prabang since September 2017, according to Xinhua News Agency. 

China announced at the 23rd ASEAN Plus Three Summit held in November last year that it will continue carrying out poverty alleviation projects in the three Southeast Asian countries. 

ASEAN Plus Three refers to the Association of Southeast Asian Nations, plus China, Japan and South Korea. 

Noting that it is good for Laos and China to cooperate on the poverty issue and tackle the challenge together, Kyophilavong pointed out that Laos has also made significant progress in poverty reduction and that China’s experience will be helpful in achieving further gains. 

For example, he said Laos needs to focus more on education, ethnic minority groups, infrastructure development and increased participation of the private sector. 

Laos has seen its poverty rate more than halve in less than 30 years, falling from 46 percent in 1993 to 18 percent in 2019, according to the World Bank. 

In February, Laos was recommended by the United Nations Committee for Development Policy to graduate in 2026 from the least developed country category with an extended five-year preparatory period.

Jakapong Prapanjit, program manager of Sustainable Development and Responsible Investment Program at global anti-poverty charitable organization Oxfam in Laos, said Laos’ progress in poverty reduction can be mainly attributed to foreign investments and improved infrastructure in rural areas, in addition to better welfare and government services that are being provided to a wider population than before. 

However, Prapanjit said the pandemic has slowed down the country’s poverty reduction progress, especially in terms of non-farming employment. He said this is because many people, especially those in the tourism and service sector, have lost their jobs during the pandemic. 

Households in rural areas were also adversely affected as the pandemic forced many migrant workers to return from nearby countries, said Prapanjit. 

More than 140,000 migrant workers returned home to Laos between March 20 and October 30 in the wake of the pandemic, according to a report by the International Labour Organization, which cited data from Laos’ Ministry of Labour and Social Welfare.

Khamphy Khammavong, program manager of Oxfam’s Citizen Participation and Civil Society Development and Gender Justice Program, said the government should improve social protection to minimize the impact of the pandemic on the poor. 

Because of the impact of the pandemic, Laos is now is very open, and welcomes support or any input or projects from outside, said Khammavong. He said Oxfam is planning to support the development of Laos through different programs, including helping develop skills of the migrant and informal workers. 

His colleague Prapanjit said the biggest contribution from China to Laos’ poverty alleviation efforts is investment, as it creates jobs, improves infrastructure and helps with GDP growth. 

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To help promote responsible investment among foreign investors and make sure the projects can benefit the local community, Prapanjit said Oxfam is working with different partners, including the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, to promote guidelines and engage with investors. 

Seeing poverty alleviation as one of the most important cooperation areas between Laos and China, Kyophilavong from the National University of Laos said there is still a lot of room for the two countries to further enhance their mutual engagement. 

Most importantly, the two countries need to focus more on how to cooperate and maximize the benefit of the China-Laos railway to promote economic growth and poverty reduction in the Southeast Asian country, Kyophilavong said. 

As a major project between China and Laos under the BRI, the 422-kilomter China-Laos railway runs from the Boten border gate in northern Laos, bordering China, to Vientiane with an operating speed of 160 km per hour. The project started in December 2016 and is slated to be completed and operational by the end of this year.