The Development Academy of the Philippines (DAP), the focal organization for the APO Center of Excellence on Public-Sector Productivity, continues its in-depth exploration of governance dynamics across APO member economies. In this edition, we delve into Lao PDR’s unique public sector landscape.
According to the Asian Development Bank’s Lao PDR Country Partnership Strategy 2024–2029, Lao PDR is set on transforming itself into the “battery of Asia” while redefining its landlocked status as “land-linked” through strategic connectivity investments with neighboring economies. Capital-intensive investments in hydropower, mining, and transport have spurred robust growth averaging 8% annually through 2016—yet this rapid expansion has also driven rising public debt and increased vulnerability to economic and climate shocks.
Economic diversification remains constrained as the nation largely depends on a narrow export base of minerals and energy, with external demand driving growth while domestic demand and employment show signs of stagnation. Recent macroeconomic pressures, including soaring inflation and a rapidly depreciating kip, have further strained fiscal space and hindered efforts to enhance human capital investments and social sector spending.
