Yula.la News

2020 was an intense year for many people across the world. The effects of the Covid-19 pandemic not only threatening the physical health of individuals but also the emotional and financial aspects as well. Businesses that were unable to maintain their business activities due to social distancing have either had to close down or maintain their operations at lower costs. This means many companies had to reduce their staff numbers – causing an influx in unemployment throughout the country.

Tourism, one of the main economic boosters in Lao PDR has continued to be halted – hotels, hostels, brick and mortar shops, and popular tourist destinations continue to have vacancies and less foot traffic until borders open again.

Although domestic tourism still continues and is helping level out further profit losses across the tourism industry – it does not compare to the number of international tourists and backpackers that were visiting Laos before. In this current state, the unemployment rate in Laos increased to 20% which is a 10.6% increase compared to 2017. The target for Laos 2020 economy percentage growth was 6.7% and only was able to reach 3.3%.

The pandemic forced thousands of overseas Lao students and workers to return home.

On January 13, Prime Minister Thongloun Sisoulith for the 11th Party Congress discussed the need for further skill development for domestic workers in Laos. He referred to the results of a labor survey conducted in 2017.

- Laos had 4.7 million people out of 6.9 million people in its total workable population who can be employed.

- The labor force had a total of 1.95 million people or 40.8 percent of the people employed, but only 1.75 million of them had been hired, with an unemployment rate of 9.4 percent.

- Mr. Thongloun said the Covid-19 outbreak increased the unemployment rate in Laos to 20 percent in 2020.

“The high rate of unemployment had become a key issue for the government, which is now seeking proper solutions to the problem over five years. Various mechanisms have been put in place to resolve this problem by focusing on restoring and stabilizing the economy, strengthening micro, small and medium enterprises, effectively enhancing the business and investment environments, and boosting the tourism industry, agriculture and industry.”

There is more focus on e-commerce related activities with financial support opportunities. As the pandemic continues, more businesses are finding ways to practice social distancing from their homes or offices by increasing their usage of e-commerce. Brick and mortar shops that were once financially stable from international tourists' foot traffic are exploring e-commerce platforms and Facebook businesses to penetrate the domestic market and increase brand awareness to international shoppers. Although more skill development is needed, there is an opportunity for businesses who have knowledge and experience with logistics, online payments, and website/social media development and management.    

The government will promote the hiring of new employees in the economic sectors for the rural, urban, and overseas labor markets. They will focus on decreasing the influx within the unemployment rate down to 15% by 2026, reducing by 1% each year.

“The Vice President of the Lao National Chamber of Commerce and Industry (LNCCI), Mr. Daovone Phachanthavong, stated to Vientiane Times the key factor that could help increase employment in the near future is to attract more foreign direct investments to implement large scale projects. This can help boost the economy and provide more job opportunities for the management and implementation of these projects.  

Mr. Daovone also stated the development of the MSMEs sector can create a lot of jobs. According to the government’s plan, it has set a growth rate of 2% a year for such enterprises. This expansion is expected to contribute 18% to gross domestic product.

Reference Manichanh Pansivongxay