Poverty eradication has long been an integral part of the Lao PDR’s national policies and priorities, the government has emphasized its strong commitment and put its utmost efforts to graduate from the Least Developed Countries status since 2000s. The triennial review by the Committee for Policy Development (CDP) in 2018 found that the Lao PDR met the thresholds for the LDC graduation for the first time, by meeting two out of three criteria for graduation, and in 2021 the Lao PDR met the thresholds for the LDC graduation again for the second time, by meeting all three criteria for graduation from the LDC status.

    Nevertheless, the prolonged impact from the COVID-19 pandemic, exacerbated by the on-going economic and financial constraint and other global and regional crisis have severely affected the global development aspiration, including the Lao PDR, such impacts have further imposed even more complication and immense challenges and obstruct the development path, in particular the effort to recover the economy and the development momentum of the least developed countries. In this context, the General Assembly has adopted the resolution A/RES/76/8, dated 29 November 2021, Graduation of Bangladesh, the Lao People’s Democratic Republic and Nepal from the LDC category with an exceptionally extended preparatory period of five years from the standard period of three years. This means that the Lao PDR will have its preparatory period to graduate from the LDC status by 2026. The United Nations also invites and encourages the Lao PDR to prepare, during the five-year period, its national smooth transition strategy; and the CDP will review the Lao PDR’s progress again at its 2024 triennial review. This will allow the country to best position itself for the smooth, quality and sustainable graduation, thereby, ensuring that it will not slip back to LDC after graduation. Importantly, the UN agencies and the international community remain committed and has the obligation to continuing support and assist the LDC countries until their official graduation.

    Although substantial progress and achievement were made over the past years, the Lao PDR may face inevitable challenges after its graduation from LDC category, including the loss of LDC-specific support measures on trade, access to grants and concessional loans, and declining of official development assistance (ODA), as well as the support for participation in international forum. At the same time, after graduation the Lao PDR would no longer benefit from ceilings and discounts applied to LDCs in the determination of countries’ mandatory contributions to budgets of the UN system and other international organizations that the Lao PDR is accredited to.

    Having recognized these circumstances, the Party, the Government and the entire Lao people remain committed and determined to strengthening its ownership and enhancing its self-reliance and self-strength in all areas in the up-coming years, particularly in the areas of economic infrastructure improvement, quality human resources development, enhancing capacity-building and domestic product capability and efficiency in order to increase its regional and international competiveness. Furthermore, graduating from the LDC category will enhance the country’s overall international image, including in the global arenas, as well as in terms of trade and regional and global economic integration by providing more confidence and attracting more foreign investors to invest in the country, thereby, creating more job opportunity, allowing new investment projects and contributing to the country’s economic growth toward green and quality development direction.

    Against this backdrop, the government has developed the National Smooth Transition Strategy for LDC graduation in 2026 and beyond, in collaboration with the United Nations and development partners, with the aim to prepare the Lao PDR for a smooth, quality, sustainable, and irreversible graduation. This includes the continuation of the enhanced international support measures that meet the development needs of the country by prioritizing essential investment and building capacities from now until 2026, in line with the implementation of the 2023 Agenda for Sustainable Development and the National Socio-Economic Development Plan in each period. In this regard, the STS is a strategy that serves the Lao PDR’s long-term objective to graduate from the least developed countries, including its development vision after post-graduation. Specifically, the STS aims to accelerate the Lao PDR’s development progress in moving toward the direction of quality, focused, green and sustainable growth. Therefore, the strategy has consolidated and prioritized the existing actions from other national development frameworks that are considered necessary for a successful graduation, and align with the Lao PDR’s LDC graduation timeframe set by the UN, by emphasising in the areas of finance, macroeconomic, social, environment and disaster management.

    For the Lao PDR, graduating from LDC category in a smooth, quality and sustainable manner has been a long-term objective of the Party and the Government, and meeting the LDC graduation thresholds has clearly reflected the Lao PDR’s active and strong commitment to implementing the international agreed agenda. Nevertheless, graduating from LDC does not mean that the mission to eradicate poverty will end and it does not reflect that people will be immediately well-off, but rather reflects a significant achievement and milestone in the socio-economic development of the country under the leadership and guidance of the Party and the Government of the Lao PDR.

    Recently, the Triennial Review by the CDP in 2024 (March 2024) has reviewed that the Lao PDR continued to meet all least developed country criteria for the third time (2018, 2021, and 2024) and is making progress towards sustainable graduation. This means that the Lao PDR is on-tracked to graduate from the status as planned.