Overview of Australia's aid program to Laos

How we are helping

2016-17 Total Australian ODA Estimated Outcome
$44.2 million

2017-18 Bilateral Budget Estimate
$20.6 million

2017-18 Total Australian ODA Estimate
$42.3 million

Australia and Laos are celebrating 65 years of diplomatic relations in 2017 and share a strong and diverse relationship underpinned by deepening economic ties, community links and development cooperation.

The Australian Government will provide an estimated $42.3 million in total Official Development Assistance to Laos in 2017-18. This will include an estimated $20.6 million in bilateral funding to Laos managed by DFAT.

Australia has a strong interest in ensuring Laos continues to develop as a stable neighbour that is increasingly well-positioned to contribute to regional security and economic growth. Our aid to Laos aims to build prosperity and reduce poverty, while helping Laos take advantage of economic integration with the region.

Laos has made good economic progress since the introduction of market-based economic reforms in the 1980s. Standards of living have improved for many people but the country still faces significant development challenges. The benefits of economic growth have not been shared equally and some social development indicators remain very weak. Educational opportunities diverge significantly depending on geography, gender, and ethnicity.

Laos' resources sector, led by mining and hydropower, will remain an important engine of growth and trade. However to ensure economic opportunities are more broadly shared in the future, Laos' economic base will need to widen and greater investment in sectors such as agriculture, small and medium enterprise development and tourism encouraged.

Laos' National Socio Economic Development Plan (NSEDP) 2016-20 sets out the country's policy to manage its development challenges. It aims to:

  • 'graduate' Laos from Least Developed Country status by 2020;
  • develop human resources;
  • further economic development;
  • diversify and integrate the economy; and
  • maintain fiscal stability.

Australia's aid supports Laos' development priorities, contributing to inclusive and sustainable outcomes.

Our program directions are outlined in the Aid Investment Plan.

Objective 1: More disadvantaged girls and boys complete a quality basic education

An inadequately educated workforce is a central obstacle to development, employment, and investment in Laos. Implementation of ASEAN Economic Community obligations in relation to freer movement of trade, investment and labour will further increase competitive pressures facing Laos. Education is therefore a priority for the Lao Government and for Australia's aid program.

Building on our longstanding investments, and leadership in the sector, Australia continues to invest in education in Laos through the Basic Education Quality and Access in Laos (BEQUAL) program.  BEQUAL priorities 66 of the most educationally disadvantaged districts to:

  • increase student participation
  • improve the availability of quality teaching (e.g. by providing professional development to existing primary school teachers and teacher educators; and training 520 ethnic males and females to become teachers)
  • improve learning environments (e.g. by providing quality teaching and learning materials and upgrading school infrastructure).

Investments improving basic education participation and quality

Objective 2: Improving Laos’ human resources through scholarships, training and organisational capacity building

Strengthened human resources are essential to Laos' future economic growth and competitiveness and its ability to provide its citizens with the social services required for equitable development. Australian aid supports a human resource development program which builds on the positive results of our longstanding scholarships program (for study in Australia and in Laos).

To address labour market needs, our focus will be on scholarships and training for individuals, as well as supporting Laos to make better use of its existing skilled human resources.

Investments improving human resources in Laos

Objective 3: A stronger trade regime and more competitive private sector

Australia's aid program continues to help Laos integrate into the regional and multilateral trading system. After supporting Laos' accession to the World Trade Organisation in 2013, current work focuses on improving the quality and sustainability of Laos' trade and investment growth, through targeted efforts to:

  • support Laos to implement its WTO commitments;
  • reduce the costs of trade by simplifying procedures at borders; and
  • improve labour standards and skills in export industries such as garments manufacturing.

We also provide financial and advisory support to businesses operating in Laos to improve their competiveness and ability to export, with a particular focus on women entrepreneurs.

Through the Trade Development Facility Phase II, we work to improve the business climate by supporting enhanced public-private engagement and strengthening women-led business initiatives.

Investments strengthening the trade regime and private sector competitiveness

Legacy rural development investments

We will continue to support a number of existing rural development investments under our Aid Investment Plan until their conclusion in June 2019. These investments will provide better access to financial services, and reduce unexploded ordnance contamination.

Investments supporting rural development

Our results

In 2015-16, Australian aid to Laos:

  • supported 217 new teacher trainees, including 140 women, from disadvantaged remote areas to successfully complete their first year of teacher training
  • provided 20 scholarships to teacher educators
  • provided 405 person-days of training for education managers and administrators in the Lao Ministry of Education and Sports
  • provided repairs for 636 sub-standard classrooms
  • developed a new national primary curriculum framework
  • trained 4,162 people in remote districts in community-based contracting for school infrastructure construction, basic water and sanitation and school maintenance supervision
  • provided, through UNICEF, access to clean water and sanitation facilities to 250 schools, benefiting more than 26,000 school children and 9,000 community members in disadvantaged districts
  • provided mid-morning snacks to over 150,000 students living in poor districts
  • helped 259 schools in five provinces access school lunch
  • helped clear 146 hectares of land contaminated with unexploded ordnance, benefiting over 8,500 people
  • provided over 46,000 people with access to small-scale community-based infrastructure
  • improved access to financial services for over 132,000 people
  • helped 30 qualified people undertake a tertiary study in Australia, and
  • helped issue over 30 grants to Lao-based businesses to help increase their sales growth.

Last Updated: 22 September 2017
A group of women plant paddy rice seedlings in a field near Sekong, Laos
A group of women plant paddy rice seedlings in a field near Sekong, Laos (credit: DFAT).
A young boy receives physiotherapy
A young boy receives physiotherapy following an accident that resulted in severe spinal injuries (credit: DFAT).
A man in a canoe, with a bridge in the background
The Friendship bridge built with Australian funding and completed and opened in 1994, crossing the Mekong River and connecting Thailand to Laos (credit: DFAT).