Overview of Australia's aid program to Laos

How we are helping

2013/14 Actual:
$58.5 million

2014/15 Budget Estimate:
$55.6 million

Australia is one of the largest bilateral donors to Lao PDR, and we work in areas critical to Laos’ long-term development and economic growth, including trade and investment reform, education and rural development. Australia’s support will help Laos continue to develop as a stable, well-managed and increasingly prosperous regional neighbour with growing economic links with Australia and the region.

Laos is making steady progress in reducing poverty but remains one of the poorest countries in the Mekong region. Like its neighbours, Laos is achieving strong growth, particularly in urban areas, driven by a wide-ranging reform agenda, demand for natural resources and its transition to a market economy. Despite the economic and social gains, poverty is widespread and its causes are increasingly complex. Around 23 per cent of the population live under the national poverty line. Twenty seven per cent of children under five are underweight and 44 per cent have stunted growth.

Australia has been a key partner in Laos’ development over the last 60 years. Our support is guided by the Australia-Laos Development Cooperation Strategy 2009-15. We work in partnership with multilateral development agencies, other donors, the private sector and civil society organisations.

Education and skills development

Supporting better education outcomes, particularly in basic education, is fundamental to development in Laos. Education is the flagship of Australia’s development cooperation partnership with the Lao PDR. Australia delivers support in partnership with multilateral development agencies and other donors to build schools, train teachers, strengthen school management, provide learning resources and school-based feeding programs.

The Government of Laos has placed priority on building its human resource capacity to address existing skills gaps to sustain social development and economic growth. Australia supports human resource development in Laos at the individual and institutional level to address existing shortages in skilled labour and to improve the delivery of basic services.

More information on education and skills development in Laos

Economic development

The extent to which Laos can facilitate and sustain private sector growth will increasingly determine its success in development and reducing poverty. Australia is supporting private sector growth and opportunities for small- and medium-sized enterprises through improving the trade and investment environment. We continue to support Laos’ integration into the regional and multilateral trading system, and we are working to address some of the policy and institutional impediments to trade and investment in sectors identified as having the ability to promote inclusive growth.

Around 80 per cent of poor people in Laos live in rural areas. Australia works to improve rural economic development by focusing on improving livelihoods and food security through access to savings and credit services, social transfers, and micro-enterprise support. We also improve access to markets and basic services through support for rural infrastructure such as road access, irrigation and dams, water supply and sanitation and other productive infrastructure.

In addition to our bilateral program, Laos also benefits from Australia’s regional investments. For further information, refer to the East Asia Regional page.

More information on economic development in Laos

Our results

Results for 2013-14

Education and skills development:

  • Construction of 393 classrooms in 81 primary schools
  • Training provided to 487 school principals, 2,343 teachers and 1.043 Village Education Development Committee members
  • Provision of nutritious school meals to 50,172 students (24,082 girls) living in the most food insecure districts
  • Provided a total of 50 long-term Australia Awards
  • 70 scholarships were granted to students from disadvantaged backgrounds to study at a Lao university.

Economic development through trade facilitation and rural development:

  • Established a business assistance facility to help Lao businesses develop export growth plans
  • Services trade regulatory assessment commenced which will identify measures to support services trade growth
  • More than 9,500 people increased their production of and access to food due to rice banks and irrigation systems
  • 10,989 additional people have increased access to financial services
  • 877 hectares of land cleared of unexploded ordnance and released benefiting more than 70,000 people.


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).