玩偶姐姐

Your Excellency Mr. Saleumxay Kommasith, Deputy Prime Minister and Minister of Foreign Affairs of the Lao People's Democratic Republic,
Honorable Members of the Cabinet
Excellencies, Ladies and Gentlemen 

I thank you for the kind invitation to address you on this important subject of Lao PDR’s graduation from the Least Developed Country (LDC) category.  

I bring warm greetings from the UN Secretary General.  And, I am here as a follow up to the meeting held between the SG and the Hon’ble Prime Minister here in Vientiane last year. 

It’s a pleasure to be in your beautiful country.  And I am very grateful to you for the warm welcome and hospitality extended to me and my delegation since our arrival here.

May I also at the outset, acknowledge the excellent support and collaboration between UN Resident Coordinator Mr. Bakhodir Burkanov, the United Nations Country Team and the Government of Lao PDR throughout this preparatory process.

Excellencies,

We gather here today at a pivotal moment in your country’s development journey. Lao PDR is approaching a historic milestone - graduation from the Least Developed Country (LDC) category. This achievement reflects not only the resilience and determination of your government and people, but also your steadfast commitment to inclusive and long-term national development, despite the complex evolving global landscape.

Let me begin by recalling the words of the United Nations Secretary-General:

“Graduation from the LDC category must be a reward, not a punishment.”

This principle lies at the heart of the Doha Programme of Action and underscores our collective commitment to ensuring that graduation is not a disruption, but a launchpad for deeper, broader, and irreversible development gains.

As we engage in today’s discussion, let us keep this guiding principle at the forefront. Graduation must be viewed as a renewed window of opportunity - a steppingstone toward inclusive, resilient, and sustained development. While it is incumbent upon the graduating country to consolidate progress and build on the gains achieved, it is equally essential that development and trading partners step forward with strengthened support to ensure that graduation does not become a stumbling block, but rather a catalyst in Lao PDR’s continued development journey.

[A Historic Milestone Ahead]

Lao PDR has been a member of the LDC Group since the category was established in 1971. 

Over the past five decades, despite multidimensional challenges, including war, landlocked status, and post-independence state building, you have made commendable progress.

You have demonstrated political stability, economic growth, and improvements in health, education, and infrastructure, which have set the stage for your graduation from the LDC category in November 2026.

The United Nations Committee for Development Policy (CDP) first recognized Lao PDR’s progress towards graduation in 2018, when you met two of the three graduation criteria, namely: Gross National Income (HNI) per capita and the Human Assets Index (HAI). 

By 2021, you fulfilled all three thresholds for graduation - GNI per capita, Human Assets Index, and the Economic and Environmental Vulnerability Index.   Notably, your HAI score saw remarkable improvement.  Along with Bangladesh, you were the only other country to have met all three graduation criteria. 

The CDP in its monitoring report last year, confirmed that Lao PDR continues to meet all three criteria with a GNI per capita of $2,375 – as well as meeting the other human development and vulnerability indicators – a clear manifestation of your country’s progress and growing resilience.

[A Strategic Approach to Graduation]

You will recall that the CDP’s decision to recommend your country’s graduation came during the Covid-19 pandemic.  In recognition of the unprecedented challenges brought on by the pandemic, the UN General Assembly decided to provide Lao PDR with an extended five-year preparatory period to enable a smooth and sustained graduation, to be effective in November 2026.

 This additional time has allowed your government to consolidate progress and prepare for a smooth transition.

I commend the Government for using this extended period effectively, particularly the Ministry of Foreign Affairs, for leading a whole-of-government approach in crafting a comprehensive Smooth Transition Strategy (STS), with support and technical assistance from across the UN Country Team. This Strategy, comprising 22 targeted actions across four pillars - macroeconomic stability, quality trade and investment, structural transformation, and climate and disaster resilience - demonstrates a clear vision for managing the graduation process while laying a solid foundation for the future.

[Achievements and Progress]

Excellencies, 

Lao PDR’s economic trajectory has been remarkable. Between 2015 and 2019, your GDP growth ranged between 5.5% and 7.3%.   Despite the effects of the pandemic, the economy is steadily recovering, with growth projected to reach nearly 4% by 2026 (according to World Bank estimates).

On the human development front, high primary school enrollment (97.7%) and completion rates (93.1%) reflect strong efforts in basic education. Access to electricity is now nearly universal, driven by investments in clean hydropower. These achievements have directly improved the quality of life for your citizens and enhanced national development outcomes.

However, enrolment at secondary education remains low with 67.3% at lower secondary and only 36.2% at upper secondary level – an area which will require attention and more investment.

Meanwhile, the improvement in your EVI score points to greater resilience to external shocks - a vital element for sustaining development post-graduation.

[Challenges and Opportunities]

The path ahead, however, is not without challenges. The lingering effects of the pandemic, climate shocks, global economic uncertainties, and a high external debt continue to pose challenges.

Graduation may also result in some loss of trade preferences and changes to development finance terms.

However, the impact may be minimal.  You may have an average weighted tariff rise of 3 percent, as your trade remains heavily concentrated with ASEAN countries and with China, where duty-free access will continue under existing agreements, such as the ASEAN Free Trade Agreement (AFTA) and the ASEAN-China Free Trade Agreement.

In 2023, out of your $8.4 billion in goods exports, about 34% was to China, while exports to Thailand was 30%, and 17% to Vietnam.

However, graduation will require full compliance with the WTO TRIPS Agreement, ending its current exemptions under Article 66.1, potentially increasing costs in critical sectors such as healthcare. 

Graduation may also affect certain aspects of development financing.
 
While most ODA is expected to continue, there may be slightly less favorable terms on concessional loans from some partners and a gradual shift from grants to soft loans from others, including from IFIs and MDBs. 

Debt management remains a persistent macroeconomic challenge. As of 31 December 2023, your stock of public debt declined from 112% of GDP to 108%.  Restoring sustainability of public finances is one of the most important enablers of a smooth LDC transition – a message that is made clear by the STS. 

It is very important to remain proactively engaged with bilateral and multilateral donors to continue and sustain favorable terms of ODA and other sources of financing. 

Economic diversification remains another important challenge. As noted in the STS diagnostics, Lao PDR's economy is still reliant on a relatively narrow range of sectors and trading partners.

Yet these challenges also come with new opportunities. 

Graduation can enhance international perceptions of Lao PDR as an investment destination and trading partner, which has already led to a 162.37% increase in FDI to $1.67 billion in 2023, and greater access to non-LDC-specific international financing mechanisms. 

Graduation would also strengthen Lao PDR’s position in regional and global trade negotiations, fostering further expansion and deeper integration into regional markets, while showcasing its resilience and readiness for sustainable development. 

As noted in your STS, graduation can help "provide more confidence and attract more foreign investors to invest in the country. This will create more job opportunities, allowing new investment projects and contributing to the country's economic growth toward green and quality development direction".

[Learning from Other Graduating Countries]

Excellencies, Hon’ble Ministers,

The experiences of other graduating and recently graduated countries offer valuable lessons.

Bhutan graduated from the LDC category in December 2023. It successfully aligned its graduation with its national development priorities, emphasizing inclusive growth, poverty alleviation, and sustainability under its 12th and 13th Five-Year Plans. Lao PDR and Bhutan share a striking similarity in their export dynamics, as both nations, are landlocked, and heavily rely on neighboring countries for trade. 

S?o Tomé and Príncipe's graduation in December 2024 demonstrates the importance of structural transformation, focusing on improving human assets and diversifying its economy - shifting from raw commodity exports to higher-value products like processed cocoa.

Lao PDR is graduating in 2026 alongside Bangladesh and Nepal. 

Despite their shared graduation timeline, the three countries face distinct challenges and opportunities shaped by their unique socio-economic contexts. 

Bangladesh, with its large population and a robust industrial base - particularly in export-oriented readymade garments - faces considerable risks from the potential loss of preferential trade access under schemes such as the EU’s Everything but Arms (EBA).

This could significantly impact on its export competitiveness, particularly in key markets. Meanwhile, Nepal’s challenges are compounded by its low per capita income and high levels of multidimensional poverty. 

[Support Measures for Graduating Countries]

Excellencies, 

The United Nations system remains firmly committed to supporting you during this transition and post-graduation progress. 

 We have assisted in the development of the STS and will continue to support its implementation. I am confident that the Graduation Readiness Assessment, jointly developed with the Ministry of Foreign Affairs, will support the objectives of the STS, and serve as a practical guide for the policy transitions associated with LDC graduation. 

The UN Committee for Development Policy (CDP) will continue monitoring Lao PDR's progress through the Enhanced Monitoring Mechanism until 2029, offering an important platform for tracking progress and signaling support needs. I encourage you to fully engage in this mechanism and highlight both your successes, and areas where additional international support will be needed.  

Further, the UN Inter Agency Task Force on graduation, led by my Office, will also be working with your country and the UNCT, to ensure UN system-wide support in your graduation efforts.  

The Doha Programme of Action for LDCs places 'incentives-based graduation' at the center of the graduation discourse. 

 The DPOA provides tools to make that principle a reality: legal assistance for trade negotiations, credit ratings, risk mitigation, and continued access to climate finance.

To operationalize this principle, my Office is mobilizing resources for operationalizing DPOA deliverable such as iGRAD - the Sustainable Graduation Support Facility - to provide targeted assistance across trade, debt, climate resilience, and capacity-building. We are working with development and trading partners to ensure that the ISMs are not withdrawn abruptly rather phased out on a gradual manner to ensure smooth and sustainable graduation.

Crucially, many global support mechanisms - including the Green Climate Fund, Gavi, and the Global Fund - will remain accessible based on vulnerability and income, rather than LDC status. Lao PDR, for example, received $840 million in climate-related development finance between 2017 to 2021.

Additionally, you will retain access to UN travel benefits, the UN Technology Bank for LDCs, and the EBA scheme’s grace period of 5 years after graduation.

Similarly, Lao PDR will benefit from other key deliverables under the Doha Programme of Action (DPOA), including the establishment of an online university, mechanisms for food stockholding, and resilience-building frameworks tailored to the needs of LDCs. 

These measures will play a vital role in enhancing capacity, ensuring food security, and strengthening disaster preparedness as the country transitions beyond LDC status.

Excellencies,

The World Trade Organization has adopted measures to facilitate smoother transition for graduating countries. 

In 2023, the WTO General Council encouraged members to phase out LDC-specific tariff preferences gradually rather than abruptly. 

For Lao PDR, this could mitigate projected export losses from graduation of $734 million by up to 30%. 

Although Lao PDR will lose LDC exemptions for non-agricultural export subsidies under WTO rules, transitional measures under Article 27 provide flexibility to support nascent industries during this critical period.

Moreover, deliverables in the new Programme of Action for the Landlocked Developing Countries offer fresh opportunities. The 3rd UN Conference on LLDCs - LLDC3 - is scheduled to be held from 4-8 August 2025 in Awaza, Turkmenistan. 

As a landlocked country, Lao PDR will be able to tap into various key deliverables of the POA. 

i)    The envisioned establishment of an agricultural research hub should bolster Lao PDR’s efforts to diversify its economy by enhancing productivity and innovation in agro-processing. This is a critical sector for export growth.

ii)    Similarly, the infrastructure investment finance facility will provide much-needed resources to address gaps in transport and energy infrastructure, reducing logistical costs and improving regional connectivity. 

iii)    The Secretary-General’s panel on freedom of transit will further support Lao PDR’s integration into global trade networks. 

Additionally, we are organizing a high-level meeting on “Sustainable Graduation for the LDCs" in Doha, Qatar, later this year. 

For Lao PDR, this platform offers a vital opportunity to tap into the key deliverables of both the DPOA and the Awaza POA; share its Smooth Transition Strategy; learn from other countries' experiences; and secure enhanced global partnerships.

I encourage Lao PDR’s active participation in the LLDC3 Conference in Turkmenistan in August 2025 and in the High-Level Meeting on Graduation in Doha this December. These platforms will help deepen international partnerships, share best practices, and mobilize tailored support.

[Strategic Recommendations for Sustainable Graduation]

Excellencies, 

As Lao PDR approaches graduation in November 2026, several strategic recommendations can ensure a smooth, sustainable, and irreversible transition.  Allow me to briefly share some with you:

First, it would be critical to maintain strong macroeconomic management and to ensure debt sustainability. 

Implementing sound fiscal and monetary policies, strengthening public financial management, and developing a comprehensive debt management strategy are essential to stabilize the economy during the transition period.

Second, accelerating economic diversification and structural transformation must remain a priority. 

Identifying and fostering new sources of growth - particularly in high-value sectors like agro-processing, renewable energy, and digital industries - will enhance resilience to external shocks.

Third, enhancing trade competitiveness and market access is vital to mitigate potential losses from reduced preferential trade schemes, especially with markets beyond this region. 

Upgrading infrastructure, improving compliance with international standards, and negotiating favorable terms under various trade arrangements can offset trade-related impacts.

Fourth, strengthening domestic resource mobilization capabilities is crucial for long-term sustainability. 

As access to concessional financing may decline post-graduation, Lao PDR needs to enhance its capacity to generate domestic resources through improved tax administration, broadening the tax base, digitalization and fostering private sector development.

[And finally], sustained investment in human capital development is essential for economic transformation and competitiveness. 

Building a skilled workforce equipped for the global job market should be prioritized, with particular emphasis on STEM education, technical and vocational training, and healthcare, while addressing disparities across regions and vulnerable population groups.

[Looking Forward: Sustainable Development Beyond Graduation]

Excellencies, 

As your country approaches graduation, our collective attention must focus not only on process but on the broader goal of sustainable development beyond graduation.

Your STS rightly emphasizes that graduation is not an end in itself, but an important milestone in your nation’s development journey. 

Your 10th National Socio-Economic Development Plan (2026–2030) will play a crucial role in shaping your post-graduation trajectory. By aligning its priorities with the STS and the Doha POA, and embracing principles of green, inclusive, and resilient development, Lao PDR can chart a path of sustainable progress.

Moreover, the operationalization of the key deliverables in both the DPOA and Awaza POA offer invaluable support in your country’s path towards sustainable development beyond graduation.

I would encourage you to continue engaging with these frameworks and to share your graduation experience with other LDCs seeking to follow a similar path.

Beyond specific policies and programs, sustainable development will require continued attention to governance, institutional capacity, and the engagement of all segments of society. 

The participation of women, youth, civil society, and the private sector will be essential for truly inclusive development that leaves no one behind.

[Conclusion]

Excellencies, 

Lao PDR stands at a defining juncture in its development journey. Graduation from the LDC category is a significant achievement - one that reflects decades of dedication, resilience, and strategic policymaking.

As you take this next step, please rest assured that the United Nations remains your steadfast partner. Together, we will ensure that your graduation is not just the fulfillment of statistical benchmarks, but a meaningful transformation - one that delivers real and lasting improvements in the lives of all its people.

My Office and I will be with you in this important journey. 

I thank you.