Laos faces challenges in creating jobs

Laos faces challenges in providing people with jobs, especially productive employment for the growing working-age population, despite the country's numerous positive conditions.

This was the message delivered by an expert from the International Labour Organisation (ILO) at a national workshop in Vientiane Thursday to discuss the Rural Employment Strategy for Poverty Reduction.

"The biggest challenge is going to be finding productive jobs for the growing working age population and growing youth population," ILO Senior Specialist on Employment and Labour Market Policies Sukti Dasgupta said.

Laos currently has a population of around 6.3 million, of which about 60 per cent are aged below 25 years. Statistics from 2005 showed that 57 per cent of the population was aged between 15-64 years, and this is expected to rise to 63 per cent by 2015.

Dasgupta said that despite there being some positive conditions in the form of strong GDP growth, a small population with high fertility, and great potential in land, minerals, tourism and manufacturing, many challenges remain regarding education and skills development, huge regional disparities, limited industries, and the low income of rural workers despite a high employment rate.

According to the 2005 ILO census, most workers in Laos, including unpaid family workers, are engaged in agriculture, which is the least productive sector.

Dasgupta noted that promoting productive rural employment is the key to balancing the labour market.

This can be achieved by creating productive employment opportunities in rural non-farm activities, supporting rural industries, local economic development, access and opportunities for market-oriented training, matching skills to labour market demand through effective employment services, and creating both assets and employment through labour intensive public works employment.

The Seventh National Socio-Economic Development Plan (NSEDP) deems that the average rate of unemployment should be lower than two per cent, with the proportion of workers in the agriculture and forestry sector lessened to 70 per cent, and increased to seven per cent in the industry sector, mainly in construction and mining, and 23 per cent in the services sector.

According to the NSEDP, the government needs to create 270,000 new jobs within the next five years.

The NSEDP also aims to increase investment in rural development to 10-15 per cent of total investment each year, through the implementation of appropriate policies on taxation, loans, use of local resources and mechanisms, and incentives to mobilise businesspeople and entrepreneurs to operate in rural areas, including businesses that contribute to poverty reduction.