Laos & Covid-19 impact

With just three deaths reported so far, Laos has received praise from the World Health Organization for prevention measures in tackling the pandemic.  The mountainous terrain, sparse rural population, limited transportation system and dearth of major cities are seen to have aided its response. However, while Laos has so far weathered public health effects of the pandemic, the economic impact is likely to be big. The World Bank has cautioned that Laos is not immune from the global economic downturn triggered by COVID-19. As per EIU data, the GDP growth shrank to 0.7% in 2020. Tourism and the services sector have been hit the worst, causing unemployment to surge to 25%.

The critical tourism industry which contributes around 5% of Laos’ GDP and employs 54,000 workers—is taking a big hit due to restrictions on incoming travel. The full impact might not be seen until 2022. The World Bank has warned that Laos’ hospitality sector will experience a sharp drop in profits. The outlook is especially concerning for a country that already has a high level of public debt. Laos’ fiscal deficit is expected to be around 5.9% in 2022. A shrinking economy means Laos may struggle to service its debts.

While the recent Covid19 cases appear isolated, Prime Minister Thongloun Sisoulith has urged the public to stay on high alert.

In the first half of 2021, the WHO-led global health initiative planned to deliver 564,000 doses of the UK’s Oxford University-AstraZeneca vaccine, manufactured by the Serum Institute of India. This will be enough to cover just 3.8% of Laos’s population. The second round of Covid­19 vaccination programme which will run around May 2021, plans to vaccinate 150,000 medical staff and high-risk groups (the elderly and migrant workers) with doses donated by a Chinese pharmaceutical producer, Sinopharm, which has pledged a total of 1.5m doses to Laos, although the timeline is unclear.

 



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