In a rare moment in the international spotlight, Laos was the subject of two articles published by major world media outlets in early October, although not with the type of headlines desired by the ruling communist party. The BBC published an article on October 8 titled “‘I feel hopeless’: Living in Laos on the brink”. Days later, the Washington Post released an article titled “China’s promise of prosperity brought Laos debt — and distress”, presumably because the editors believed Laos wouldn’t be interesting enough without including stories of Chinese debt traps. However, both articles accurately portrayed the grim situation that most Laotians, especially the young, currently find themselves in. As reported by the BBC, many Laotians see no hope of finding work at home due to a barren job market, leading them to seek employment as cleaners or fruit pickers in countries like Australia. As a result, droves of Laotians are leaving the country. It is estimated that by the end of this year, around 90,000 or possibly more Laotians will have officially migrated, joining the approximately 51,000 who left last year and the hundreds of thousands who migrated abroad earlier.
Laos has faced a series of challenges in recent years. The landlocked Southeast Asian nation has not fared well during the COVID-19 pandemic. Since the beginning of 2021, it has experienced one of the highest inflation rates in Asia, reaching a peak of 41.3 percent in February and still hovering around 25 percent. The local currency, the kip, is collapsing, reaching an all-time low in mid-September when it was trading at 20,000 to the U.S. dollar compared to around 8,000 in 2019. This has resulted in skyrocketing prices for goods and services. Public expenditure on education and healthcare has also decreased significantly, causing attendance rates to plummet and forcing many low-income families to reduce spending on education and healthcare since the start of the pandemic.
Laotian youth face particularly dire prospects. According to the BBC report, the unemployment rate among 18-to-24-year-olds is the highest in Southeast Asia, with 38.7 percent of young people not in education, employment, or training. Many young Laotians see little value in pursuing higher education due to the high cost of bribes and opt instead to study Korean and seek employment in high-paying factory jobs in Seoul.
Official data from the Ministry of Labour and Social Welfare estimates that a significant number of Laotians have been leaving the country through official channels. In particular, a large number have migrated to neighboring Thailand, where they can earn in a day what they would earn in a month in Laos. In fact, it is believed that the number of Laotians working in Thailand, both legally and illegally, is much higher than the official estimates. Additionally, a considerable number of Laotians have also migrated to countries like Japan and South Korea, where they have found higher-paying jobs but are heavily dependent on the increased salaries and have little incentive to become politically active.
It is often said that economic legitimacy is the primary factor that allows the ruling communist party to maintain its authority in Laos. The argument goes that as long as the average person’s living conditions continue to improve, they are willing to tolerate the lack of elections, representation, and a corrupt government. However, this arrangement has its limits, and if economic legitimacy fails, the party could face a serious threat to its authority.