Urgent Action Needed to Restore Education Funding in Lao PDR

Urgent attention is needed to equip Lao children and young people with the skills necessary to strengthen the country’s economic growth and reduce poverty, a World Bank report finds.

While access to education has improved over much of the past decade, substantial gaps remain, and previous progress has been undermined by the impacts of COVID-19, ongoing economic difficulties and budgetary decisions, according to the World Bank’s Public Expenditure and Institutional Review and Financial Management in Education Analysis, subtitled Preventing a Lost Decade in Education in the Lao PDR.

Access to education remains a significant issue for many Lao children, particularly from lower secondary education upwards. Average learning levels are lower are those in neighboring countries in math, reading, and writing. Many pupils fail to enroll in secondary school or drop out early. Public financing for education has halved as a share of GDP from its peak in 2013 to around 2 percent of GDP in 2022. In addition, high unemployment, regardless of educational background, has reduced incentives for households to pursue and demand a quality education for their children.

“The first step to strengthening education in Laos is to restore education’s share of the state budget,” said Alex Kremer, World Bank Lao PDR Country Manager. “At the same time, the education sector needs to better use the available resources to promote learning. The World Bank is committed to supporting the Lao education sector.”

To avoid a lost decade for education in Laos, the report recommends urgent attention in three areas. First, comprehensive economic and fiscal reforms are needed both to increase resources for education and to create private sector jobs for graduates. Second, educational resources should be more efficiently allocated to improve equity and balance within the system. Finally, to improve learning outcomes, the sector needs to foster better teaching methods, provide improved learning materials, and improve school financing and infrastructure.

“This review provides guidance on mechanisms to increase domestic resources for education and improve resource allocation so we can maximize the value of investment in the sector,” said Dara Pakonekham, Director General of the Department of Finance at the Ministry of Education and Sports.