The EU is one of the most important development partners of Lao PDR in terms of grant aid for development cooperation and humanitarian help, and also one of its most important trade partners. EU cooperation takes two forms: programmes funded by the EU budget and managed by the European Commission; as well as through bilateral initiatives of EU countries.
EU assistance to Lao PDR started during the early 1990s when the main priorities were rural development, urban development and support for refugees returning from Thailand. EU development aid to Lao PDR between 1993 and 2006 totalled approximately €100 million.
The 2007-2013 Country Strategy for Lao PDR allocated a total amount of EUR 69 million. The current seven-year allocation (2014-2020) has increased the funding for Lao PDR to EUR 207 million.
The current EU programme for Laos covers five years and is synchronised with the Lao PDR National Socio-Economic Development Strategy (2016-2020). It allocates EUR 162 million in three sectors: nutrition, education and governance under the framework of the European Joint Programming 2016-2020, which sets out a common vision, priorities, approach, division of labour and planned spending of the EU, EU Member States and Switzerland. Taken together, the EU and EU countries are the 4th biggest development donor in Laos, committing around EUR 70 million annually in grants.
Supporting Lao PDR to achieve the SDGs
The EU has supported Laos in its efforts to achieve the Millennium Development Goals (MDGs), in partnership with the government and other development partners, and will continue to provide assistance for the achievement of the Sustainable Development Goals (SDGs).
The EU also recognizes and supports the efforts of Lao PDR to graduate from the group of Least Developed Countries (LDCs) by 2020. The National Socio-Economic Development Plan (NSEDP) is recognised as the Government’s development policy document and poverty eradication instrument with a five-year planning horizon (7th Plan 2011-2015; 8th Plan 2016-2020), and the EU follows its formulation and implementation closely, striving to align its support with it. The EU participates at the Round Table Meetings with the Government and with other development partners to assess progress and the challenges of development cooperation in Laos.
The EU works towards an increased level of coordination, aid efficiency and division of labour, with current support focusing mainly on economic and social development and reforms with a particular emphasis on better health and education services and on agriculture and rural development. The promotion of human rights, good governance and the sound management of public finances also feature prominently.
Laos also benefits from the European Union Thematic and Regional Programmes, as well as humanitarian assistance from the EU.