June 2021 updates
Laos is currently fighting against a new COVID-19 outbreak in the country. By June 3, 2021 Laos has recorded 1,934 cases of COVID-19 and the number of deaths rose to three, while the number of recovered patients rose to 1,654.
The Laos government closed the border and began a new lockdown on April 23, 2021. Due to the outbreak of COVID-19, the lockdown will extend to June 4, 2021. Citizens are required to stay at home, with the exception of purchasing groceries or seeking medical treatment. Gatherings of over 10 people are not allowed.
Bokeo province (home to Golden Triangle Special Economic Zone) contained a COVID-19 outbreak in May 2021.
State-run water supply and electricity enterprises cut tariffs by 3-5% to facilitate people to combat COVID-19. The reduced tariffs will last for three months.
Impact on workers and children:
According to the taskforce members, many workers left the special economic zone and thus spread the virus in the community. With over 5,000 workers in the zone, and a lack of job opportunities due to lockdown, they were not able to work and thus had inadequate food.
Over 50,000 workers were fired or made redundant during the second COVID-19 outbreak in April 2021. According to the Ministry of Labor and Social Welfare, around 10,000 workers from 11 garment factories and two steel plants in the capital suffered from that. Since they were not covered by the Social Security Fund, they could not enjoy unemployment benefits.
The Lao tourism industry has been severely hit due to COVID-19, despite its successful avoidance of the pandemic in 2020. Workers in the tourism industry have much fewer job opportunities.
More countries and organisations donated vaccines to Laos in an effort to contain the virus. In May, the Australian government pledged to support Laos economic recovery and give one million vaccine doses to Laos. China delivered over 1,800,000 Sinopharm COVID-19 vaccines in April. The US handed over hygiene supplies and protective equipment worth over 1.8 billion kip to Laos. It could lessen the burden of the Lao healthcare system.
A cut in tariffs of water supply and electricity could reduce working families’ burdens, given that they might not be able to make a living during the lockdown.
February 2021 updates
By February 19, 2021 Laos has recorded 45 cases of COVID-19 and has not reported any deaths.
The latest Lao PDR Economic Monitor — Supporting Economic Recovery — published in January 2021 by the World Bank finds that the COVID-19 pandemic has had significant adverse effects on growth across the country, plunging the economy into its first recession since the Asian financial crisis of the late 1990s. The report estimates that the economy will shrink by 0.6 percent in 2020, with tourism services, wholesale and retail trade, and manufacturing most seriously affected.
Impact on workers:
Low-income workers were more likely to lose their jobs during the pandemic. Approximately 16 percent of workers from the poorest 40 percent of households employed before the pandemic had lost their jobs by July 2020, compared with 11 percent of their counterparts from the top 60 percent of households.
Declining foreign and domestic demand battered the construction and manufacturing sectors, in which one-third of workers lost their jobs by July 2020. Supply chain disruptions followed by contraction in external demand led to a decline in trading volumes between Lao PDR and its major trading partners. Lower foreign demand in manufacturing goods caused firms to reduce working hours or lay off workers, according to the World Bank.
The negative economic impact fell disproportionately on informal workers, who lack labour and social protection. As in other developing countries, employment in Lao PDR is largely informal, especially in the construction, hospitality, manufacturing and transportation sectors, where less than 10 percent of workers are wage workers protected by written contract and social insurance coverage. Informal workers ace the risk of falling into extreme poverty as a result of temporary economic disruptions or business closure. (Source: World Bank)
Impact on children and families:
According to the World Bank, low-income families are at risk of falling deeper into poverty because of the pandemic because household livlihoods have become less diverse, relying on fewer income sources. This makes them more vulnerable to employment shocks.
Food insecurity in Laos has been exacerbated by the pandemic. In 2018-2019, almost 20 percent of the population experienced moderate to severe food insecurity. Rising food prices, as well as job and income loss during the pandemic are putting vulnerable households at an even higher risk on food insecurity.
Schools in Bokeo Province must fully implement social distancing measures, and hand sanitizer must be made available to all students and staff, according to a notice issued by the Bokeo Provincial Taskforce for Covid-19 Prevention and Control in February 2021.
July 28, 2020 update
On July 24, after 101 days on no new infections, Laos confirmed 1 new case of COVID-19, bringing the total number of cases in the country to 20.
The timber company we are in touch with in Laos has said it has been supplying more hand sanitizer gel, soaps and masks to its workers in each regional office in response to the new COVID-19 case in July. It is continuously doing awareness-raising among workers in health & safety and is applying strict hygiene practices at every work site, such as mandatory hand-washing, and teaching good practices when using toilet facilities etc. The company has reported an increase in orders from foreign buyers this month compared to June.
According to feedback from another factory in the construction equipment sector, they have installed barriers in the canteen to support physical distancing practices as can be see in the photos below.
Following a trend of shrinking of orders both from domestic and international buyers, things have started looking up since June.
National travel restrictions have been lifted, thereby easing previous challenges of interprovincial travel between production sites.
With only 19 cases of COVID-19 recorded nationwide in total, Laos began easing a 2-month lockdown in May. Construction projects, plants, and factories may all resume operations now.
Garments factories have resumed production to normal pace since the middle of May after pausing/reduced their production for about 1 month.
An interview with one garment factory showed that they cannot expect to receive orders with some foreign clients until the end of 2020.
There have been reports of factory workers in other sectors such as the garment sector, not receiving their wages or having their wage payments postponed.
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