Germany and Laos have maintained diplomatic relations since 1958. Several thousand Laotians studied in former East Germany. Many Laotian Germany-alumni now hold influential positions in politics and business, and are continuing to foster German-Laotian relations. On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW supports Laos as part of financial cooperation (FC) there with several ongoing programmes to reduce poverty in rural areas, in forest conservation/biodiversity and to enable vocational training and the development of the financial sector.
Priority areas for cooperation with Laos include:
During the rainy season many villages are practically cut off for months, and some are without any transport connections whatsoever. Poverty remains widespread, as the affected regions are barely able to harness their economic potential.
On behalf of the BMZ, KfW is supporting Laos in extending the network of roads and tracks as well as building bridges. People living there can now reach their markets, schools, health stations and other facilities more quickly and safely all year round on the several hundred kilometres of roads that have been built. The new regional mobility increases income, contributes to decreasing levels of poverty and allows children and young people, including girls, to attend school.
A further priority area of our commitment is to help reduce deforestation in the country, thereby conserving biodiversity. Today, three fifths of Laos is still covered in forest. By combating the illegal logging and timber trading, settling land disputes, and through villages in project areas committing to protect the forest in exchange for compensation payments, valuable CO2 sinks in the forests are protected, which in turn helps to mitigate climate change.
We also support Laos in its sustainable economic development: an economy cannot develop sustainably and on a large scale without a qualified workforce. In vocational training in particular, the training and teaching curriculum in Laos is still poorly aligned with the actual needs of companies. In Laos, we therefore promote closer cooperation between vocational schools and the private sector, and also the access of micro, small and medium-sized enterprises (MSMEs) to investment loans through the banking sector. This helps to eliminate major development bottlenecks and thus contributes directly to job creation.