This report presents the findings of a case study of Lao PDR’s national social protection system, which sought to identify the factors that would enable that system to be responsive to shocks. The case study involved field visits and in-country interviews and is one part of the project titled ‘Strengthening the capacity of ASEAN Member States (AMS) to develop risk-informed and shock-responsive social protection for resilience’.
Research design and methodology
With a focus solely on schemes implemented by the Lao PDR government relating to floods and droughts the case study looks at the different aspects of the Lao PDR social protection system that contribute to its effectiveness, including coordination and capacity; delivery and targeting systems; and financing mechanisms. The case study proceeded through three stages: a literature review (including of legislation, policy plans, and programme evaluations); fieldwork (interviews with stakeholders, including ministry officials, United Nations (UN) agency and non-governmental organisation (NGO) representatives, government representatives, and village-level respondents); and analysis.
Poverty, risk, and vulnerability profile
Lao PDR is a lower-middle-income country (LMIC) and is classified in the ‘medium’ category of the Human Development Index (HDI). Despite significant economic progress over the last two decades, Lao PDR still has one of the highest poverty rates in the ASEAN region, with around a fifth of its 6 million people in poverty. According to the World Risk Index (WRI) Lao PDR is a ‘medium risk’ country and is highly vulnerable to disasters, with high susceptibility, a lack of coping capacity, and a lack of adaptive capacity. Flooding and storms are the most frequent and destructive natural hazards faced in the country. Lao PDR experiences annual monsoon flooding (July– September) and saw major floods in 2009, 2011, and 2013. The floods in 2009 and 2011 affected over 100,000 people, killed dozens, and damaged houses and infrastructure, with an estimated cost of more than US$100 million. In the 2013 flooding, 12 out 17 provinces were severely flooded, affecting approximately 347,000 people and costing the country US$219 million.
Responsibility – The mandate for disaster risk management (DRM) in Lao PDR is shared across government ministries, co-led by the Ministry of Natural Resources and Environment (MoNRE) and the Ministry of Labour and Social Welfare (MoLSW). The National Disaster Prevention and Control Committee (NDPCC) is responsible for overall coordination, including recommending the declaration of a state of emergency and requests for humanitarian assistance, as well as developing a master plan for the response and mobilising resources.
Laws, policies, and plans – While draft laws on DRM and climate change are being developed and there are several national-level policies (e.g. the National Disaster Management Plan 2001–2010 and National Disaster Risk Strategic Plan 2003–2020), there is currently no finalised national disaster response plan or associated standard operating procedures (SOPs).
Early warning system and procedures – Lao PDR has a national strategy for its early warning system (EWS), including SOPs. When a disaster is identified, the Department of Meteorology and Hydrology (DMH), under MoNRE, issues a written warning to the Prime Minister’s Office, and this is sent to the NDPCC and Ministry of Agriculture and Forestry. The warning is broadcast through media outlets and communicated using mobile phones and radio systems.
Disaster risk financing – While there are five funds that can support disaster preparedness and response activities to varying degrees – including the National Contingency Fund and State Reserve Fund and the Disaster Management Fund – stakeholders point to the lack of sufficient contingency funds. International disaster flash appeals were launched in response to the floods in 2008 and 2009, but only 46 per cent and 75 per cent of the funds requested were actually received. Thus, there is an acute need for effective disaster risk financing in Lao PDR.
Gaps in DRM – Overall, the DRM system is not well prepared to anticipate and respond to disasters, especially large-scale disasters. Gaps in DRM provision include poor coordination; a lack of clarity on detailed roles and responsibilities; a gap between actual need and the provision of support (often filled by NGOs and agencies like the Lao Red Cross (LRC)); the fact that district and village bodies do not have sufficient capacity to prepare for disasters or sufficient contingency funds; a lack of accurate, district-level risk profiling and hazard forecasting; and the absence of databases of those affected by disasters.
Social protection in Lao PDR
Overview: The social protection sector in Lao PDR is nascent, with low coverage and the lowest spending among all AMS. MoLSW has the mandate for social welfare (through the Department of Social Welfare (DSW) and social security but different ministries and government bodies operate fragmented schemes, including social health insurance, national health insurance, free schooling, the national school meal programme, and old age pensions. NGOs (funded by development partners) run programmes for disadvantaged groups, such as vulnerable children and those affected by disaster.
Policies and plans: The Eighth National Social Economic Development Plan (NSEDP) 2016–2020 commits to improvement of, and access to, social protection, while the Draft National Social Protection Strategy (NSPS) 2018– 2030 (close to finalisation) envisages that ‘By 2030, Lao people have access to basic social protection services…’ In line with these documents, the last few years have seen a considerable investment in improving access to and coverage of social security, including health insurance.
Gaps in social protection: Lao PDR does not have any nationwide regular social welfare programmes that provide benefits (either cash or in-kind). Although there have been a number of donor-/NGO-led pilots which have tested the delivery of such benefits there is limited appetite and acceptance of cash-based assistance in the country. While the DRM sector provides relief in the immediate aftermath of a shock, it provides almost no direct support to affected households or communities in relation to medium-term support (from relief to recovery) which would enable people to not only cope but also to recover. There are currently no experiences of social protection systems in Lao PDR being used to respond to shocks.
Opportunities for shock-responsive social protection: In line with the foregoing, the social protection sector in Lao PDR presents few, if any, opportunities for shock-responsive social protection programming. It is currently premature to identify social protection programmes that might be suitable for shock response. However, two facts stand out: improving the coverage of social protection would help to build the resilience of the rural poor in the face of increased exposure to climate change risks; and, despite resistance, introducing cash entitlements to ensure a minimum of income security for those not covered by the contributory schemes could be a crucial step for the development of a comprehensive social protection floor over the coming years.
The social protection sector in Lao PDR is nascent, and the DRM systems require significant improvement. The momentum of the ASEAN declaration on social protection can be leveraged by Lao PDR to invest in its own social protection system while learning from and contributing to the developments in other ASEAN countries.
Key policy recommendations include the following:
- Technical assistance on public financial management to relevant line ministries: While Lao PDR has a number of funds that support disaster preparedness and response, knowledge regarding their use is scarce and their suitability to respond efficiently to localised disasters is unclear. The provision of technical assistance to MoLSW and MoNRE on public financial management can clarify how line ministries can access contingency funding and suggest mechanisms to coordinate such requests. Moreover, technical assistance can help clarify the role of the National Disaster Prevention and Control Committee (NDPCC) in fund mobilisation and budget execution for disaster preparedness and response. This assistance should lead to quicker access to (greater) funding for disaster preparedness and response, especially at the district and provincial levels.
- Improve coordination among line ministries: To bring about better coordination and joint decision making among key Disaster Management Committee members and development partners the following should be implemented (among other initiatives): finalising a joint disaster management plan; carrying out joint postdisaster assessments, budgeting and planning at the district level; regular communication through Department for Disaster Management and Climate Change (DDMCC) meetings; and integrating DRM in the action plans of relevant line ministries.
- Build capacity across the DRM cycle: Translating existing DRM policies and plans into action requires capacity building at ministries, particularly at MoLSW. The DSW should be trained on core social protection concepts, especially focusing on how social protection sectors have developed in the ASEAN region; and on operationalising the proposed Child Grant and Disability Grant in the Draft Social Protection Policy (2017), which will require training on building appropriate data systems, targeting protocols, payment mechanisms, grievance redressal functions, and monitoring and evaluating performance.
- Extend coverage of priority social protection programmes in disaster-prone communities: There are no specific programmes to support recovery from disasters, which leaves poor, agrarian households highly exposed to covariate shocks, with no safety net. In the long term there should be provision of both emergency relief and recovery assistance to rural, remote households that are more vulnerable to flood damage.
Source: World Food Programme