Located in the Indochina peninsula at the heart of the Greater Mekong region, the Lao PDR shares its border with five countries: Cambodia, China, Myanmar, Thailand, and Vietnam. Given its geopolitical position, the security and prosperity of the Lao PDR can be seen as a precondition for the security and prosperity of the Greater Mekong region and the wider ASEAN community.
The Lao PDR has grown its economy at the remarkable annual rate of almost eight percent in recent years through the mining of its mineral resources and hydroelectric power generation. Despite such robust economic growth, the country must overcome a number of challenges if it is to achieve the Millennium Development Goals (MDGs) and graduate from the United Nations’ index of Least-Developed Countries. Japan encourages the Lao PDR to take on these challenges using a balanced approach that also addresses and mitigates potential social and environmental disadvantages that can arise as a consequence of such rapid economic growth.
To this end, Japan, through the Japan International Cooperation Agency (JICA), extends Official Development Assistance (ODA) in a number of sectors to facilitate socio-economic development in the Lao PDR, narrow the development gap between the Lao PDR and its ASEAN neighbors, and strengthen interconnection across the ASEAN region. Indeed, today, JICA is recognized as the leading bilateral development organization to the Lao PDR.
JICA supports numerous infrastructure projects, including the development of essential transport networks (roads, bridges, airports) that are instrumental to strengthening ASEAN connectivity. It also supports projects such as logistics parks that improve and facilitate the investment and trade environment, encouraging greater confidence and investment from the private sector, including Japanese companies.
Alongside improving transport and economic links, JICA projects support safe and stable electricity generation, connectivity and expansion, which help to lessen disparities in access to electricity across the Lao PDR, as well as contributing to the national economy through power exports.
At the same time, in order to achieve balanced economic growth, JICA provides assistance in the fields of environmental management, water treatment, and urban planning that contribute significantly to creating environments that meet the needs of local communities and wider society.
Agriculture is a key industry in the Lao PDR. JICA assistance aims to increase productivity in this sector through projects that promote irrigated agriculture and the cultivation of commercial crops. These activities help to increase the earnings of farmers who constitute the majority of the country's poor, as well as helping the Lao PDR to realize stable economic growth and narrow the development gap between urban and rural areas. At the same time, JICA extends assistance towards sustainable use of forest resources, which facilitates forest conservation, livelihood improvement and poverty reduction.
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