High food prices in Laos are exacerbating child malnutrition, according to two policy notes released by the World Bank. The documents, titled "Food Inflation in the Lao PDR: Trends, Drivers, and Impacts" and "Factors Behind Child Malnutrition in the Lao PDR," provide recommendations to mitigate the impact of food inflation and propose targeted measures for those most affected, particularly vulnerable families and their children.
The World Bank collaborated with experts from various ministries including Agriculture and Forestry, Industry and Commerce, Planning and Investment, as well as UNICEF. The findings indicate that since mid-2022, food inflation in Laos has risen into double digits, surpassing global and regional trends. Rice prices have been notably unstable. Northern regions of Laos face a shortage of staple foods and depend heavily on imports.
“Many poor and vulnerable families are suffering because of food price increases,” stated Alex Kremer, World Bank Country Manager for the Lao PDR. He emphasized the need for economic reforms such as improved tax collection and public spending management to stabilize exchange rates and control inflation.
Child malnutrition is a significant issue in Laos, with approximately one-third of children classified as stunted. This rate has not improved since 2017. Stunting impairs human potential and economic growth. Access to meat, dairy products, eggs, antenatal care visits, skilled birth attendants, prevention of teenage pregnancy, and better village sanitation can help reduce stunting.
Dr. Sathabandit Insixiengmay, Vice Minister of Planning and Investment remarked that “this work provides detail that can help all stakeholders address the impact of high food prices and reduce child malnutrition.” He noted that improving market efficiency could stabilize prices.
The depreciation of the kip is a primary factor driving food inflation due to increased costs for imported food and agricultural inputs. From 2017 to 2023, each 1% depreciation in the kip/dollar exchange rate added 1.1% to food inflation rates. Purchased food constitutes up to a third of household consumption; thus many households are susceptible to price fluctuations despite sufficient domestic rice production.
The reports suggest increasing state revenues could enable government support for impoverished populations through targeted income assistance programs like Helping Hand Program. Business reforms could facilitate internal trade within Laos ensuring stable pricing by moving food where needed most.
Farmers could benefit from high prices by investing in more efficient production methods or businesses if policies support access to credit markets farm inputs technical training irrigation storage facilities roads maintenance among others.
With backing from the World Bank Laotian authorities employ a multisectoral convergence approach tackling nutrition security issues enhancing social aid livelihood childcare healthcare clean water sanitation hygiene access simultaneously.