By relying mostly on the use of natural resources, integration into the regional market, and gradual opening of the economy, Lao PDR has recorded significant advances in recent years. It is now recognized as among the fastest-growing economies in the world, with average annual GDP growth of 7.8% over the past decade. The nature of growth, however, has created limited job opportunities, causing a discrepancy between GDP growth and income levels. Productivity in the agriculture sector, the largest provider of employment for the population, is stagnant. The focus on extractive economic activities has made job creation outside agriculture insufficient.

With the goal of institutionalizing productivity-led growth enhancement in the overall development agenda, the Government of Lao PDR through the Lao National Productivity Organization (LNPO) requested APO assistance in developing its national productivity master plan. A series of discussions between the APO and LNPO began in June to identify the objectives, modalities, and deliverables of this policy advisory project.

A high-level consultation meeting was convened in Vientiane on 14 November 2019 between the APO and Deputy Minister of Industry and Commerce Somchith Inthamith to consider the general direction and strategic points to be included in the project. That was followed by a technical consultation meeting with LNPO staff. The meetings were also attended by a team of consultants from the Korea Development Institute (KDI) led by Dr. Sanghoon Ahn, Executive Director of the KDI Center for International Development. After incorporating the feedback from the technical meeting, the project will launch formally by 1 December. A comprehensive national productivity master plan is scheduled for delivery to Lao PDR by July 2020.