Age of choice: Lao People's Democratic Republic in the new development finance landscape

Research reports and studies
April 2016
Romilly Greenhill, Shakira Mustapha

National financing strategies will play a decisive role in implementing the Sustainable Development Goals.

The development finance landscape has dramatically changed since the early 2000s: there are now more development finance providers than ever before, offering a new ‘age of choice’ in financing options to developing countries. Governments need to better understand the sources of finance and potential partnerships available to them if they are to capitalise on this age of choice in a way that effectively supports their national objectives.

Official development assistance (ODA) remains relevant, despite Lao PDR’s transition to lower-middle-income country status, but there has been a shift from grants to loans. Development finance beyond ODA increased between 2002 and 2013, from $21 million to $433 million, and from 11% to 48% of total external development finance. Chinese assistance has grown rapidly. By 2012, China was as large a donor as Japan, the biggest DAC donor. Concessionality is the main priority for the government, but it has also accessed non-concessional finance.

This study is one of a set of case studies examining the challenges and opportunities facing governments in managing development finance within this new context.