World Bank Reports High Food Prices Driving Child Malnutrition in Laos, Urges Policy Action

Rising Food Costs in Laos Contribute to Stunted Growth and Economic Challenges, World Bank Calls for Targeted Reforms.

The World Bank has released two policy notes today, highlighting the detrimental effects of high food prices on child malnutrition in Laos. The reports, titled Food Inflation in the Lao PDR: Trends, Drivers, and Impacts and Factors Behind Child Malnutrition in the Lao PDR, examine the trends of food inflation and offer targeted recommendations to help vulnerable families, particularly children, who are most affected by rising food costs.

Presented in collaboration with experts from the Ministry of Agriculture and Forestry, Ministry of Industry and Commerce, Ministry of Planning and Investment, and UNICEF, the policy notes reveal that food inflation in Laos has surged into double digits since mid-2022, surpassing global and regional inflation trends. The sharpest increases have been seen in rice prices, which are particularly volatile in the northern region due to a reliance on food imports and a deficit in staple foods.

“Many poor and vulnerable families are suffering because of food price increases,” said Alex Kremer, World Bank Country Manager for Laos. He called for economic reforms, such as improved tax collection and better public spending management, to stabilize the exchange rate and control inflation.

In addition to food inflation, child malnutrition remains a critical issue in Laos. Approximately one-third of children in the country are classified as stunted (too short for their age), and no progress has been made in reducing this rate since 2017. Malnutrition not only affects children’s development but also has long-term consequences for the country’s economic growth. The reports highlight that poorer households are often unable to afford essential nutrients, such as meat, dairy, and eggs, which are crucial in reducing the risk of stunting.

Addressing this issue, Dr. Sathabandit Insixiengmay, Vice Minister of Planning and Investment, emphasized that the new findings provide valuable insights for all stakeholders to tackle high food prices and malnutrition. "Improving the efficiency of our food market would make it easier to keep prices stable," he said.

The primary driver of food inflation in Laos is the depreciation of the kip, the national currency. This depreciation increases the cost of imported food and agricultural inputs. From 2017 to 2023, every 1% drop in the kip’s value against the dollar led to a 1.1% increase in food prices. With purchased food accounting for one-third of household consumption, the reliance on imported food makes families vulnerable to price fluctuations, despite the country's self-sufficiency in rice production.

The World Bank’s reports suggest that increasing state revenues would allow the Lao government to provide targeted support to the poorest families, such as through the existing Helping Hand Program. Additionally, reforms to improve food trade within Laos, facilitate the movement of food to where it’s most needed, and enhance agricultural market information would help stabilize food prices.

Moreover, the reports recommend policies that support farmers in investing in more efficient production methods, credit access, and technical training, as well as investment in infrastructure like roads, irrigation systems, and storage facilities. These measures would allow farmers to capitalize on high prices and improve the stability of local food supplies.

The Lao government, with support from the World Bank, is using a multisectoral convergence approach to address both nutrition and food security. This includes improving social assistance, livelihood options, and access to health services, while also focusing on better sanitation, hygiene, and clean water.

The World Bank’s policy recommendations offer a path forward to address the pressing issues of food insecurity and malnutrition in Laos, emphasizing the need for strategic reforms and long-term investments in both the food market and public health systems.