COVID-19 IMPACTS ON HOUSEHOLDS IN LAO PDR Results from the rapid monitoring phone survey (Round 1) June - July 2020 1 BACKGROUND  Lao PDR was the last country in Southeast Asia to report its first confirmed case of COVID-19  The first case was confirmed on 24 March 2020. By July 2020, 22 cases had been confirmed  The Government of Lao PDR (GoL) announced a lockdown starting on 30 March 2020. All land borders are closed  Some restrictions have been lifted since 18 May 2020:  Domestic travel allowed on 18 May 2020  Students returned to school on 2 June 2020  Foreign travelers involved in investment projects allowed on 4 June 2020 2 While other activities have almost returned to GDP is estimated to grow by 0.4 % in 2020, the normal, travel remains at 20% below normal. country’s lowest GDP growth in three decades. The country remains closed to foreign tourists. Visitors to (or time spent in) categorized places change compared to baseline days (the median value from the 5-week period from January 3rd to February 6th 2020) 40 Beginning of the outbreak 20 0 -20 -40 -60 Survey period -80 2/15/2020 3/15/2020 4/15/2020 5/15/2020 6/15/2020 7/15/2020 Retail & Recreation (%) Grocery & Pharmacy Stores (%) Residential (%) Transit Stations (%) Parks (%) Workplaces (%) Source: google.com/covid19/mobility Source: https://www.icao.int/safety/Pages/COVID-19-Airport-Status.aspx 3 MAIN FINDINGS Despite the rather low number of confirmed cases, the social and economic impacts of COVID-19 are far from negligible in Lao PDR: Employment Household business  13% of respondents employed before the outbreak  8.4% of household businesses (or 15.4 % of small reported not currently working (in June-July 2020) household businesses) were temporarily or  The hardest-hit sector is the hospitality sector permanently closed where 52% of respondents had either lost their job  More than half of businesses were experiencing or changed job by July 2020 revenue decline  32% of those remaining in employment experienced  Only 11% of household businesses that continued a decline in their wage or business income operating had adjusted their business model in  Agriculture and trade absorbed some workers who response to COVID-19 had lost their job due to COVID-19  19% of households reported job loss of household member since the outbreak 4 MAIN FINDINGS Despite the rather low number of confirmed cases, the social and economic impacts of COVID-19 are far from negligible in Lao PDR: Income Price  48% of households experienced a decline in total  70% of households reported experiencing an household income compared to last year increase in food prices  Nonfarm business income and remittances were  Low-income households earned extra income or most affected collected wild food to meet the minimum basic  Half of households that prior to COVID-19 relied needs on remittances (domestic and overseas)  High-income households adjusted their experienced a decline in or did not receive consumption or relied on savings remittances since the outbreak 2.8 % of households reported having someone who had returned to live in the same household since March 2020 Half of those returning from abroad did not intend to go back 5 1. Survey 6 Design  Method: Rapid monitoring survey conducted through maximum 20 minutes length of phone interview on 2,500 households starting between June 20-July 16, 2020. The survey was administered by Indochina Research (IRL).  Tracked indicators: employment, income, return migrants, family business, coping strategies, assistance or support program, access to healthcare, medicine, water, electricity and education.  Sampling: Random Digit Dialing, with a mix between heads of households and members of households. Respondents are at least 18 years old.  Representative at national, urban/rural.  March 2020 is marked as the beginning of the COVID-19 pandemic in Lao PDR. 7 Sample distribution by geography of the LECS 6 and COVID-19 phone survey Households by regions Households by urban/rural 45 40 RMPS(weighted) Proportion of households 35 30 LECS(weighted) 25 20 15 10 RMPS(unweighted) 5 0 Vientiane North Central South LECS(unweighted) Regions 0 20 40 60 80 100 LECS(unweighted) RMPS(unweighted) Proportion of households LECS(weighted) RMPS(weighted) Rural Urban 8 Weight is adjusted to strengthen representativeness of the survey Household size Dependency ratio 40 30 35 25 Proportion of households Proportion of households 30 20 25 20 15 15 10 10 5 5 0 0 1-3 4 5 >5 [0-0.1] [0.1-0.3] [0.3-0.4] [0.4-0.5] [0.5-1] Household size Dependency ratio LECS(unweighted) RMPS(unweighted) LECS(unweighted) RMPS(unweighted) LECS(weighted) RMPS(weighted) LECS(weighted) RMPS(weighted) 9 Characteristics of respondents Age group Household composition Gender 12% 3.50 3.16 45% 3.00 43% 2.50 Number of members 40% 60% 15-34 35-54 55 over 2.00 Ethnic group 1.50 8% 2% 1.00 0.88 Men Women 0.68 14% 0.50 0.13 0.00 Children 0-6 Children 6-14 Members 15-64 Members 65 over 76% Lao-Tai Mon-Khmer Chine-Tibet Hmong-Iumien Other 10 Employment and 2. Income 11 12.8% of respondents employed before the crisis …of which nearly 70% were due to COVID-19 (March 2020) reported not currently working, related reasons Current employment status of respondents REASON FOR NOT CURRENTLY WORKING employed before the crisis (%) Others 16% 12.8% Seasonality 15% 5.6% Not currently working Changed job Health-related and quarantine reasons Remain with the same 5% job Business Business closure due to 81.7% closure due to government restriction other on COVID-19 + travel reasons/laid off restriction 5% 59% 12 The impact is evenly distributed across urban/rural areas although the top quintile is less affected Current employment status of respondents employed before the crisis (%) Current employment status of respondents employed before the crisis (%) Rural 11 3 5 81 75 78 81 83 87 Urban 13 4 2 81 6 5 3 4 4 3 4 4 2 15 3 12 11 10 8 Not currently working (non-seasonal) 1st 2nd 3rd 4th 5th Changed job (non-seasonal) Consumption quintile Not working or changed job (seasonal) Remain with the same job Remain with the same job Not working or changed job (seasonal) Changed job (non-seasonal) Not currently working (non-seasonal) 13 Imputed consumption based on LECS 6 and selected household characteristics 52% of respondents from the hospitality sector had …and among those who remained in employment either lost their job or changed job by July 2020, (nonfarm employees and own-account workers), 32% experienced a decline in their wage or business income % of people not currently working or changed job due to non-seasonal reasons Income... 60 50 not received 2.9 40 30 20 decreased 29.5 10 0 Health care Education Contruction Electricity/gas/water Public service Others Manufacturing/industry Wholesales/retail Agriculture/hunting/fishing Transportation/post Professional services, Hotel/restaurant Private service stayed the same 46.6 finance, real estate office/tourism increased 20.9 % of workers who remain in employment (nonfarm) Pre-crisis sector of employment 14 Agriculture and trade are the sectors absorbing workers who have lost their job due to COVID-19… Before March 2020 June – July 2020 However, most workers were not able to resume their work or found a new job. 15 8.4% of household businesses were temporarily or 15.4% of small household businesses were temporarily permanently closed, and more than half of or permanently closed, while larger businesses tended businesses were experiencing a fall in revenue… to continue operating without revenue Business revenue since March 2020 is... Business revenue since March 2020 is... Others Sales as of February 2020 (million kip) Personal services > 10 m Hospitality and transport Retail and wholesale trade 1 - 9.9 m Construction Industry < 1m Agriculture 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% % of household business % of household business Higher than usual Same as usual Less than usual Higher than usual Same as usual Less than usual No revenue Business closed No revenue Closed 12.6% of household businesses in the hospitality and transport sector were temporarily or permanently closed 16 More than half of business closures are due to REASON FOR CLOSURE COVID-19 related reasons,… Others 14% Seasonal closure 25% Due to government restriction on Had to care for COVID-19 family 29% 2% Got sick due to non- COVID diseases 2% Travel restriction 2% Couldn't find the raw materials No customers/ less 4% customers 22% … while 80% of a decline in revenue is due to COVID-19 Why did revenue fall? related reasons Others 10.6 Seasonal closure 6.0 Travel restriction/ couldn't transport products 3.4 No customers/ less customers 36.2 Due to government restriction on COVID-19 43.8 % 17 Revenue decline was associated with reduced operation, production, and use of labor and raw materials Changes in business operations (% of businesses that continue operating) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Revenue not Revenue Revenue not Revenue Revenue not Revenue affected declined affected declined affected declined Total hours worked Demand for products and services Supply of inputs Increase Decrease No change 18 8.5% of farming households faced disruption in their farming activities CAUSE OF DISRUPTION Others 25% Not feeling well/ had to Had to stay home care for family 45% 6% Couldn't transport the products/produce/crops 4% Restriction on travelling/ transporting 17% Unavailability of hired labor 3% 19 2.8 % of households reported having someone who Approximately half of households who rely on remittances had returned to live in the same household since (domestic and overseas) experienced a decline in or did March 2020 not receive remittances since the outbreak % of household with return migrant Since March 2020, remittances … 0.8% 0.7% 0.5% Remittances within Laos 8 34 34 24 2.1% 2.3% 1.8% Lao PDR Urban Rural Remittances from overseas 10 36 32 22 Domestic return Return from overseas 0% 20% 40% 60% 80% 100% 53% of migrants returning from abroad in rural Increased Stayed the same Reduced Not received areas said they do not intend to go back * In 2019,15.7% of households relied on remittances as one of their income sources. 20 Nearly half of households experienced a decline in total household income compared to last year Since March 2020, total household income has… Increased 13.8 Stayed the same 38.4 Reduced 44.5 Not received 3.3 % of households 21 Nonfarm business income and remittances were affected the most L IV EL IHO O D SO UR CE IN THE L AST 12 MO NTHS SINCE MAR CH 2020, INCO ME HAS... 55.8 44.1 FARMING/FEEDING LIVESTOCKS/FISHING 19.1 34.7 35.0 11.2 FAMILY FARMING/AGRICULTURE 23.4 76.6 NON-FARM FAMILY BUSINESS 12.8 39.1 44.1 4.0 NONFARM HOUSEHOLD BUSINESS 61.9 38.0 WAGE/LABOR COMPENSATION 15.6 53.3 25.2 6.0 WAGE/LABOR COMPENSATION 7.9 91.9 UNEMPLOYMENT BENEFIT 12.0 47.3 22.8 17.9 UNEMPLOYMENT BENEFIT 8.1 91.8 REMITTANCE FROM OVERSEAS 10.5 35.6 32.2 21.7 REMITTANCE FROM OVERSEAS DOMESTIC REMITTANCES 11.8 88.0 DOMESTIC REMITTANCES 7.8 34.1 33.9 24.3 INCOME FROM 15.7 84.2 INCOME FROM ASSETS/INVESTMENT/SAVING 15.4 53.4 23.2 8.0 ASSETS/INVESTMENT/SAVING PENSION 6.4 93.5 PENSION 5.7 83.4 3.6 7.3 GOVERNMENT SUPPORT 3.6 96.3 GOVERNMENT SUPPORT 14.7 31.9 7.2 46.2 S U P P O R T F R O M O T H E R S O U R C E S 1.65 98.3 SUPPORT FROM OTHER SOURCES 17.7 27.0 3.8 51.5 % OF HOUSEHOLD % OF HOUSEHOLD RELYING ON EACH INCOME SOURCE Increased Stayed the same Reduced Not received Yes No Refused 22 3. Coping strategies 23 70% of households reported experiencing an increase in food prices and 19% of households reported job loss of household member SINCE MAR CH 2020, HAVE HO USEHO L D MEMB ER S EXP ER IENCED AS FO L L OW IN G? Yes No JOB LOSS 19.3 80.7 NON-FARM BUSINESS CLOSURE 6.8 93.2 THIEF/STEALING MONEY, VALUABLE THINGS, ETC 2.4 97.6 TEMPORARY HALT ON FARMING, FEEDING LIVESTOCKS AND 11.2 88.8 FINISHING INCREASED PRICE OF THE RAW MATERIALS FOR 18.7 80.3 AGRICULTURE/BUSINESS DECREASED PRICE OF PRODUCE/ DROP IN PRODUCTION 19.3 80.7 INCREASED FOOD PRICES 70.1 29.9 SICKNESS, INJURY OR PASS AWAY OF HOUSEHOLD MEMEBERS 4.9 95.1 WHO EARNED INCOME % OF HOUSEHOLD 24 18.5% of households reduced usage and 19.1% relied on 34.9 % of households engaged in additional income savings when facing an increase in the price of farming and generating activities to compensate for job loss nonfarm business inputs Coping strategies by households facing increased Coping strategies by households with a price of inputs (%) member experiencing job loss (%) Hunted/collected food 2.9 Earned extra income 5.8 Earned extra income 34.9 Reduced nonfood consumption 18.5 Reduced nonfood consumption 3.8 Reduced food consumption 6.8 Reduced food consumption 6.2 Relied on savings 19.1 Relied on savings 10.0 Did nothing 48.6 Did nothing 48.6 25 Half of households affected by increased food prices 26% of households attempted to cope with shocks reduced their consumption on their revenue from production Coping strategies by households facing increased Coping strategies by households affected by food prices (%) decreased price of produce/drop in production (%) Hunted/collected food 6.0 Sold harvest in advance 4.7 Earned extra income 12.5 Earned extra income 10.9 Reduced nonfood 19.9 Reduced nonfood consumption 5.0 consumption Reduced food 36.5 consumption Reduced food consumption 3.8 Relied on savings 18.5 Relied on savings 3.4 Did nothing 32.5 Did nothing 73.6 26 When food prices rise, … Coping strategies adopted by households facing increased food prices (% by welfare quintile) 45 40 35 30 25 20 15 Low-income households need High-income households 10 to earn extra income or adjust their consumption 5 collect wild food to meet the 0 or rely on savings minimum basic needs Hunted/collected food Did nothing Reduced food consumption Earned extra income Reduced nonfood Relied on savings consumption 1st 2nd 3rd 4th 5th Imputed consumption based on LECS 6 and selected household characteristics 27 Only 11% of household businesses that continued operating had adjusted their business model in response to COVID-19 CHANGE IN BUSINESS MODEL Others 12% Began to telephone, Reduced the number of messaging or online products platform 7% 21% Reduced employees 4% Reduced working hours Changed product 28% 28% 28 Limited fiscal space has prevented a broad welfare program to support workers who lost their jobs Lao labor market Total job loss 12.8 Unemployment benefits claimed (October 2020) 0.37 Unemployment benefit target group 3.1 Non-government wage workers with social insurance 4.3 Non-government wage workers 10.4 Total employment 100 0 10 20 30 40 50 60 70 80 90 100 % of total employment (pre-crisis) Estimated total employment ~ 3,000,000 jobs 29 Source: LEM, LSSO, LECS6, COVID survey Public service 4. delivery 30 14.2 % of households reported not having 19.7 % of households reported accessibility to enough drinking water since March 2020 electricity was worse than before March 2020 % of households reported electricity was worse Reason for not having enough drinking water than before March 2020 Afraid to catch COVID-19 4.2 South 17.4 Central 21.6 Not enough money to buy 11.8 North 16.4 Travel restriction/ restriction on product 7.5 Vientiane capital 25.1 transportation Cannot access community water 4.3 Rural 18.3 Water supply reduced 23.1 Urban 22.3 Water supply not available 60.4 Lao PDR 19.7 % of households reported not having enough drinking water 31 Only 24% of children who enrolled in school PUBLIC 14.7% needed medical services and 97% were SERVICE DELIVERY able to get access to medical services since the before the outbreak engaged in education/learning outbreak activities during school closure Education or learning activities Self learning 11.6 Study with family members 15.0 Special/tutorial class (by a tutor) 4.5 Study online (by using apps) 23.5 Assignments/homework 54.2 6% had difficulty buying medicines since the % of children who engaged in education/learning activities during school closure outbreak 32 THANK YOU 33