SDG Investor Maps

Lao PDR | Financials

Access to Finance for MSMEs with a Focus on Smallholder Farmers

Expected Impact

IOA supports MSMEs, promoting decent work and financial inclusion to stimulate growth and reduce income inequality in Lao PDR

Investment Timeframe

Medium Term (5–10 years)

Market Size

USD 100 million - USD 1 billion

Lao PDR | Renewable Resources and Alternative Energy

Regenerative Construction Materials

Expected Impact
The IOA advances sustainable development in Lao PDR via eco-friendly forestry and regenerative construction, benefiting communities and nature

Investment Timeframe

Medium Term (5–10 years)

Market Size

< USD 50 million

Lao PDR | Education

Digital Infrastructure for Virtual Skill Development

Expected Impact

Digital Education aims to bridge the educational and employment gaps in Lao PDR, empowering underserved communities for socio-economic upliftment by providing quality, accessible educational content

Investment Timeframe

Medium Term (5–10 years)

Market Size

< USD 50 million

Lao PDR | Food and Beverage

Animal Feed Production and Distribution

Expected Impact

Expected to increase access to high-quality animal feed, promoting sustainable agriculture and improving rural livelihoods in Lao PDR.

Investment Timeframe

Medium Term (5–10 years)

Market Size

< USD 50 million

Lao PDR | Food and Beverage

Advanced Cold Chain Solutions for Food Safety and Quality

Expected Impact

The cold storage industry in Lao PDR aims to improve food security, reduce waste, and foster economic inclusion by extending the shelf life of perishable goods and creating job opportunities in rural areas

Investment Timeframe

Medium Term (5–10 years)

Market Size

USD 50 million - USD 100 million

Lao PDR | Services

Agro Tourism

Expected Impact

IOA fosters sustainable growth in local communities via agro-tourism, which through employment opportunities promotes gender equality and inclusion.

Investment Timeframe

Short Term (0–5 years)

Market Size

USD 100 million - USD 1 billion

Countries

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Cambodia

Over the two decades before the COVID-19 pandemic, Cambodia underwent a significant transition, reaching lower middle-income status in 2015 and expressing the aspiration of attaining upper middle-income status by 2030. Driven by garment exports and tourism, Cambodia’s economy sustained an average annual growth rate of 7.7 percent between 1998 and 2019, making it one of the fastest-growing economies in the world.

In 2020, however, the crisis unleashed by COVID-19 negatively affected three main sectors of Cambodia’s economy: tourism, manufacturing exports, and construction, that contributed more than 70 percent of the country’s economic growth and provided 39 percent of its total paid employment in 2019.

Cambodia has adapted to COVID-19. Real growth is estimated to have reached 3 percent in 2021. The authorities have relaxed travel restrictions in an effort to sustain business activity. About 83 percent of the population have received two doses of COVID vaccines. Amid eased mobility restrictions, economic recovery is underpinned by a strong rebound in manufacturing and sectors such as agriculture. Meanwhile, the recovery of the service sector and, especially, tourism -- an important source of employment -- remains sluggish. Since Cambodia is an energy and food net importer, rising energy and food prices due to the war in Ukraine need to be addressed to ensure income levels and consumer confidence are maintained to avoid increase in poverty levels.

Cambodia has recently redefined the poverty line, using the most recent Cambodia Socio-Economic Survey for 2019/20, based on cost-of-basic need, and a common basket approach. Under the new national poverty line, about 18 percent of the population is identified as poor. Poverty rates vary considerably by area. The poverty rate is the lowest in Phnom Penh (4.2 percent), other urban areas (12.6 percent), and the highest in rural areas (22.8 percent).

Over the period 2009-2019/20, poverty rates declined by 1.6 percentage points per year, driven substantially by rising labor (especially wage) earnings. In addition, the scale up of social assistance to poor and vulnerable households, launched in June 2020, has moderated income losses due to the pandemic. The increase in the poverty rate in 2020 is projected to have been limited to an increase of 2.8 percentage points. The negative impacts of the pandemic on non-farm family businesses remain substantial, caused mainly by weak consumer demand. Nearly half of households report declines in income between December 2020 and March 2021. This suggests that a proportion of households that are negatively affected by COVID-19 continue to suffer from income loss, which could lead to an increase of poverty.

Cambodia has made considerable strides in improving health outcomes, early childhood development, and primary education in rural areas. Life expectancy at birth has risen from 58 years in 2000 to 70 years in 2020. The maternal mortality ratio per 100,000 live births has decreased from 351 in 2005 to 160 in 2017; the under-five mortality rate has decreased from 106.3 per 1,000 live births in 2000 to 26.6 per 1,000 in 2019; and the infant mortality rate has fallen from 78 per 1,000 live births in 2000 to 22.8 per 1,000 in 2019. In 2021, net enrollment rates for primary, lower secondary, and upper secondary sub-sectors reached 91.9 percent, 60.7 percent, and 32.2 percent, respectively. The net pre-primary education enrolment rate for five-year-olds rose from 24.6 percent in 2004 to 61.08 percent in 2021. As of 2020, 15 percent of Cambodia’s population (2.5 million people) did not have access to improved water, and 23 percent (3.8 million people) did not have access to improved sanitation.

Key reforms are needed for Cambodia to sustain pro-poor growth, foster competitiveness, sustainably manage natural resource wealth, and improve access to and quality of public services. Cambodia continues to have infrastructure gaps and would benefit from greater connectivity and investments in rural and urban infrastructure. Further diversification of the economy will require fostering entrepreneurship, expanding the use of technology, and building new skills to address emerging labor market needs. Accountable and responsive public institutions will also be critical.  The quality of human capital will be of utmost importance to achieve Cambodia’s ambitious goal of reaching middle-income status by 2030.

The Royal Government of Cambodia has developed long-term development objectives, namely through the creation of the Cambodia Vision 2050 and Cambodia Sustainable Development Goals (CSDGs). Mid-term plans such as the Rectangular Strategy (RS) and the National Strategic Development Plan (NSDP) are used as policy instruments to achieve these long-term objectives. The Royal Government is committed to Cambodia’s transition to an upper-middle-income country by 2030 and a high-income country by 2050.

The Cambodia SDG Investor Map has been created to showcase business prospects with a supportive policy environment that can have a significant influence on sustainable development within the country. Located in the heart of the ASEAN, Cambodia is still perceived by many investors as a ‘frontier’ market that is smaller and less liquid than some neighbouring economies like Viet Nam. Challenges do exist, with VCs and PEs mostly reporting the lack of investible pipeline, lack of demonstrated success, and challenges in making investment exits (due to limitations of the local stock market), exacerbated by limited local expertise and capacity to assist with project sourcing and due diligence, making costs of investments very high.

However, an increasing number of opportunities are available in Cambodia for both small and large investors. The competitive advantages of the country, including that it is a small-sized market, has a central location in ASEAN, is a business-friendly environment with a young and tech-savvy population, and has a proven ability to leapfrog - as has been the case with mobile penetration and digital banking - make it an ideal base to run pilot projects that can then be rolled out throughout the region. Another interesting feature is the rise of local investment through private equity and angel networks that has the potential to build stronger foundations for local investment if properly supported.

Indonesia

The largest economy in Southeast Asia, Indonesia – a diverse archipelago nation of more than 300 ethnic groups – has charted impressive economic growth since overcoming the Asian financial crisis of the late 1990s.

Today, Indonesia is the world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing power parity, and a member of the G-20. Furthermore, Indonesia has made enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999, to just under 10 percent in 2020.

Indonesia’s economic planning follows a 20-year development plan, spanning from 2005 to 2025. It is segmented into 5-year medium-term development plans called the RPJMN (Rencana Pembangunan Jangka Menengah Nasional), each with different development priorities. The current medium-term development plan is the last phase of the long-term plan. It aims to further strengthen Indonesia’s economy by improving the country’s human capital and competitiveness in the global market.

Population	270.2 million (2020 Population Census)
Provinces	34 provinces spread over five main islands- Sumatra, Jawa, Bali & Nusa Tenggara, Maluku & Papua, Sulawesi and Kalimantan.
Income category	Lower Middle Income
GNI Per Capita (USD)	3,870
Demographic dividend	Over 68% of the population is aged between 15 and 65, with a low dependency ratio and a dynamic workforce with high literacy rates
Investment climate	Currently ranks 4th as a global investment destination after India, China, and the USA. It is the largest economy in South-East Asia and the 4th largest consumer market in the world
Ease of doing business rank	73 of 190 countries
Human Development Index	107 of 189 countries
Total private sector Investment Realization by value	USD 29 billion (FDI) and USD 29.8 billion (DDI) as of 2020

Lao PDR

The Lao People’s Democratic Republic’s (Lao PDR) economy is expected to expand moderately over 2024 and 2025, due to external demand linked with tourism and trade, according to a new Asian Development Outlook (ADO), April 2024 report.

ADB forecasts gross domestic product (GDP) growth of 4% in 2024 and 2025. External demand will support growth in services, with international tourist arrivals projected to increase to 4.2 million in 2024 thanks to improved infrastructure connectivity. Foreign investment in renewable energy will help drive moderate industrial growth, such as the development of the Monsoon Wind Power Project which is expected to be completed in 2025. However, macroeconomic pressures will continue to weigh on growth prospects.

The Lao PDR’s economic and financial challenges—notably high public debt, steep currency depreciation, and elevated inflation—are contributing to persistent food and nutrition challenges. High food inflation is of particular concern, averaging 39.5% in 2023. One in seven people in the country experienced food insecurity in 2023, with rural dwellers twice as likely as urban dwellers to face shortages. Food insecurity and poor nutrition come at a high cost, including stunting from malnutrition which can lower a child’s productivity over their lifetime.

The government has acted to ease household stress by working with development partners to expand social assistance, improve health services, and invest in clean water and sanitation. Looking ahead, it will be crucial to develop long-term, sustainable financing mechanisms to tackle the multidimensional nature of food security amid macroeconomic instability. This involves reforms to overcome economic and financial challenges and further improvements to social assistance that are nutrition-sensitive and climate-resilient.

Development agencies such as ADB, IMF, UNDP have clearly outlined the role of private sector in shaping Lao PDR’s investment outlook that can be attractive for investors and boost the economy to address some of the development challenges described above. For example, ADB’s country strategy to improve private sector ecosystem in Lao PDR includes improving business environment and using regional platform funds to grow enterprises, create an enabling environment for Public Private Partnerships (PPPs) and support climate resilient investments. Similarly, as part of UNDP’s strategy for Lao PDR between 2022 and 2026, there is a significant focus on addressing governance related bottlenecks that can help improve direct private sector investments into the SDGs.

Malaysia

Since gaining independence in 1957, Malaysia has successfully diversified its economy from one that was initially agriculture and commodity-based, to one that now plays host to robust manufacturing and service sectors, which have propelled the country to become a leading exporter of electrical appliances, parts, and components.

Malaysia is one of the most open economies in the world with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of jobs in Malaysia linked to export activities. After the Asian financial crisis of 1997-1998, Malaysia’s economy has been on an upward trajectory, averaging growth of 5.4% since 2010, and is expected to achieve its transition from an upper middle-income economy to a high-income economy by 2024.

However, the COVID-19 (coronavirus) pandemic has had a major economic impact on Malaysia, particularly on vulnerable households. Having revised its national poverty line in July 2020, 5.6% of Malaysian households are currently living in absolute poverty. The Government is focused on addressing the well-being of the poorest 40% of the population (“the bottom 40”). This low-income group remains particularly vulnerable to economic shocks as well as increases in the cost of living and mounting financial obligations.

Population	32.7 million (2022)
GDP (millions)	372,980.96 (2021)
GINI index Central	41.2 (2018)
Government Debt	60.4% (2022)
Trade/Export (% of GDP)	131% (2021) / 68.8% (2021)
Natural resources	Petroleum, natural gas, tin, timber, copper, iron ore, bauxite, gold, coal, palm oil, rubber, paddy, among others.
Languages	Malay (official language), English, Chinese (Mandarin, Cantonese, Hokkien), Indian (Tamil, Hindi) and over 100 Indigenous languages
Currency	Ringgit (RM, currency code: MYR)

Source: World Bank, Malaysia Country Overview

Thailand

Over the last four decades, Thailand has made remarkable progress in social and economic development, moving from a low-income to an upper middle-income country in less than a generation. As such, Thailand has been a widely cited development success story, with sustained strong growth and impressive poverty reduction. Thailand’s economy grew at an average annual rate of 7.5% in the boom years of 1960-1996 and 5% during 1999-2005 following the Asian Financial Crisis. This growth created millions of jobs that helped pull millions of people out of poverty. Gains along multiple dimensions of welfare have been impressive: more children are getting more years of education, and virtually everyone is now covered by health insurance while other forms of social security have expanded.

However, the growth prospects from the export-led model that not long ago powered so much of Thailand’s economic growth seem to have diminished significantly, owing to a stagnation in productivity. Private investment declined from more than 40% in 1997 to 16.9% of GDP in 2019, while foreign direct investment flows and participation in global value chains have shown signs of stagnation.

Thailand’s 2020 Human Capital Index (HCI) of 0.61 indicates that the future productivity of a child born today will be 39% below what could have been achieved with complete education and full health. Thailand is renowned for its universal health care program (UHC) and success in child nutrition, but quality of education remains a weak point for the country’s human development. According to the Index, the country ranks high in quantity (expected years) of schooling and in the fraction of children not stunted, but low in education quality—measured by harmonized test scores. Social assistance schemes are fragmented, with untapped opportunities to modernize the level of benefits packages and efficiency.

The increasing frequency of natural disasters is also a threat to sustained economic growth, as it has come at the cost of the environment and inclusion. Greenhouse gas emissions have risen markedly during this recent period of rapid growth, as has inequality between the country’s regions and firms. Thailand is a major marine plastic polluter on land, in river systems, and along coastlines. With the country’s National Action Plan on Marine Plastic Debris 2023-2027, and Bio-Circular-Green Economy (BCG Model), Thailand set out the goal to identify public-private-people mechanisms for plastic waste segregation and enhance plastics circularity.

The Philippines

The Philippines has been one of the most dynamic economies in the East Asia and Pacific region. With increasing urbanization, a growing middle class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances.

The private sector remains buoyant, with positive performance from the services sector including business process outsourcing, wholesale and retail trade, real estate, and tourism. Poverty rate declined from 23.3 percent in 2015 to 18.1 percent in 2021 despite the shocks endured through the COVID-19 pandemic and other global headwinds such as high global commodity prices and tight global financial conditions. The Philippine government pursues larger investments in both human and physical capital to boost growth over the medium and long term.

The Philippines’ economic recovery is well underway, as growth increased to 7.6 percent in 2022 from 5.7 percent in 2021. Over the medium-term, the growth outlook will continue to be supported by strong domestic demand, driven by a robust labor market, continued public investments, and the positive effects of recent investment policy reforms which could boost private investment. With continued recovery and reform efforts, the country is getting back on track on its way from a lower middle-income country with a gross national income per capita of US$3,950 in 2023 to an upper middle-income country (per capita income range of US$4,466 - US$13,845).

Vietnam

Vietnam has been a development success story. Economic reforms since the launch of Đổi Mới in 1986, coupled with beneficial global trends, have helped propel Vietnam from being one of the world’s poorest nations to a middle-income economy in one generation. Between 2002 and 2021, GDP per capita increased 3.6 times, reaching almost US$3,700. Poverty rates (US$3.65/day, 2017 PPP) declined from 14 in 2010 to 3.8 percent in 2020.

Thanks to its solid foundations, the economy has proven resilient through different crises, the latest being COVID-19. GDP growth slowed to 2.6 percent in 2021 due to the emergence of the COVID-19 Delta variant and is expected to rebound to 7.2 percent in 2022 and 6.7 percent in 2023.

Growing at 2.5 percent to 3.5 percent per year over the past three decades, the agriculture sector has supported economic growth and ensured food security. It contributed 14 percent of GDP and 38 percent of employment in 2020 while earning more than US$48 billion in export revenues in 2021 during the peak of the COVID-19 pandemic.

Population	98.17 million (2021 Population Census)
Provinces	Divided into 58 provinces and 5 municipalities under the command of the central government
Income category	Lower Middle Income
GNI Per Capita (USD)	3,560
Demographic dividend	Over 68% of the population is aged between 15 and 65, with a dependency ratio of approx. 46% and a high literacy rate of approx. 98%
Investment climate	Currently ranks 20th out of 201 markets as a global investment destination. It is the 3rd largest economy in Southeast Asia and the 4th fastest growing consumer market in the world.
Ease of doing business rank	70 of 190 countries
Human Development Index	115 of 189 countries
Total private sector Investment Realization by value	USD 28.5 billion (FDI) as of 2020

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