In Laos, Southeast Asia’s highest inflation forces some to flee, others to get creative

As well as selling rice and vegetables, Somchit Phankham conducts guided tours and offers courses on cookery and ceramic-making at Panyanivej Organic Farm.

Highly dependent on imports, the Southeast Asian nation has seen prices for basic necessities, from food to transport, surge. Those paid in kip are suffering most, as their incomes fail to keep pace with inflated prices.

Laos’ economic woes have put Somchit in a bind. The workers she relied on to help grow produce on her farm have fled the country, seeking better wages in neighbouring nations.

“Workers are also shifting from wage jobs and unpaid family work to self-employment and family businesses. Labour shortages have appeared in some sectors,” it said.

Somchit fears the labour shortage could last for years, especially as students abandon local schools and universities to find work and make money instead amid Laos’ surging inflation.

“Economics is the main reason, and people don’t see any reason to have education,” she said.

Phouphet Kyophilavong, a leading Laos economist, warned against overstating the weakness of the country’s economy.

While some Laotians paid in the local kip currency are seeking better-paying jobs, others may fare better. Many in Laos do business in stable foreign currencies such as the US dollar and Thai baht, and they also have savings in the same currencies, according to the professor at the National University of Laos.

He said Laotians also owned other assets like gold and grow their own food, reducing their need to import basic necessities.

Laotians had learned to protect themselves from the weak kip and the ravages of high inflation since the 1997-1998 Asian financial crisis, Phoupet said.

To shore up the kip, which was hit hard by a pandemic