Economic integration in Southeast Asia is increasing, companies from neighbouring countries are gaining a foothold in Laos – with their own skilled workers. The demand for highly trained Laotian skilled workers is growing, but the education system has not yet been able to meet the demand either in terms of quality or quantity. This is why Financial Cooperation (FC) is supporting the establishment of a vocational training system.
On behalf of the Federal Government
KfW has been supporting the German Federal Government in implementing its development-policy goals since 1960 within the scope of Financial Cooperation (FC). We combine financing know-how with development-policy expertise. On behalf of the German Federal Government, and primarily the German Federal Ministry for Economic Cooperation and Development (BMZ), we promote and support programmes and projects that mainly involve public-sector players in developing and emerging economies.
Training geared to the needs of the economy
For Laotian workers, competition from the neighbouring countries of Thailand, Vietnam and China is growing. The authorities in Laos estimate that several hundred thousand additional skilled workers would be needed to meet the demand of the Laotian economy with local labour. However, practically relevant and forward-looking vocational training in particular has been lacking to date. For more than ten years, German-Laotian cooperation has therefore been supporting the establishment of a vocational training system.
Phases III and IV of the FC projects evaluated in 2018 financed school buildings, workshops and residential homes as well as equipment, machines and teaching materials at ten locations in the north and south of the country. Parallel to this, Technical Cooperation (TC) worked on training curricula that focused on the labour market. In the capital city of Vientiane the Lao-German Technical College (LGTC) was established as a vocational school that is now known beyond the country’s borders and offers flexible training courses geared to the needs of the economy.
While the ex post evaluation in 2014 (rating 4) remarked on the low utilisation levels of schools, supplied equipment and machines, in recent years the programme schools have seen an increase in enrolments and diplomas – an indication of the improved image of vocational training.
Whether a project is succesful or not is determined chiefly by asking the following questions: What has the project achieved for the people in the partner country? Has their situation improved in the long run? Three to five years after a project has been completed, the independent Evaluation Unit of KfW Development Bank conducts an independent evaluation for roughly half of the projects completed to draw lessons learned for future projects and programmes.More information on KfW's evaluation work
Close cooperation between vocational school center and private sector
At the flagship institution LGTC there are many more applications than places. The training courses in hotel management and electrical engineering are particularly popular. Many of the pupils want to open their own businesses in the future, so even more courses with training content tailored to this goal could be offered. However, the vocational schools are still organised too centrally: one vocational school per province with identical curricula and equipment, regardless of the local needs. Most likely it will still take some time before this relic from the centrally planned economy of the past is picked up by the Laotian reform policy, which was introduced in 1986 to promote openness and a gradual transition to a market economy.
A non-representative survey shows that roughly 55 per cent of the graduates surveyed from schools outside Vientiane found employment within three months of completing vocational school. The figures for the LGTC are considerably better: thanks to close cooperation with the private sector, graduates here are almost guaranteed a job. Mining and hydropower technology are taught here too, qualifications that are in great demand in the economy. With a view to establishing dual vocational training even more broadly, the private sector must be involved more closely in designing curricula. As trained professionals, graduates learn about the difficulties of the private sector from a different angle: administrative hurdles for business start-ups, lack of access to electricity and financing make it hard to work productively and start their own businesses, as so many want.
This article is taken from the 15th Evaluation Report, published in June 2019. The report documents the work of Financial Cooperation for the years 2017-2018.See the issue
A positive trend emerged between the evaluations of 2014 and 2018. However, the future success of the vocational schools depends on many factors: will it be possible to increase the number of teachers and their level of qualification? Will the schools be able to maintain their buildings and finance spare parts for equipment and machinery? Will the graduates prove themselves on the labour market, thereby adding to the prestige of vocational training? The LGTC points the way forward; its success was the decisive factor for the “good” rating of Phase IV.
Result: Phase III “satisfactory” – rating 3
Result: Phase IV “good” – rating 2
Published on KfW Stories: Thursday, 6. June 2019