Vientiane, Lao PDR (ILO News) – More than 20,000 garment workers in Lao PDR affected by the COVID-19 pandemic have benefited from emergency income support worth 18,628,200,000 LAK (approximately 1,815,260 US$).

At a virtual closing ceremony organized on 24th November 2021 for an initiative supported by ILO and the German government to protect garment workers affected by COVID-19 in Lao PDR, the Lao Social Security Organization (LSSO) reported that 20,698 garment workers from 47 garment factories in Lao PDR had each benefited from one-time cash transfers of 900,000 LAK (approximately 85 US$). The payments were made from March to October 2021.

The initiative supported the government’s social protection response to the pandemic. It provided cash assistance to workers in the garment sector, including those ineligible for government support due to not being registered with LSSO or having paid contributions for less than 12 months. Funding was provided by the German Federal Ministry for Economic Cooperation and Development (BMZ), with technical support from the International Labour Organization (ILO).

“Thanks to the German government and ILO, we were able to provide much needed income support to garment workers during this difficult time. The initiative has also helped strengthen our social security system payment mechanism, allowing us to transfer funds to beneficiaries who do not have bank accounts,” said Padeumphone Sonthany, Vice Minister of Labour and Social Welfare.

Ms. Bounpasong Sihalath , one of the garment workers from Lao Apparel factor attended the project closing ceremony today said that we face economic difficulties, and our work has become irregular. This income support has helped us overcome difficulties for a while during difficult time.

The scheme was developed in line with international social security standards including national ownership, joint oversight by government, employers and workers as well as transparent and accountable administration. The Association of Lao Garment Industry (ALGI) and the Lao Federation of Trade Unions (LFT) were involved in its development and supported the scheme’s operation.

“We are pleased to see how this income support helped workers and businesses survive a difficult period. It is especially important that those not normally eligible for unemployment benefits were included and that every effort was made to ensure no one was left behind,” said Graeme Buckley, Director of ILO Country Office for Thailand, Cambodia and Lao PDR.

The initiative was implemented by ‘piggybacking’ on LSSO’s existing delivery systems, helping reduce administration costs and speed up delivery, whilst easing the financial strain on the national unemployment insurance scheme. New payment systems were piloted by LSSO, with electronic payments made via local mobile network operators, increasing financial inclusion for garment sector workers, especially those without bank accounts.

Support was also provided to the Association of the Lao Garment Industry to strengthen occupational safety and health performance in garment factories and dormitories in relation to COVID-19 infection prevention through on improving health and hygiene in factories, and dormitories, including capacity building for dormitory managers and OSH Committees.