In Lao PDR there are widespread disparities in education access. The poorest districts in the country experience systematic disadvantages in a wide variety of educational indicators. Children from poor households, non-Lao-Tai ethnic groups and in rural areas display substantially lower enrolment trends than those from non-poor households, Lao-Tai ethnic groups and urban areas. At the lower secondary level, the differences between sub-groups (poor/non-poor, Lao-Tai/non-Lao-Tai and urban/rural) have become more significant. Gender disparities are however wider in urban areas, partly attributable to the overall low net enrolment rate at lower secondary level in rural areas, even for boys. It has been observed that the most disadvantaged populations cannot be reached with conventional approaches alone, that is, more classrooms, more teachers and more textbooks. New and group-specific approaches are required that meet the specific needs of these groups; e.g., multi-grade teaching and teaching adapted to the needs of children who come to school speaking a language other than Lao  (UNESCO 2008). 

Disparities between different ethnic groups are evident when looking at literacy rates. According to the Population and Housing Census (2005), the literacy rate in urban areas is 89% while in rural areas it is only 54%. The literacy rate for the non-Lao-Tai ethnic groups is 49%, with 33% for females and 65% for males, which is relatively low in comparison to the Lao-Tai ethnic groups, with 77% for females and 90% for males  (UNESCO 2008).

Lao education still has a long way to go in terms of quality, in order to be able to reach international standards and meet the demands of society and the labour market. Although several actions have been taken, some issues still exist, such as inadequate infrastructure and facilities, a shortage of textbooks and teaching materials, insufficient instruction time, curriculum deficiency and a shortage of and low quality of teachers at all levels of education. The high repetition and drop-out rates, especially in primary education, result in lower educational attainment and contribute to inefficiencies in education provision. On average, it takes about eight years to complete five years of primary education and the proportion of students completing the full cycle of primary and secondary education is relatively low  (UNESCO 2008).  

Three issues provide a challenge for improving the quality of education at school level: (i) the lack of provincial and district technical staff to provide support; (ii) the low quality of provincial and district technical staff in providing adequate support on educational and managerial issues; and (iii) a shortage of funds for monitoring and supervision by provincial and district technical staff, where the major issue is the very low level of non-wage recurrent funding for education  (UNESCO 2008). 

Public expenditure on education as a share of GDP is relatively low and Lao PDR relies heavily on external funding. The education budget was 2.3% of GDP in 2008 (UIS 2009), and the share of the Government’s budget allocated to education was 17% in 2010-11, which includes all human resource development activities across all sectors. Around 20% of the MoES budget is allocated towards primary education, and around 50% on administration and personnel. In general, the recurrent budget is funded by domestic resources under the responsibility of the Ministry of Finance (MoF), and the investment budget is to a large extent funded by external resources and managed by the Ministry of Planning and Investment (MPI) with MoF’s involvement (UNESCO 2008).  

Strengthening planning and management in the education sector has been one of the main priorities in Lao PDR. The Education Sector Development Framework (ESDF) 2009-15 proposes measures for better harmonization of external assistance to the sector and a shared commitment to mobilizing the necessary resources for reducing funding gaps. Other immediate priorities are to: (i) expand the number of classrooms nationwide; (ii) recruit qualified and trained teachers to meet the needs of an expanding secondary school system and to ensure that all settlements and villages have access to a primary school; (iii) ensure that education officers are adequately trained to support education service delivery at all levels of education administration; and (iv) that ESDF priority action is directed to Lao PDR’s 47 poorest districts (MoE 2009). Based on the Education Sector Development Framework 2009-15, a Performance Assessment Framework (PAF) has been developed and the Department of Inspection was mandated with sector performance monitoring. In addition, several centers have been established in MOES to support monitoring and assessment of specific areas of education, such as the Education Standards and Quality Assurance Center, the Inclusive Education Center, the Strategic Research & Educational Analysis Center, the Education Statistics and Information Technology Center and the Education Administrator and Teacher Development Centre (UNESCO 2008).