Last Updated: September 2017
The Poverty Reduction Fund (PRF) is the largest multi-sector community-driven development project in the country. The PRF II project, with total funding of about $65 million including $37.6 million from IDA and $10 million from the Government of Lao PDR, has benefited more than 650,000 rural poor in about 1,400 villages. In PRF II target villages, access to protected water increased by nearly 60 percentage points, and travel time to the nearest village was reduced on average by 114 minutes in the dry season and about 70 minutes in the wet season. More than 90% of subprojects implemented 4–6 years ago are still in good or fair condition, and PRF investments are overall equally or more cost effective compared to similar investments financed under other sources. The third phase, PRF III, was approved in May 2016 and will continue to improve access to vital infrastructure including schools, health clinics, roads and drinking water systems in about 250 poor kumbans (village clusters) in 10 provinces, with funding from IDA of $30 million and $6 million from the Government of Lao PDR.
The Health Services Improvement Project (HSIP) closed in December 2015 and assisted the Government to increase utilization and quality of health services for poor women and children, particularly in the rural areas of five provinces—Attapeu, Champassack, Salavan, Savannakhet, and Sekong. Its preliminary results showed that 780,000 poor people were provided with access to a basic package of health, nutrition, or reproductive health service. Nearly 900,000 poor patients benefited through health equity funds, 424 health facilities were constructed and renovated, and more than 3,350 health personnel received training.
Building on HSIP is the Health Governance and Nutrition Development Project, which started in October 2015 and aims to improve the coverage of reproductive health, maternal health, child health and nutrition services for women and children in Lao PDR. Over five years, the project is expected to benefit approximately one million women and children across 14 provinces. The project uses an innovative approach of linking disbursement of funds to improved performance in the delivery of basic health services. In addition, through a social and behavior change communication program for caregivers, children in high priority nutrition districts will benefit from improved counselling, changed behaviors and practices, and follow up of their growth. The project further includes support for strengthening information systems and technical assistance in improving the performance of health financing and health protection programs, with a view to progress toward Universal Health Coverage in Lao PDR.
The Second Education Development project focused on helping Lao PDR work towards universal primary education, and contributed to improving both enrollment and primary completion rates. The project, which closed in 2013, focused specifically on poor and remote areas that were not supported by other development projects. The school construction model used under this initiative led to schools being substantially cheaper, even though they were located in remote areas. Through the project, 2462 classrooms were built or rehabilitated at the primary level, serving 781 primary schools. Most of the schools have operated for 8-10 years without any major maintenance or renovation.
The NT2 Hydropower Social and Environmental Project is helping to finance health care and education in Lao PDR through the sale of electricity to Thailand and to the Lao grid. Government revenues generated by the NT2 project are used to finance priority poverty reduction, environmental management, and natural resource conservation projects in Lao PDR. Since the start of commercial operations in 2010, NT2 has consistently met or exceeded energy production targets. NT2 is jointly implemented by the Nam Theun 2 Power Company and the Government of Lao PDR and is supported by financing from 27 parties, including the World Bank Group.
The Customs and Trade Facilitation Project is helping to make border clearances faster and more efficient. A computerized customs clearance system, which now operates in 24 official customs checkpoints, takes payments electronically and provides this information in real-time to the Government’s financial management system. The automated customs system—ASYCUDA World—covers 99% of formal trade at these checkpoints and has improved customs valuation, introductory risk management and trade statistics reporting. As part of the project, customs clearance procedures are now streamlined and modernized by reducing customs clearance steps from 5 to 4 for imports and 4 to 3 for exports, effective on March 1, 2017. Being a landlocked country, trade costs remains relatively high but the average time to clear imports, exports and transits by Lao Customs has fallen significantly by 47%, from 17.9 hours in 2009 to 9.4 hours in 2017.
The Second Trade Development Facility Project (TDF-2) assists Lao PDR to implement trade and competitiveness priorities after its formal World Trade Organization accession in February 2013. It builds on the achievements of TDF-1, which established a permanent National Trade Facilitation Secretariat and launched an electronic Trade Portal making all trade-related information publicly available. Under TDF-2, all non-tariff measures affecting trade have been catalogued and published online, and assessments of regulations affecting trade in services and investment, as well as sector specific regulations for telecommunications, insurance and professional services, have been completed. A matching grant, “Business Assistance Facility”, supported individual firms in building their skills and experience to become more competitive internationally.
The Scaling-Up Participatory Sustainable Forest Management project has been working to build a solid foundation of sustainable forestry in Lao PDR, and has contributed to 2,242,257 hectares of forest area currently brought under management plans, as well as supports to legislation and regulation reforms. Complementing this effort, the Second Lao Environment and Social project is helping to strengthen environmental protection management systems, specifically for the conservation of protected areas, enforcement of wildlife laws, and environmental assessment management. This has led to 67 forest law enforcement patrols that have discovered wildlife crimes.
The Lao Road Sector Project 1 has helped Lao PDR improve key national road services, rehabilitate roads damaged by Typhoons Ketsana and Haima, and enable quicker disaster response in the road sector as well as maintenance of provincial roads. Vehicle travel time on upgraded national roads has been reduced by 40%, benefiting over 100,000 people who are regular users. The share of the provincial road network in good and fair condition increased from 46% to 64%, and about 1,100 km of roads damaged by Ketsana have been repaired and improved. Road safety facilities were installed at identified blind spots to help reduce accidents. A contingency fund was established for quick restoration of passage and safety of national and provincial roads following disasters. The project also supported the Ministry of Public Works and Transport to enhance capacity for sector planning and management, road asset management, and implementation of road maintenance works at both central and local levels. The Road Sector Project 2 is now building on these achievements, and aims to strengthen maintenance systems to improve reliable road connectivity and provide immediate and effective response in case of crisis or emergency.