Over half a century ago, Lao PDR began its journey to become a modern nation and committed itself to long-term development ambitions. It has delivered electricity, schools, roads, and has become an important energy exporter. Read More »
Lao PDR is on an increasingly sustainable development path. Reforms underway have helped reduce poverty and stimulate broad-based growth. The economy has expanded on average by 7.1 percent per year from 2001 to 2010, and is expected to grow by 7.6 percent per year in 2011-2015.
Natural resources - forestry, agricultural land, hydropower, and minerals - comprise more than half of the total wealth of Lao PDR. The hydropower and mining sectors combined accounted for about one third of the country’s economic growth between 2005 and 2010. The growth in these sectors has resulted in significant increases in revenue which has translated into poverty reduction. It has also spurred progressive changes in environmental legislation.
Lao PDR is increasing its integration into the regional and global economy. It is located in one of the fastest growing regions of the world economy which has strategic importance in terms of potential for growth in cross-border investment and exports (including hydropower and mineral products) to rapidly industrializing neighboring countries. Lao PDR is a member of the Association of Southeast Asian Nations (ASEAN) and the ASEAN Free Trade Area. On February 2, 2013, Lao PDR has officially become a full member of the World Trade Organization.
Available data suggests that, while Lao PDR made significant progress on many of the Millennium Development Goals (MDGs), some are off track including malnutrition (40 percent of under-five children are stunted), measles immunization, skilled birth attendance, and some dimensions of gender equality (for instance, girl’s equal enrolment in tertiary education). In its Sixth National Social and Economic Development Plan (NSEDP) 2006-2010 (which is a successor to the National Growth and Poverty Eradication Strategy), the government laid out its poverty reduction strategy to meet the MDGs by 2015. It aims to foster economic growth with equity, develop and modernize the country’s social and economic infrastructure and enhance human resource development.
Critical reforms towards this end are receiving priority in the Seventh NSEDP 2011-2015. The World Bank Group (WBG) continues to work with the government as it lays the foundations to graduate from Least Developed Country status. The World Bank Group’s operations in the country are guided by the Country Partnership Strategy (CPS) for 2012 to 2016, designed in consultation with a range of stakeholders in Lao PDR to support the Government’s Seventh NSEDP and build stronger institutions for sustainable and inclusive development.
The CPS for Lao PDR 2012-2016 has three strategic objectives, together with a cross-cutting theme of stronger public sector management.
Competitiveness and Connectivity. The World Bank Group supports efforts towards improved trade facilitation, economic diversification and a better investment climate through project financing and analytical work. It also aims to help government improve people’s access to transport and energy infrastructure services to facilitate regional connectivity.
Sustainable Natural Resource Management. Through project financing and advisory services, the World Bank Group assists in strengthening government capacity to make informed decisions on resource-based investments. It also supports the government in strengthening and implementing institutional, legal and regulatory frameworks that aim for sustainable development of natural wealth – water resources, minerals, forests and biodiversity - and mitigate the environmental and social impacts of natural resource development.
Inclusive Development. The World Bank Group continues to support the government in providing essential maternal and child health services and access to quality primary education in targeted, disadvantaged districts. It also builds on successful community driven platforms to assist communities in remote and poor areas, particularly among ethnic groups and women, to benefit from increased opportunities to participate in and benefit from development and livelihood activities.
The partnership between the government of Lao PDR and the World Bank Group has generated tangible results over the years in various sectors.
The NT2 Multi-purpose Hydroelectric Project, inaugurated in December 2010, is now generating resources for poverty reduction and environmental protection programs in the country. NT2 implementation, to date, is proceeding well. The World Bank and the Asian Development Bank remain committed to working closely with the government, Nam Theun 2 Power Company, and communities to ensure that project obligations are met and the people of Lao PDR continue to benefit from the project.
The First and Second Education Development Projects helped improve quality of education in six provinces by developing a range of teaching-learning tools. Under these projects, 443 schools were built, approximately 4,000 teachers were trained, and more than two million textbooks were distributed.
The World Bank has supported the government in improving the road network in the country and in increasing people’s access to health, education and markets for the past 20 years. For example, Road 13—the backbone of the country’s road transport network—was extended by 200 kilometers under the Third Highway Improvement Project. This resulted in vehicle operating cost savings of about US$39 million. The Road Maintenance Program strengthened the road sector institutions by expanding financing, management and maintenance systems for the road networks in all 17 provinces. As a result, the conditions of 83 percent of the paved national road network, 46 percent of the provincial road network, and 37 percent of district roads have improved.
The Rural Electrification Project is extending the electricity grid to rural households in southern provinces and is also promoting off-grid renewable energy throughout the country. 71 percent of households now have access to electricity, and distribution losses have reduced from 19 percent (1998) to less than 14 percent (2008). This has also resulted in greenhouse gas emission reductions.
In health, the Community Nutrition Project is improving care practices for pregnant women, lactating mothers, and children below two years. The project also supports community-based health and nutrition programs as well as conditional cash transfers where monetary incentives are given to the health centers for implementing key maternal and child health services as well as for mothers who are using the services.