Laos Receives Further Support from the World Bank to Reduce Poverty and Implement Economic Reforms

June 17, 2008

WASHINGTON, DC, June 17, 2008 – Lao People’s Democratic Republic will receive additional assistance from the World Bank in the form of grants to continue its drive to foster economic growth and fight poverty in the country.

“This assistance aims to further the strong reform progress the Government has made in the past couple of years as well as to help Laos have a more comprehensive approach to provincial development,” said Patchamuthu Illangovan, World Bank Country Manager for Laos.

A US$10 million grant from the fourth Poverty Reduction Support Operations (PRSO) will assist the country in continuing to support poverty reduction efforts through budget support for the delivery of better public resource management, public expenditure policy reforms and more sustainable growth. This will help Laos improve the climate for investment, sustain growth, facilitate trade, improve the management of natural resources and advance delivery of social services.

The package of PRSOs is an integral part of the World Bank’s support in the country. The fourth installation of PRSO was prepared in collaboration with the European Commission and the Governments of Japan and Australia.

A grant of US$6 million under the Customs and Trade Facilitation Project will facilitate trade by improving the efficiency and effectiveness of customs administration. The project will simplify customs procedures, eliminate duplication and redundancy, reduce transaction costs and time to clear goods, and increase transparency and accountability.

Meanwhile the Khammouane Development Project will help to strengthen the planning processes and public financial management associated with the decentralized delivery of services and infrastructure, including irrigation development, in the Province. The US$9 million grant will support rural development sub-projects at the district and the village level as well as the development of provincial capacity in various areas. The project will also assist with the rehabilitation and development of irrigation facilities in Gnommalat District and lower Xe Bang Fai River utilizing the discharge water from the Nam Theun 2 hydropower station – thereby also furthering the potential of the NT2 project.

Last year the World Bank strengthened it Country Assistance Strategy to continue providing support to Laos to foster economic growth, strengthen the delivery of social services, strategically develop capacity and establish stronger partnerships, and successfully implement the Nam Theun 2 Project. The strategy also aims to strengthen governance in the country while supporting programs for social inclusion.

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