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Firms, entrepreneurs and employees in Lao PDR to benefit from improved business environment

December 4, 2012

New grant financing for the Second Trade Development Facility approved by World Bank Board

WASHINGTON, December 4, 2012 – The World Bank Board of Executive Directors today approved US$ 4 million in grant financing for the Second Trade Development Facility (TDF-2), co-financed with a Multi Donor Trust Fund of US$ 10 million with contributions from Australia, the European Union, Germany, and Ireland. The grant builds on the progress of the original US$ 7.6 million project, which was approved in 2008.

The newly approved financing will build upon the results achieved under the original Trade Development Facility, aimed at supporting the implementation of the government’s trade and integration priorities, and in particular to contribute to improved competitiveness and diversification in the non-resource sectors.

The first Trade Development Facility, focused on trade facilitation reforms for non-customs agencies; providing core support to WTO accession, including technical capacity development for negotiations, legal and regulatory reform with a priority on sanitary and phytosanitary measures, and accession impact evaluations; broad support to trade-related research, and sector investments in competitive sectors including in garments manufacturing.

The Lao PDR Government’s 7th National Socio-Economic Development Plan outlines specific objectives for increased international and regional integration as a means of achieving economic and social development targets. Accession to the WTO and deeper integration with ASEAN will entail challenges for the Government, including the need to follow through on  implementation of legal reforms enacted in recent years.

“This grant financing is a timely contribution in support of Lao PDR’s trade and integration program. A key priority for TDF-2 will be to progressively shift from a pre- to post- WTO accession agenda, with an increased focus on implementing reforms and following through of commitments at a level that directly benefits the private sector,” said Richard Record, World Bank Trade Specialist and Team Leader for the project.  

With this grant, the Bank seeks to address the binding constraints to increased integration by Lao PDR into the regional and multilateral trading system by supporting trade facilitation and policy activities that will improve transparency, predictability and lower associated compliance costs for traders. At the same time, the project will focus on trade diversification and competitiveness by supporting private sector capacity to improve productivity in order to compete more effectively in international markets. In addition, it will strengthen the technical capacity on trade and private sector development within the Ministry of Industry and Commerce to support stronger implementation of trade programs in Lao PDR, as a part of a movement towards a program-based approach for trade and private sector development.

The project is also a key part of continuing efforts to improve the efficiency of development assistance, by pooling resources from the World Bank, Australia, the European Union, Germany and Ireland into a single program. This results in increased efficiency of implementation, reduced transactions costs and greater impact on-the-ground.

The Second Trade Development Facility is an important part of the Lao PDR Country Partnership Strategy endorsed by the World Bank Board in March 2012, which aims to improve competitiveness and connectivity, in particular, to strengthen government capacity to support growth diversification and competitiveness.  


Media Contacts
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Chisako Fukuda
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Souridahak Sakonhninhom
Tel : (856-21) 266-200