Tag Archives: World Bank

World Bank Projects Positive Economic Growth for Laos

Economic Growth to Improve in Laos (Photo: That Luang Special Economic Zone)

The World Bank has projected that economic growth in Laos is expected to recover 6.5 percent in 2019, from 6.3 percent in the previous year, mainly driven by strong investment inflows to large infrastructure projects, including the Lao-China railway.

E-Commerce Benefits Require Access, Digital Connectivity At Right Cost in Laos

Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR

Barriers such as costs and strength of connectivity, infrastructure, facilitation must be overcome so ongoing development of e-Commerce in Laos can assist more women, small firms, people with physical disabilities, and those in isolated communities to benefit from trade, according to research from World Bank.

Technology, e-Commerce, and connectivity mean the potential for exporting goods and services from Laos has never been greater, yet obstacles remain to fully comprehend and grab some of the many opportunities on offer, according to research released by the multilateral financier, the World Bank.

The rapid growth of e-commerce globally, including in the Association of Southeast Asian Nations (ASEAN), helps lower the costs of trade for exporters from Laos and reduces prices for consumers, the research paper entitled Taking Advantage of E-Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PDR (English) has found.

It comes hot on the heels of the critical assessment on offer in the report Digital Connectivity in Lao PDR: Lagging Behind Peers featured by the Laotian Times: “Laos’ Online Connectivity Lagging Behind Peers As World Bank Research Reveals Extent, also in February 2019.

E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

What is e-Commerce?

“E-commerce refers to the buying and selling of goods and services digitally”, according to the definition used in the research,

“Although limited available information suggests that Lao PDR has a minimal presence of e-commerce, it has the potential to present many opportunities:”

  • E-commerce can help lower the costs of trade for Lao PDR exporters and lower prices for consumers.
  • It can also reduce barriers to people who face disadvantages participating in traditional trade (ie. women, people with disabilities, and isolated communities).

    E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

    E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

Constraints to the e-commerce environment currently hold Lao PDR back from greater participation.

  • Limited internet connectivity, high costs of payments, incomplete regulatory infrastructure, and high trade facilitation and logistics costs are limiting factors.

The legal and regulatory framework needs strengthening in some areas to support greater participation in e-commerce.

  • Strengthening the protection of consumers participating in e-commerce and developing/implementing legislation for the protection of personal data will be key.
  • Taxation of e-commerce is also a priority policy area.  Any reform should be informed by a careful assessment of costs and benefits to avoid restricting the early growth of e-commerce.

Trade facilitation also needs further reform to avoid posing undue costs on small firms or entrepreneurs trying to enter into e-commerce.

  • The earliest area of growth in international e-commerce would likely be cross-border trade.
  • Small firms and entrepreneurs are least equipped to manage costs related to shipment delays, lack of transparency, and unpredictable regulations.
  • Clarification on regulations for low-value goods imports and a formal framework to streamline the process are necessary.
E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

E-Commerce connectivity recommendations from World Bank via Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR.

The reports key recommendations:

  1. Implement relevant ASEAN approaches to regulatory issues related to e-commerce, with a special focus on consumer protection, privacy, and electronic signatures.
  2. Take a cautious approach to imposing new taxes on e-commerce.
  3. Establish a transparent and consistently applied procedure for handling low-value cross-border trade.
  4. Move away from submission or paper documents for trade clearance and toward electronic submission of documents.
  5. Increase effort to apply risk management principles in processing cross-border shipments.
  6. Confirm the leadership role of the Ministry of Industry and Commerce in the coordination of the e-commerce agenda.
Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR

Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR

Laos’ Online Connectivity Lagging Behind Peers As World Bank Research Reveals Extent

Taking Advantage of E-Commerce: Legal, Regulatory, and Trade Facilitation Priorities for Lao PDR

“Lao PDR is lagging significantly in terms of accessibility, quality, and affordability of internet services compared to other comparable regional economies,” a new report on digital connectivity states.

The grim assessment comes via The World Bank’s latest report on the country’s online connectivity entitled Digital Connectivity in Lao PDR: Lagging Behind Peers.

“Digital connectivity—access to affordable and reliable internet services—has become a key driver of economic and social development.”

Yet in Laos, according to the report, “by almost every measure,

  • Access to mobile broadband is increasing, but rural and more remote communities are still underserved.
  • Fixed broadband, which is required for high-capacity data transmission, is particularly limited.
  • Prices for internet are comparatively high.  High capacity fixed broadband services are very limited and extremely expensive.
  • The relatively high cost is slowing access, with mobile subscription and broadband internet subscription rates lower than in neighboring countries.
  • There is a minimum retail tariff regime for mobile, voice and data services, and this may reduce the ability of operators to compete on price and services.
  • Quality of service and affordability of internet are continuing concerns that are slowing the introduction and use of digital services and applications.
  • The average 2G/3G connection is on the low side for speed, and while the 4G connection speed falls within regional averages, Lao PDR is the only country in the region with only one operator offering 4G.
  • A qualitative survey of consumer attitudes suggests that consumers find internet speed slow and service unreliable, resulting in low value for money.
  • Regulatory capacity and expertise is increasing but remains comparatively low, further limiting market growth and investment.”

However, it’s not all bad news, with the Bank permitting an obligatory ray of optimism to shine upon its otherwise gloomy appraisal.

“Lao PDR is well-positioned to take advantage of digital connectivity to improve growth, competitiveness, and services provision,” it states “but interventions are needed to ensure that Lao PDR does not fall further behind regional peers.”

The Bank’s recommendations include the following…

  • Policy, legal, and regulatory reforms to stimulate investments in infrastructure needed to improve digital services
  • Increased private participation, with strategic use of public funds to support less commercially viable investments
  • Support for regulatory capacity building to ensure efficient use of resources
  • A review of the status of the national network to identify bottlenecks and infrastructure needs to deliver higher levels of traffic in the future
  • Improved reporting from the industry on access, pricing and service quality
  • Review of minimum retail tariffs for mobile services to determine whether they reduce price and quality competitiveness among operators”

Download the full report via the World Bank here.

Risk-Informed Development Road to Reducing Hazards Threatening Lives in Climate Change Age

Disaster Risk Reduction

“Hazards are not disasters (yet) they can wreak havoc and become disasters when people are vulnerable.

“Risk-informed development planning can ensure that vulnerability to natural hazards is minimized.”

This was the message as news media in Laos carried an opinion piece to mark International Day for Disaster Risk Reduction and the ASEAN Disaster Management Day on October 13 inked by the United Nations, European Union and World Bank.

It comes just a week after the landmark 2018 report of the UN Intergovernmental Panel on Climate Change (IPCC) released on Monday. The report revealed the latest forecasts on a future expected to see the intensity and regularity of extreme weather events on the rise.

“This year’s theme of “Reducing disasters’ economic losses” is more relevant than ever, and a key agenda item for Lao PDR,” the article read.

The call to understand the true costs of disasters was previously reported by the Laotian Times in an article entitled “Counting the Costs: Disaster Needs in Laos Accumulate as Gov, UN, EU, WB Calculate Impacts in September.

Read the opinion piece for International Day for Disaster Risk Reduction in full below…


Risk-informed Development

Assessing damages, losses and needs following a disaster

is the first step towards preventing and reducing

the impact of future natural hazards

by UN in Lao PDR, World Bank in Laos, EU in Laos

“We mark the International Day for Disaster Risk Reduction and the ASEAN Disaster Management Day every year on 13 October.

In Lao PDR – in the aftermath of tropical storms Sontinh and Bebinca and floods across all provinces – this day gives us an opportunity to raise awareness on disaster risk reduction, while securing and sustaining the participation of all.

This year’s theme of “Reducing disasters’ economic losses” is more relevant than ever, and a key agenda item for Lao PDR.

One of the three criteria for the country’s graduation from Least Developed Country status by 2024 is the Economic Vulnerability Index, which measures resilience to shocks and instability. There are concrete opportunities for Lao PDR to achieve this target by making disaster risk reduction an integral part of its development trajectory.

We jointly support this ambitious goal by working in close partnership with national and international stakeholders, as well as local communities.

Building back better

After a disaster, the primary focus is on how to respond to the needs of the affected communities and recover quickly and effectively. Reconstruction needs to be aligned with the principles of building back better, not only to ensure that livelihoods can be restored quickly but also to reduce the risks of future disasters. Doing so ensures that people are better equipped and better prepared to withstand shocks.

Global evidence shows that when countries rebuild stronger, faster and more inclusively, they can reduce the magnitude of the impact of future disasters on people’s livelihoods. During disaster recovery and reconstruction, risk management can be integrated across many sectors. Examples include implementing climate-resilient agricultural practices, reinforcing critical infrastructure, integrating risk management into investment decisions and budgets, and strengthening risk reduction policies.

Cooperation and innovation for response and recovery

Before reconstruction can start, it is crucial to assess damages, losses and needs, including the resources needed for the recovery phase. The Government of Lao PDR launched a nationwide Post-Disaster Needs Assessment on September 24th to inform the development of a Disaster Recovery Framework. This framework ensures that the response phase links up with early-, medium-, and long-term recovery activities and facilitates coordinated support from the international community, civil society, and the private sector.

The Post-Disaster Needs Assessment follows a well-tested methodology developed by the United Nations Development Group, the World Bank and the European Commission, and underpins cooperation mechanisms between agencies with complementary capacities.

It includes innovative approaches – such as satellite imagery to collect “big data” that can allow rapid geographic and spatial analysis.

The process is led by the Government out of the Ministry of Labour and Social Welfare and is inclusive of all stakeholders, including vulnerable social and ethno-cultural groups.

Risk-informed development

The shared goal is for Lao PDR to better address and contain the impact of future disasters.

Reaching this objective requires better integrating risk management into vulnerable sectors, strengthening preparedness and exploring innovative financial solutions, such as disaster risk insurance mechanisms.

Investing in resilience pays off at multiple levels: it saves lives and reduces the magnitude of destruction and losses. It also generates co-benefits, such as improving the quality of development and promoting sustainable approaches to tackle the impact of climate change.

The Post-Disaster Needs Assessment field work is currently underway across the country, with focus on the hardest hit provinces. Findings are expected by the end of October and will inform high-level discussions on both national planning and international development assistance.

Hazards are not disasters. They can wreak havoc and become disasters when people are vulnerable. However, risk-informed development planning can ensure that vulnerability to natural hazards is minimized. This, in turn, will increase the resilience of the people of Lao PDR, so that tragedies of recent extent are contained to the extent possible.”

This article was co-authored by the United Nations in Lao PDR, the World Bank Lao PDR and the Delegation of the European Union to the Lao PDR.

Ms Kaarina Immonen

Ms. Kaarina Immonen is the Resident Coordinator of the United Nations in Lao PDR and the UN Development Programme’s Resident Representative. Ms. Immonen started her career in the UN in 1991 and has been serving in the Lao PDR since 2014.

Mr. Nicola Pontara

World Bank’s Mr. Nicola Pontara is Country Manager for Lao PDR. He joined the World Bank in 2000, and has been based in Lao PDR since July of this year. Mr. Pontara holds a PhD in Economics from the University of London (SOAS).Mr Leo Faber

Mr. Leo Faber is the first resident Ambassador of the European Union to the Lao PDR and has been serving since 2016. Mr. Faber holds a Master’s degrees in Sinology, Classical and Modern Chinese Philology, and European History.


Counting the Costs: Disaster Needs in Laos Accumulate as Gov, UN, EU, WB Calculate Impacts

Child flood victims

The tragic loss of life and heavy impacts on livelihoods amid disaster triggered by pounding rains and rushing waters means there is no doubt 2018 has proved a challenging and heartbreaking one for too many people in Laos.

This rainy season has impacted on lives and livelihoods, and nowhere more than in Sanamxay district in Attapeu province, site of the impact of the water released by the collapse of Saddle Dam D at Xe Pian Xe Namnoy project still under construction.

An assessment of the total impact is being conducted as a concerted effort by the government, supported by the United Nations, the World Bank and the European Union – EU and is meant to provide in-depth insight on the damage the floods have caused, as well as to define what is needed to fully recover from such impacts.

The importance of accurately and timely measurement of impacts and recovery efforts saw the launch of the 2018 Post-Disaster Needs Assesment Monday attended by some 150 including government representatives led by the Minister of Labour and Social Welfare.

The effort will cover the entire country, and focus will be put on the most affected, Minister of Labour and Social Welfare and Chairman of the National Disaster Prevention and Control Committee (NDPCC), Dr Khampheng Saysompheng told the opening ceremony of the orientation on the Post Disaster Needs Assessment (PDNA).

Disasters reduce development gains & hamper economic growth, meaning that planning and building in resilience are essential in an era of climate change and to achieve Laos National Socio-Economic Development Plans and the United Nations’s Sustainable Development Goals (SDGs), the meeting heard.

A total of 2,409 villages with 113,507 families have been affected by disasters nationwide in 2018, the NDPCC reported.

Around 17,000 people are currently evacuated from their villages, and 500 kms of damaged roads are making access to these areas difficult.

Some 62 million dollars’ worth of crops and farmlands have been hit and more than 100,000 hectares of paddy fields have been damaged.

Authorities have arranged temporary accommodation for 3,616 families whose homes were damaged or destroyed.

As the figures suggest, accurately gauging the extent of the impact nationwide is an ongoing challenge.

As such, government officials met with counterparts of development partner bodies to hold a brainstorming session on ways to best assist flooding victims nationwide and estimate damages and losses caused by the slew of recent disasters across the country.

The objectives of the meeting were to assess costs and losses caused by the recent floods across the country, to identify recovery needs to develop a sustainable recovery strategy and to guide donors funding, aiming to build back better and safer and ensure a more successful, resilient and sustainable recovery.

Dr Khampheng called on the participants to share lessons learned from other natural disasters for the successful implementation of relief and rehabilitation measures.

UN Resident Coordinator and UNDP resident representative, Ms Kaarina Immonen said while the Asia–Pacific region experienced rapid economic growth, disaster risk is outpacing resilience.

For Laos, the emphasis on strengthening disaster risk management is particularly important as this will build resilience to future extreme weather events, Ms Immonen said.

Route 13 to be Improved and Maintained with World Bank Support

World Bank Route 13 Road Upgrade

More than 500,000 people living adjacent to sections of National Road 13 will benefit from the improvements planned in the National Road 13 Improvement and Maintenance Project.

The agreement for the project was signed today by the Vice Minister of Finance, Mme Thipphakone Chanthavongsa, and the World Bank Country Manager Nicola Pontara. The project will improve the condition, safety, and climate resilience of critical sections of National Road 13, Lao PDR’s most important corridor, which is integral to domestic and regional connectivity.

world bank route 13 road upgrade

Many parts of the road have not been rehabilitated since the main sections were completed in 1997 and now require major improvements to keep up with the growth in use. Some sections, especially those around the capital of Vientiane, are expected to reach maximum capacity in the next five years as traffic rapidly increases.

National Road 13 is vital to our economy, and its upgrade, rehabilitation and maintenance will broaden access to markets, jobs and public services, while also making travel safer. An improved National Road 13 brings Lao PDR closer to its goal of more inclusive growth,” said Dr. Bounchanh Sinthavong, Minister of Public Works and Transport of Lao PDR.

In addition to road expansion and improvement, the project will strengthen the road’s resilience to climate change and ensure it lasts longer. Road safety measures and improvedpedestrian facilities will make the road safer, particularly for women and children from local communities who use the road to walk to and from markets and schools. Measures to curtail the overloading of trucks will help increase the efficiency of funds allocated for road maintenance.

“National Road 13 is key to Lao PDR and its economy. Upgrading, rehabilitating and maintaining this corridor will make travel safer, quicker, and more reliable. This will encourage inclusive growth and a better business environment in the country,” said Nicola Pontara, World Bank Country Manager for Lao PDR.

The project will first focus on the high traffic corridor outside of Vientiane of Sikeut-Phonhong (km 12-70), which is currently the country’s busiest stretch of road, and also vulnerable to severe flooding. 

To be implemented from 2018 to 2023, the project will receive US$40 million in financing from the International Development Association (World Bank), and co-financing of US$40 million, US$38.5 million, and US$9.5 million from, respectively, the Asian Infrastructure Investment Bank, the Government of Lao PDR, and the Nordic Development Fund. The Ministry of Public Works and Transport will implement the project, using an Output and Performance-Based Road contract to support more efficient use of funds.

Laos Making Efforts to Improve Ease of Doing Business

ease of doing business in Laos

The government of Laos is making efforts to improve the ease of doing business in the country by streamlining the process for business registrations.

According to the World Bank Ease of Doing Business ranking system, Laos took 141st place in 2017, dropping steadily from 134th place in 2014, and 139th in 2016.

Comparatively, Thailand boasts a ranking of 26, while Vietnam ranks 68, and Cambodia at 135.  Myanmar ranked lower than Laos, at 171.

In order to improve the ease of doing business in Laos, Prime Minister Thongloun Sisoulith issued Executive Order no. 2 in February this year, ordering ministries and other bodies to improve procedures and remove obstacles causing difficulties to investors.

Now, authorities are required to issue enterprise registration certificates for new businesses within 10 working days after an application is submitted, according to Article 17 of the Amended Law on Enterprise.

Following the issuance of the certificate, the investor must then submit an investment or business operation application to the relevant sector of the government within 90 days.

These clearer and simpler steps should expedite the registration of a business for investors.

The government has also set up a central-level Investment Promotion and Management Committee, to help accelerate consideration and approval of investment applications.

Although the procedures have been simplified and ministries ordered to comply, some investors still complain that there are too many steps involved. Many have suggested that a “single window” unit to which all documents could be submitted would significantly improve the experience for business registration, rather than having investors submit applications to various ministries in relation to their field of investment.

Source: Vientiane Times