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Document o f The World Bank
FOR OFFICIAL USE ONLY
Report No. 39688-LA
INTERNATIONAL DEVELOPMENT ASSOCIATION
COUNTRY ASSISTANCE STRATEGY PROGRESS REPORT
FOR
THE LAO PEOPLE’S DEMOCRATIC REPUBLIC (LAO PDR)
FOR THE PERIOD FY 2005-201 1
May 4,2007
Southeast Asia Country Unit East Asia and Pacific Region
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without Wor ld Bank authorization.
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CURRENCY EQUIVALENTS (Exchange Rate Effective as o f M a y 4,2007)
Currency Unit Kip U S $ l .oo 9,616
FISCAL YEAR October 1 - September 30
WEIGHTS AND MEASURES Metric System
ABBREVIATIONS AND ACRONYMS
AAA Analytical and Advisory Activities ADB Asian Development Bank AFTA ASEAN Free Trade Area AH1 Avian and Human Influenza CAS Country Assistance Strategy CASPR CAS Progress Report CPI DTIS Diagnostic Trade Integration Study FIAS Foreign Investment Advisory Service FMCBC Financial Management Capacity Building Credit GAC Governance and Anti-Corruption GDP Gross Domestic Product GEF Global Environment Facility GMS Greater Mekong Sub-region ICA Investment Climate Assessment ICT Information and Communication Technology IDA International Development Association IDF Institutional Development Fund IF Integrated Framework IFC .International Finance Corporation IMF International Monetary Fund INT Department o f Institutional Integrity JPER Joint Portfolio Effectiveness Review LEnS Lao Environment and Social Project MDG Millennium Development Goal MDTF Multi Donor Trust Fund M&E Monitoring and Evaluation MIGA Multilateral Investment Guarantee Agency
Committee for Planning and Investment
MPDF Mekong Private Sector Development Facility NGPES National Growth and Poverty Eradication
Strategy NSEDP National Social and Economic Development
Plan NT2 Nam Theun 2 Hydroelectric Project ODA Official Development Assistance PACSA Public Administration & Civil Service
PBA Performance Based Allocation PDR People’s Democratic Republic PEIFR Public Expenditure Integrated Fiduciary
PER Public Expenditure Review PEMSP Public Expenditure Management
Strengthening Program PETS Public Expenditure Tracking Survey PFM Public Financial Management PFZF Poverty Reduction Fund PRSO Poverty Reduction Support Operation PSIA Poverty and Social Impact Analysis SIDA Swedish International Development Agency SOE State-Owned Enterprise SPG Strategic Plan on Governance SWAP Sector-Wide Approach UNDP United Nations Development Program WBI World Bank Institute WTO World Trade Organization
Authority
Review
World Bank
Vice President: James W. Adams Country Director: Ian C. Porter Country Manager: Patchamuthu Illangovan Task Team: Zafar Ahmed, Somneuk Davading, Loretta Dorman, Maria
Fernanda Miralles Gasparini, Shabih Al i Mohib, William Rex, Denis Robitaille, Jayasankar Shivakumar, Soudalath Silaphet, Ekaterina Vostroknutova
I.
11.
111.
IV.
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Table of Contents
INTRODUCTION AND CONTEXT ........................................................................................ 1
TAKING STOCK AT CAS MID-TERM ................................................................................. 2
STRENGTHENED AND EXTENDED CAS PROGRAM (2009-2011) ................................ 8
MANAGING R I S K S ................................................................................................................ 13
Text Table Table 1: Lao PDR: Summary o f Wor ld Bank Program
Attachments Attachment 1 : Lao PDR: CAS Results Matr ix and Progress Thus Far Attachment 2: Lao PDR: Updated and Streamlined CAS Results Matr ix for the Extended Period Attachment 3: Lao PDR: K e y Environmental Indicators Attachment 4: Lao PDR: Trust Fund Portfolio
Standard Annexes Annex A2: Annex B2: Annex B 3 :
Annex B4: Annex B5: Social Indicators Annex B6: K e y Economic Indicators Annex B7: K e y Exposure Indicators Annex B8: Operations Portfolio (IDA)
Lao PDR at a Glance Selected Indicators o f Bank Portfolio Performance and Management IDA Program Summary I F C and MIGA Program Summary o f Non-Lending Services
Statement o f IFC’s Portfolio
Map (IBRD 33431)
The Executive Directors discussed the Country Assistance Strategy for L a o PDR on March 31,2005.
This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.
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I. INTRODUCTION AND CONTEXT
1. The Executive Directors endorsed the current Country Assistance Strategy (CAS) for Lao PDR on March 31, 2005, at the same time they approved two flagship operations for Lao PDR: the first Poverty Reduction Support Operation (PRSO-1) and the Nam T h e m 2 Hydroelectric Project (NT2). This CAS Progress Report (CASPR) provides an update o n country developments and the f i rst two years (FY2005-2007) o f CAS implementation. I t then outlines a CAS program that i s strengthened and proposes extension o f the current CAS period by two years to end FY2011 to fully align and synchronize the Bank’s strategy with the country’s electoral cycle, the Government’s National Socio-Economic Development Plan (NSEDP 2006-2010), and the N a m Theun 2 Project construction.
2. Over the past two years, Lao PDR has maintained relatively stable macroeconomic conditions; its economic growth is robust and it is making progress on its MDGs and on reforms. Growth has increased f rom 6.4 percent in 2004 to 7 percent in 2005 and an estimated 7.5 percent in 2006. Macroeconomic conditions remain relatively stable, reflecting improved monetary and fiscal discipline, with inflation in single digits for the last several years, public expenditures under control and the fiscal situation steadily improving. The poverty headcount fe l l further f rom 33 percent in 2002/2003 to 31 percent in 2005/2006. The Government has accelerated reforms across several areas, including public financial management, trade and private sector development, governance and anti-corruption, and natural resources management. I t i s also noteworthy that the strong implementation performance o f N T 2 has helped raise the level o f partnership and trust between the Government and the international community.
3. The medium-term outlook for Lao PDR remains favorable, with real GDP growth projected to stay at 6-7percent and poverty to decline to 23 per cent by 2010, but there are significant challenges and risks. First, while foreign direct investment in the natural resource sector has accelerated as the investment environment has improved,’ the overall competitiveness o f the agriculture and manufacturing sectors i s relatively weak, hampering the capacity o f the economy to generate employment and ensure broad-based improvement in living standards. Second, whi le important reforms are underway, a number o f existing r i sks that could undermine the strong economic performance must be managed, especially o n the fiscal side (e.g., sustaining recent progress on revenue mobilization) and on external debt (e.g., continuing a prudent borrowing strategy that does not worsen already high debt indicators). Third, despite some progress, the banking system remains fragile and underdeveloped. Fourth, while improvement i s evident, governance systems remain relatively weak and perceptions o f corruption are increasing. In this respect, whi le the Investment Climate Assessment (ICA) did not find corruption a major impediment to doing business,2 the Transparency International and Worldwide Governance Indicators ratings are low, and this risk i s receiving increasing Government attention. Finally, while progress in developing capacity has been real, the pace o f reforms in public financial management (e.g., the new Budget Law), service delivery, and private sector development, among others, i s generating additional and more sophisticated capacity needs that must be met if Lao PDR i s to achieve sustained progress and realize i t s full potential.
4. The NSEDP aims to address these challenges and ensure that Lao PDR continues on a sustainable growth path. I t will be recalled that the Government’s National Growth and Poverty Eradication Strategy (NGPES) provided the basic framework for the Bank’s CAS objectives. The Government’s NSEDP for 2006-2010 i s a successor poverty reduction strategy to the NGPES, and builds
’ According to the World Bank’s Doing Business report, in 2006 Lao PDR was ranked 159 out o f 175 countries in terms o f ease o f doing business, up from 164 in 2005.
The I C A is based on data collected in 2005 and covered around 300 firms in the manufacturing and tourism sectors. The firms identified three key constraints to doing business and increasing productivity: infrastructure, regulations, and taxation. In the tourism sector, skills/education was ranked among the top three constraints by tourism f i rms, along with infrastructure and taxation. In both sectors, next in importance were macroeconomic uncertainty and access/cost o f financing. Governance issues, grouped together, came in second to-last place, just before “other factors:” only about 10 percent o f firms named at least one o f the governance-related issues as a major or severe constraint to their business.
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o n i t s participatory approach, poverty focus, and to some extent, i t s results orientation. A new National Assembly was elected in April 2006 and, in July o f the same year, a new Government took office. The newly-elected polit ical leadership, National Assembly and Government endorsed the NSEDP in the f i rst h a l f o f 2006 and continue to demonstrate strong commitment towards i t s implementation and achievement o f results. The NSEDP i s complemented by the Government’s Strategic Plan o n Governance (SPG).
0 , The NSEDP addresses key actions to be taken and challenges to be met for Lao P D R to realize i t s economic and social development potential. The plan-prepared through a participatory process that contributed to broad ownersh ipse ts ambitious targets and builds on recent reform achievements while identifying critical interventions in the areas o f macroeconomic management, structural and fiscal reforms, capacity and human resource development, and expansion of infrastructure. Significantly, i t recognizes that the private sector i s an important driving force for accelerating growth and reducing poverty, and articulates sound policies to provide a more supportive investment climate. These policies are complemented by strategies for infrastructure, rural and social development, and environmental protection for sustainable, export-driven growth. K e y challenges to focus on during implementation include a viable medium-term financing framework, a strong monitoring and evaluation system to guide progress, and a systematic approach to developing capacity over time.
0 T o overcome governance and corruption challenges that may arise during NSEDP implementation, the Government has been working on i t s Strategic Plan on Governance as well as a national anti-corruption strategy. The SPG focuses on improving public services, enhancing transparency and public participation in policy-making processes, strengthening the rule o f law, and improving public financial management. I t represents an important step forward for Lao PDR, describing the basis for a people-centered administration that i s needed to underpin NSEDP implementation and improve governance more broadly. Recognizing the ill-effects o f corruption, the Government i s putting in place policy, institutional and legal measures to combat this problem. In addition to a new anti-corruption l a w and signing the UN Convention Against
’ Corruption, the new Government has upgraded the role and status o f the State Inspection Agency (the key domestic institution for fighting corruption), has appointed one o f the Deputy Prime Ministers to oversee this agency and lead the fight against corruption more broadly, and i s taking steps to increase public awareness about the dangers o f corruption through meetings and the local media. Three o f the four elements o f the SPG are part o f the Bank’s priorities, whi le the lead o n rule o f l aw i s being taken by other development partners.
11. TAKING STOCK AT CAS MID-TERM
5 . Two years into implementation, the Bank’s CAS for Lao PDR is largely on track. The country has made important progress during the f i rst two years o f CAS implementation and 82 percent o f the intermediate outcome indicators for the C A S have either been completed or are on track (see Attachment 1). The Wor ld Bank Group has made significant contributions to this satisfactory performance, including work undertaken through a series o f Poverty Reduction Support Operations (PRSOs); the N T 2 Project; the Poverty Reduction Fund (PRF); work in capacity development and public financial management; and a range o f other analytical and advisory services and investment operations.
6. The four pillars of the existing CAS have provided a solid framework for Bank assistance. The C A S has two main and two supporting objectives aligned with the country’s poverty reduction and development framework embodied in the NSEDP. These four objectives support selected NSEDP priorities reflecting consultations with the Government and other stakeholders, and taking into consideration the activities o f other donors and partners, as wel l as the lessons drawn f rom implementing the Bank’s previous CASs.
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7. areas:
The CAS now underway supports the implementation of the NSEDP in two substantive priority
CAS Pillar 1. Sustain growth through improved management o f key drivers - regional integration and private sector development, rural development, and natural resource management.
Expected Outcomes. Strengthened regional integration and private sector development; strengthened institutional capacity to support rural development and agricultural productivity; and improved policies and institutional capacities to support more sustainable and participatory management and conservation o f natural resources.
Country Progress. Overall, progress i s continuing in a l l these areas with very few delays. As shown in the Results Matr ix (Attachment l), thus far 26 percent o f the outcome indicators that note progress under this pil lar have been completed and another 71 percent are on track, and 3 percent are delayed. AFTA commitments are on track and there i s progress towards Wor ld Trade Organization (WTO) accession. Private sector development has seen advancements, with an improved investment climate; implementation o f the Enterprise Law, which will significantly reduce the time required to startup a new business; a new L a w o n Commercial Banks, which provides a level playing field for domestic and foreign banks; establishment o f the Lao Business Forum, which aims to improve the business environment by facilitating public-private dialogue on issues facing the private sector; and improvements in reforms such as the “one-stop shop’’ for
’ investors, cancellation o f licensing fees, and a “one-stop inspection” pi lot at the border. Infrastructure for doing business has improved, as has the national and provincial capacity to develop and implement strategies to increase rural economic growth. The national road system i s expanding and more funds are directed towards road maintenance. The Government has further clarified institutional arrangements with the establishment o f the National Land Management Authority, which provides much needed coherence to the land agenda. The issuance o f land t i t les i s ahead o f target in urban areas, and the Government i s n o w setting in place the policy frameworks to expand this into rural areas. The Prime Minister’s Decree No. 3 1 in 2006 on forest management, conservation and wood processing, further strengthens forest management practices in production forests and protected areas. The Government has also established the Environment Protection Fund and further refined third-party monitoring arrangements to improve environmental quality in the country.
Role of World Bank Group. The Bank, working with development partners, has contributed to progress made in this area, in particular with success o f the f i rst cycle o f annual, single-tranche PRSOs (PRSO 1 to PRSO 3). The International Finance Corporation’s Mekong Private Sector Development Facil ity (IFC-MPDF) also supports improvements to the investment climate. Bank- financed projects in provincial and rural infrastructure (Road Maintenance and Rural Electrification programs) are improving access to roads, water and sanitation, supporting rural electrification and preserving road networks. The Bank i s supporting the Government to better manage i t s natural resources and the environment (Sustainable Forestry for Rural Development Project), and in issuance o f land titles (Land Titling Project) and targeted village level support to poor farmers (Agricultural Development Project). A range o f analytic work i s supporting this pillar, including the Investment Climate Assessment, Diagnostic Trade Integration Study (DTIS), Economic Monitors, Public Expenditure and Integrated Fiduciary Review (PEIFR) and, to some extent, the Poverty Assessment and Poverty and Social Impact Assessment.
CAS Pillar 2. Improve social outcomes and reduce vulnerability through strengthened public financial management and service delivery capacities and targeted poverty reduction programs.
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Expected Outcomes. Strengthened public financial management capacities; improved access to and quality o f basic health and education services, with an emphasis on vulnerable groups; and improved approaches to reducing poverty o f the most vulnerable.
Country Progress. Overall, progress i s being made under this objective, albeit with delays in achieving some milestones. As noted in Attachment 1, 58 percent o f indicators are on track and 14 percent have been completed, while 38 percent are delayed. After a slow start, measures aimed at improving fiscal management have been largely positive, leading the Government to achieve i t s revenue target in FY2005/2006 and overcoming shortfalls in revenue collection that were highlighted as a critical weakness by the jo in t Public Expenditure Review (PER). Management, allocation and monitoring o f social sector expenditures have also improved as has budget execution. Most notable in this area i s the promulgation o f the new Budget L a w which mandates centralization o f the Treasury, Customs Department and Tax Department, as wel l as development o f a comprehensive inter-governmental fiscal transfer system. These reforms wil l enable more effective management o f revenue and more consistent allocations to basic service delivery expenditures across the country. The Government continues to focus on improving service delivery, targeting the 47 poorest districts. More participatory methods o f bottom-up planning are s t i l l evolving. Although there i s increased access for the poor and vulnerable groups to basic health and education services, leve ls remain among the lowest in the region, and progress in reaching ethnic groups - particularly girls and women - has been especially slow. Moreover, recurrent government expenditure i s clearly too low. The Government i s reviewing i t s approach to village consolidation and the Bank-led Poverty and Social Impact Analysis (PSIA) i s analyzing i t s impact. A national resettlement decree has been issued; i t compares wel l internationally and defines entitlement policies for affected people, particularly in large infrastructure projects. As the threat o f Avian Influenza emerged in the region, the Government moved quickly to prepare a national p lan that i s being supported by several donors, including the Bank; recent outbreaks were contained, and preventive measures put in place.
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Role of World Bank Group. The Bank i s contributing significantly to this agenda through several instruments, in partnership with other donors. Important progress has been made o n public financial management, through the Financial Management Capacity Building Credit (FMCBC), PRSO programs and analytic work (PEFR, ICA, PETS). The Bank i s supporting the Government in the formulation and implementation o f the Public Expenditure Management Strengthening Program (PEMSP). The Bank-supported Health Services Improvement and Second Education Development Projects will help to improve social outcomes and reduce vulnerabilities. The Poverty Reduction Fund (PRF) and Sustainable Forestry for Rural Development Projects support
' government efforts to deliver development resources at the village level in the poorest districts and the Avian and Human Influenza Project i s helping the Government address this very serious health issue. The Poverty Assessment, Education and Health Sector Studies, and the forthcoming PETS and PSIA are key analytic contributions to deepening country-wide understanding o f poverty patterns and poverty reduction approaches.
8. the approacli that the Bank is using to support the first two substantive priorities:
These goals are complemented by two additional CAS objectives that capture key elements of
CAS Pillar 3. Adopt a strategic approach to capacity development and partnerships in support o f better NSEDP results.
Expected Outcomes. Strengthened capacities o f the Committee for Planning and Investment (CPI), the Ministry o f Finance, and line ministries to plan, coordinate, and monitor NSEDP implementation; strengthened key sectoral and provincial capacities in support o f CAS
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objectives; strengthened capacities o f local partner institutions to support capacity development activities; and strengthened donor partnerships for better results.
Country Progress. While progress i s clear across most o f these areas, capacity development needs continue to evolve. The CAS emphasized that developing capacity was di f f icul t and that progress required a medium-term outlook. Progress on this pil lar has been slower than the others: as shown in Attachment 1, so far 65 percent o f indicators are either o n track or have been completed, while
’ 21 percent are delayed, and 14 percent either dropped or revised. Capacity remains a major bottleneck to achieving NSEDP and CAS objectives, particularly as the pace o f reform has accelerated. There i s growing pol icy capacity in the central government, such as the Prime Minister’s Office, CPI, and the Ministry o f Finance, that i s reflected in the successful completion o f the NSEDP; improved alignment o f expenditure allocations with NSEDP priorities; and progress made o n the investment climate, public financial management, anti-corruption l aw and institutions, and the SPG. However, as new reforms are introduced, new capacity gaps emerge, such as additional capabilities required by the Ministry o f Finance to fully implement the new budget l aw and the SPG. Capacity to effectively monitor and evaluate NSEDP progress requires attention, as does strengthening the State Inspection Agency to better lead the government’s campaign against corruption. Progress in capacity development across the sectoral ministries i s highly variable, with the Roads Department showing the greatest progress over the CAS period. The Min is t r ies o f Education, Health and Agriculture and Forestry have identified the need to accelerate their capacity development activities, while the newly formed Ministry o f Energy and Mines faces considerable challenges in acquiring high level capacity in this rapidly growing area o f the economy. At the provincial level, Khammouane has piloted preparation o f a strategic development plan to build local consensus around the implementation o f national policies and to better manage current and future investments. The framework for increased aid effectiveness and stronger partnerships has improved significantly over the CAS period, with clearer government leadership, donor alignment, and harmonization being guided by the Vientiane Declaration, signed by the Government and 22 donor representatives - including regional donors - late in
. 2006. T h e Government has already taken a number o f steps towards improved a id effectiveness, such as integrating project implementation arrangements in the transport sector, as wel l as for Public Financial Management (PFM) programs as reflected by the reforms in this area supported by the PRSO-3. As a forerunner to the Vientiane Declaration, in November 2005 the Government, Wor ld Bank, Asian Development Bank (ADB) and the Swedish International Development Agency (SIDA) undertook a Joint Portfolio Effectiveness Review (JPER) to identify common constraints to their portfolios and agree on a set o f remedial actions to redress them. A second PER took place in April 2007. At the program level, the Avian and Human Influenza Project stands out for effective donor harmonization and alignment with government leadership.
Role of World Bank Group. The C A S identified multiple entry points for capacity development and partnership building. Whi le a l l Bank projects include capacity development components, the Bank i s also working more on comprehensive approaches. Through Analytical and Advisory Activities (AAA), NT2, the PRSO series, sector operations and a strengthened country office, the Bank i s furthering pol icy development, strengthening national, sectoral and training institutions, supporting private sector and c i v i l society, and improving donor harmonization and alignment. In the national and sectoral institutions, the Bank i s helping the Government to tackle capacity constraints at the individual, organizational and institutional levels. The Bank i s also providing support to the mass organizations (particularly the Lao Women’s Un ion and the Lao Front for National Construction), and has supported several youth and environmental organizations through the Small Grants Program. As to partnerships, the Bank provides a number o f practical
‘ approaches to deepening donor partnerships, including jo in t analytic work (Joint Portfolio Effectiveness Review, Poverty Assessment, ICA, DTIS); enabling shared budget support through
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the PRSO series; mobil izing multi-donor trust funds in support o f coordinated programs in PFM and trade; and working closely with the Government and partners to deliver on the Vientiane Declaration on Aid Effectiveness.
0 CAS Pillar 4. Support implementation o f NT2 as an example o f an area-based, sustainable natural resource development program that contributes to growth, improved social outcomes, capacity development, and stronger partnerships.
Expected Outcomes. Sustained economic growth, including greater regional integration and more sustainable natural resource management; N T 2 mechanisms are put in place to ensure that expected revenues contribute to increases in spending o n pr ior i ty poverty reduction and environmental protection programs, and ultimately to strengthened service delivery and improved social outcomes; N T 2 contributes to improved management capacity, coordination and participation, and monitoring; and N T 2 involves continued and regular consultation with local communities as wel l as effective partnerships among a l l concerned stakeholders.
County Progress. Good progress has been made and the project will continue to be closely monitored to ensure that social and environmental standards are met. Thus far, 18 percent o f the indicators highlighted in the CAS Results Matr ix (Attachment 1) have been completed and the remaining 82 percent are on track. Resettlement sites are being developed with the required infrastnkture and social services; project affected persons are being compensated for lost assets and new livelihood activities are being developed to ensure sustainability o f living standards; the Watershed Management and Protection Authority i s helping protect key wi ld l i fe species and the biodiversity conservation area, as wel l as improve the sustainability o f livelihoods in this area; there i s close supervision o f construction activities and environmental/social programs; external experts such as the Social and Environmental Panel o f Experts (POE), International Advisory Group (IAG), Lender's Technical Advisor, the international financial institutions and independent monitors are fo l lowing the project closely; consultations with villagers and a participatory process are s t i l l in place; in i t ia l steps have been taken towards the implementation o f the National Policy on Environmental and Social Sustainability o f the Hydropower Sector; and there has been progress, albeit slow, o n the Lao Environment and Social (LEnS) Project implementation, which will support the hydro pol icy and other government initiatives complementary to NT2. As stated earlier, the progress o n PFM and N T 2 revenue management arrangements remains laudable.
Role of World Bank Group. Both the International Development Association (IDA) and the Multi lateral Investment Guarantee Agency (MIGA) as wel l as other development partners have maintained close supervision o f the project and strong working relations with other financing institutions, the project developer and the Government. Monitor ing and evaluations arrangements for the project are extensive. Lessons learned f rom N T 2 practices are beginning to be reviewed to determine how they can be efficiently applied to other natural resource management projects in the country. Also being discussed i s how to more effectively implement and monitor the national hydro pol icy noted above.
9. I n aggregate, progress is both impressive and varied across the four pillars. Through Pillar I important reform initiatives have emerged that should improve the investment climate for private sector development and trade. After a slow start, impressive progress i s being made to strengthen the public financial management system through Pillar 2, which should, over a period o f time, improve service delivery. As anticipated, progress on capacity development remains varied, but some important steps have been taken under Pillar 3 to build a comprehensive approach. Under Pillar 4, N T 2 remains a country flagship, and the project continues to' make good progress but r isks will remain until completion. This progress provides the foundation for the country to continue to move forward and work to realize i t s development potential.
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10. The impressive progress on CAS implementation reflects the effective use of a broad range of instruments including a mix of programmatic, sector investment and trust funded operations and a satisfactory program of AAA. At the time o f CAS consideration by the Board, the Bank committed to delivering six IDA operations and one MIGNIDA partial risk guarantee by the beginning o f FY07, a l l of which were approved, and to which the Avian and Human Influenza operation was added. A total of 26 AAA tasks were identified in the CAS o f which nine have been completed, 12 are ongoing and five have experienced delays. The PRSO-3 and Regional Greater Mekong Subregion (GMS) Power Trade Project wil l also be considered along with this Progress Report. Thus, at mid-term, a total o f ten IDA operations wil l have been approved. As o f April 25, 2007, the portfolio comprises 14 IDA credits and grants totaling U S 1 8 9 mill ion, one guarantee, as well as 16 client-executed Trust Funds totaling about U S 1 8 mi l l ion (see Table 1, Annex B2, Annex B8, and Attachment 4). The disbursement rate for FY05 and FY06 was 23 and 25 percent, respectively, and i s projected to reach 27 percent for FY07, considerably above the regional average. At any given time during the CAS implementation period, the portfolio has never included more than one project with unsatisfactory rating for implementation progress or development outcome. Particularly impressive has been the effective and timely implementation o f the f i rst three PRSOs.
11. The CAS Results Matrix (Attachment 1) is reviewed at frequent intervals to monitor and evaluate CAS implementation. Indicative priority milestones have been set to track progress, and “champions” for each pil lar have been chosen to improve information flows and accountability. At the time o f CAS approval the Bank committed to 117 outcome indicators, 82 percent o f which have been completed or are on track. The results f rom this monitoring and evaluation system have been used in the assessments included in this CASPR and will undergo further refinements based on ongoing guidance f rom various stakeholders. The progress on implementing the CAS wil l continue to be monitored closely, and in the event there are major deviations, the Bank’s Board o f Directors will be updated through another C A S Progress Report prior to CAS completion. The Bank continues to update the Executive Directors on N T 2 implementation through bi-annual reports. The last report was presented to the Board in M a y 2007.
12. Stakeholder relations, communications and outreach have significantly improved. Strengthening the country office has been a boon to relationship-intensive efforts, in particular constructive working relationships and open dialogue with all leve ls o f government, more active participation in Sector Working Groups as wel l as in other informal donor coordination meetings, and a deepened pol icy dialogue and jo in t activities with both the Government and development partners. These stronger relations have in turn led to more participatory and fruitful consultations with the Government and stakeholders on the Bank’s program, including the recent Governance and Anti-Corruption (GAC) and G M S consultations. Building on N T 2 experience, the Bank has significantly increased i t s outreach and information sharing efforts. I t regularly interacts with a variety o f stakeholders (government, donors, youth groups, international nongovernmental organizations, mass organizations, media and, increasingly, non-professional associations), through i ts presentations, revamped website, monthly newsletter and, in the coming year, a multi-donor Public Information Center. The Bank continues to be proactive o n N T 2 communications, with regular progress reports, media releases, slideshows and project stories, and supporting the outreach efforts o f the Government and project developer.
13. The Bank has learned several key lessons during the implementation of the CAS to date. First, that while the pace i s at times slow, reforms are moving in the right direction and the Government remains committed: the r isks inherent in the CAS have so far proved worth taking. Second, the approval o f the N T 2 project has enhanced the Bank’s role as a reliable development partner, with leverage maintained. Third, the strengthened country office has deepened day-to-day engagement with the Government, increasing client responsiveness, and improving continuity in the Bank’s program. Fourth, sustainable capacity development requires that project level activities be complemented by more comprehensive approaches at the sector and country levels. Fifth, having demonstrated an effective
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approach to a major investment in the natural resource sector, the Bank will need to help the Government improve i t s practices across the sector more broadly. Lastly, as the Government’s reform program advances, there are increasing opportunities to deepen the Bank’s impact.
111. STRENGTHENED AND EXTENDED CAS PROGRAM (2009-201 1)
14. . The fourpillars of the current CAS remain a sound strategy for the duration (through 2011). There i s very close alignment between the NSEDP strategic directions and the CAS pillars, and outcomes to date are highly relevant to the Government’s reform agenda. Progress to date, the greater dynamism o n the country’s reform agenda and the ongoing commitment for further reform provide more opportunity for the Bank to scale up i t s support, in particular, to: (a) build on the array o f reform initiatives in the areas o f public financial management, private sector development and trade, natural resource management, and service delivery; and (b) work within the four CAS pillars to strengthen governance and social inclusion outcomes. I t i s also proposed that the CAS be extended to June 2011, so that i t i s fully aligned and synchronized with the electoral cycle, the NSEDP (2006-20 lo), and NT2 Project construction (2005- 2010).
15. The expanded focus on governance and social inclusion takes into account changing country circumstances and evolving Bank strategy. These issues require an integrated approach across multiple entry points and are better addressed under the current four pillars o f the CAS rather than as additional components.
The expanded focus o n governance, including anti-corruption, takes advantage o f significant government progress in these areas since the CAS was developed (see paragraph 4). Of particular importance i s the Government’s SPG, a new Anti-Corruption L a w and a strengthened State Inspection Authority-all indicators o f the seriousness the Government i s attaching to these issues. The Bank has also recently adopted a new GAC Strategy that i s identifying a variety o f relevant entry points, building o n those described in Section 11. Over the extended CAS period, the Bank will expand i t s interventions under a l l four CAS pillars through appropriate technical and financial assistance, including in the areas o f public financial management, private sector development, natural resource management, c i v i l service reform, social accountability and the Bank’s own portfolio.
The need to ensure a sharp focus o n social inclusion stems f rom inequities associated with increasing levels o f growth and investment; issues related to management o f internal migration and displacement; and the challenges o f providing more opportunities for a growing generation o f youth (approximately 60 percent o f the population i s under the age o f 24). Over the extended CAS period, the Bank will re ly on a range o f instruments under the four pillars to scale up i t s intervention in the areas o f health, education, gender, youth, ethnic groups and rural and upland development.
CAS Pillar 1: Sustaining Growth
16. Accelerating improvements in private sector development, trade, and management of land and natural resources. Country progress i s increasing opportunities for coordinated Bank Group engagement to support private sector development (ICA findings), improve access to finance (financial sector review findings), and widen trade opportunities (DTIS/IF findings). In the FY2008-2011 period, operations that support these objectives include: the Trade Facilitation project (complemented by a multi-donor t rust fund); support to the financial sector, including an IFC stake in the f i rst investment by a leading international bank in the domestic banking sector, and support to the Bank o f Lao P D R on implementation o f the newly promulgated L a w o n Commercial Banks; a continued, sharply-focused
- 9 -
PRSO’ series; and facilitation o f regional integration through G M S Power, Water and Trade Projects. Improved infrastructure wil l be supported through a Transport Sector Wide Approach (SWAP) and power development program. Measures to ensure sustainable management o f the land, water and forest resourced base will build on ongoing successful efforts and will expand into the poorer, upland regions. The Bank Group will provide technical assistance to support implementation o f the Enterprise Law; this i s expected to remove significant governance-related bottlenecks to investment. Through the Lao Business Forum, assistance will be provided to trade associations and business groups to develop advocacy sk i l l s and facilitate dialogue on legal, regulatory and governance issues with the Government.
CAS Pillar 2: Improving Social Outcomes
17. Improving the publicfinancial management system and service delivery. T h e Bank’s continuing work in PFM, which has strong governance elements, wil l focus on: (a) supporting the Government in establishing a more transparent and equitable inter-governmental fiscal transfer system; (b) assisting in the centralization o f the national treasury to improve execution, disclosure, monitoring and management o f the budget - also critical to N T 2 revenue management arrangements; and (c) determining priority programs for poverty reduction in the health and education sectors, rural roads, and environmental conservation. Additional financing wil l be provided for the F M C B C complemented by a Multi-Donor Trust Fund (MDTF), another IDA-funded project, and the PRSOs. T w o more PEIFRs and PETS wil l be undertaken over the extended period. Working with the central government to build capacity for accountability and transparency in the use o f public resources, the Bank wil l support service delivery at the community level. I t will replicate the good practices emerging f rom the Poverty Reduction Fund Project, NT2, Sustainable Forestry and Rural Development Project, the Education Project, and target interventions in new operations to reduce vulnerabilities and better address needs, especially in disadvantaged groups. These include the Avian and Human Influenza operation (on-going); a second phase o f the Poverty Reduction Fund; the Khammouane Rural Livelihoods Project; the Provincial Development Project; and the Second Sustainable Forestry and Rural Development Project (all planned). The Bank, along with other development partners, wil l also continue to strengthen i t s analytic base through the PSIA, PETS, PER and Uplands Study to further understanding o f effective poverty reduction approaches in the country, and will undertake new analytic and outreach work on youth opportunities. In addition, the Bank wil l broaden i t s efforts under this pil lar to include work to strengthen external auditing (with the State Audit Organization), the public procurement system (with the National Procurement Monitoring Office), and the Bank’s own portfolio.
CAS Pillar 3: Strategic Approach to Capacity Development and Partnerships
18. Refining the approach to capacity development. The Bank will continue to use multiple entry points to develop country capacity, and i s evolving a framework to better coordinate and leverage i t s approach - especially at the sector and country levels. There i s some bilateral interest in contributing to this emerging approach. T h e Bank i s promoting more systematic capacity development at the cross- sectoral (NSEDP monitoring and evaluation), sectoral (health, education, transport), sub-sectoral (PFM, maternal and chi ld heath, forestry) and provincial (Khammouane) and c i v i l society levels. Cross-cutting themes include new interventions to support the Public Administration and Civil Service Authority (PACSA) in c i v i l service reforms and support to the State Inspection Authority to combat corruption. In this regard, the Bank wil l provide a combination o f AAA and technical assistance to support the Government’s plans across the key entry points described in the Bank’s new G A C strategy. Analytic work wi l l include an approach paper on c iv i l service reform and an assessment o f the Government’s SPG to identify gaps and opportunities for engagement. Increased support in these areas will be provided in partnership with other donors, particularly with the UNDP, which leads donor support across the governance and anti-corruption agendas. The Bank wil l also continue work o n areas already described in public financial management with MDTF support; trade facilitation also with MDTF support; natural resource management under the LEnS project; the proposed Hydro and Mining Sector Technical
- 1 0 -
Assistance Project; a Country Economic Memorandum focusing o n natural resources use; and strengthened service delivery in key ministries such as Education and Health. Finally, the Bank will continue to expand ways to work with emerging c iv i l society and mass organizations.
19. Improving the effectiveness of aid. While the recent signing o f the Vientiane Declaration on Aid Effectiveness provides a framework for moving forward, both the Government and donors will need to make considerable efforts to create an environment in which i t i s possible to move more systematically towards programmatic and sector-wide approaches. Necessary next steps wil l be to align donor aid with the Government’s priorities, harmonize a variety o f donor practices, and establish a sound monitoring and evaluation framework to measure progress. IDA plays a significant role in providing practical and operational approaches to increase aid effectiveness, and the Bank will continue to use the PRSO, the MDTF, the Transport SWAP, and the AAA portfolio to provide partners with concrete tools for harmonization. Enhancing government capacity to manage donor partnerships i s also a high priority. A related emerging challenge i s how to maximize the benefits f rom the growing assistance provided by new Asian’ donors, particularly Lao PDR’s immediate neighbors. The Bank wil l take advantage o f the strengthened partner relations to engage more systematically with a broad range o f stakeholders and support community participation and more effective disclosure o f information (particularly through a planned multi-donor Public Information Center) in order to deepen accountability mechanisms and thereby contribute to the governance agenda.
CAS Pillar 4: Supporting Nam T h e m 2 Implementation
20. The approval of the NT2program has been followed by a rapid increase in the number of proposals for investments in the hydro and mining sectors. The development o f a few large mines by international investors, along with high global prices for minerals, has resulted in a particularly rapid rise in investment and government revenues f rom this source. These investments and revenues are highlighting growing opportunities and risks for the Government in the broader area o f natural resource management. The Government will need to focus on the quality o f investments, the macroeconomic and governance related implications o f rapidly growing natural resource rents, as wel l as the sustainability o f natural resource exploitation if it i s to maximize the potential benefits and minimize the potential r isks in this area. The Bank already does considerable work across these areas, but will draw together and deepen this work during FY08 with a proposed Country Economic Memorandum on this topic aimed at helping the Government and development partners to strengthen their approach to these issues. Fol low up o n capacity building through technical assistance may also be undertaken. Since several new hydro projects are at an advanced stage o f planning, the Bank may be approached for partial-risk guarantee f rom a private sector consortium. T h i s would create an opportunity to extend the adoption o f governance practices initiated under NT2, such as: (a) a stronger voice and role for communities in natural resources management and livelihoods development; (b) better sharing o f r isks and rewards in a pubic-private partnership; (c) independent oversight and monitoring arrangements that improve transparency and accountability; and (d) strengthening country systems for public financial management (PFM) to ensure resource rents are used for poverty reduction. The Bank, in partnership with IFC, will continue to work in each o f these areas so that N T 2 practices can be applied to other natural resource management projects.
Bank Instruments
21. The Bank will continue to use a broad range of instruments to facilitate effective CAS implementation (see proposed program in Table 1 and Annex B3). Building o n the successful implementation o f the f i r s t series o f PRSOs, a second series o f PRSOs i s being developed. There wil l be increasing co-financing o f investment operations with other donors and a move towards sector-wide approaches, beginning with the transport sector in FY09 and the power sector in FYlO with appropriate AAA underpinning. Budget support and investment operations will also be complemented by co-financed
- 11 -
technical support operations. The proposed AAA program will be carried out jo in t ly with concerned government agencies and increasingly with other donors.
22. Increased attention has been given to enhancing the integrity of Bank-funded operations. A fiduciary review o f selected operations has been initiated in FY07 to assess to what extend fraud and corruption may affect the portfolio and to design measures to address any weaknesses uncovered. The review i s expected to be completed in F Y 0 8 in collaboration with the Department o f Institutional Integrity (INT), and will provide lessons on identifying r i sky projects as well as h o w to integrate good governance and ant i -compt ion measures into the Bank’s program. Under the recent JPER with SIDA, ADB and the Government, there was broad agreement on integrity measures to reduce opportunities for corruption under the respective operations through tighter rules and controls, broader competition and participation, and enhanced transparency and disclosure. Such measures will a im at strengthening country governance systems as the long-term solution to improving the development impact o f a l l public funds while also protecting Off ic ia l Development Assistance (0DA)-financed projects. T o support this extensive fiduciary program, the Bank has considerably strengthened i ts field-based portfolio and fiduciary teams. Adequate attention will also be given to strengthen the client’s capacity to improve procurement and financial management practices.
23. The amount of I D A resources for Lao PDR for the remainingperiod of the extended CAS will be determined using the Performance Based Allocation (PBA) system. The IDA program in the current CAS under IDA-14 i s deliberately front-loaded, mostly to accommodate the N T 2 project and related investments. W h i l e remaining IDA funds for the current and next fiscal years are somewhat constricted, if the pace o f reforms and implementation accelerates and additional key pol icy changes are undertaken- for instance based on new governance or anti-corruption initiatives-the PBA exercise could generate higher IDA allocations in the coming years, dependent, o f course, o n the outcome o f the IDA-15 negotiations and overall donor pledges. B o t h the Country Policy and Institutional Assessment index and Portfolio Performance Ratings-two key elements in the P B A exercise-for Lao PDR have been improving in recent years and bode wel l for possible higher IDA resources. If available, these additional resources would be provided mainly through higher PRSO amounts in support o f pol icy and institutional reforms, or through raising allocations for already planned investment operations. Given Lao PDR’s high debt burden, i t i s expected that the majority o f IDA resources would be available as grants, subject to the outcome o f the debt sustainability analysis. However, in a scenario characterized by a weak macroeconomic stance, slow pace or serious backtracking on the reform agenda or in implementation o f the poverty reduction strategy, or a poor ly performing portfolio, the Bank may decide to not provide any additional IDA resources beyond the commitment levels already approved. In the unlikely event o f substantive non-compliance with respect to the N T 2 project, including non-compliance with safeguard and/or revenue management undertakings, the Bank would, apart f rom curtailing lending levels, also consider the option o f not engaging in future financing and/or suspension o f the entire portfolio, until i t i s satisfied that agreements are being met and there i s adherence to commitments.
24. This strengthened CAS program will take full advantage of the progress achieved to date and will deepen its engagement in the areas outlined throughout the extended period. The proposed Bank program i s set out in Table 1 above. The Results Matr ix has been updated and streamlined (Attachment 2). Based o n the implementation experience thus far, this Results Matr ix streamlines the original 117 indicators and adds new ones to capture the extended and expanded program. In order to keep the number o f indicators within manageable limits over the extended period, the a im has been to consolidate the information to make it less cumbersome, enable regular updating and al low i t to become a more effective tool to measure results. The updated and streamlined matrix consists o f 13 key C A S outcome areas and 49 specific milestones with associated baselines and targets for the four CAS pillars over the extended period.
- xz -
tpi i i i i i t l'r
! t
i
I
- 13 -
IV. MANAGING R I S K S
25. The CAS identified four areas of risk that could threaten achievement of its ambitious objectives. These were: (i) risks caused by fluctuating pol i t ical commitment and weak implementation capacity o f the Government o n the NGPES, which was the framework around which the CAS was designed; (ii) risks arising f rom lack o f performance under the high visibility N T 2 project; (iii) risks relating to the effectiveness o f support extended to the country by i t s external development partners, including the Wor ld Bank; and (iv) r isks arising f rom external factors over which the Government had n o control. These risks, s t i l l val id going forward, have been effectively managed during the f i rst two years o f the CAS, resulting in impressive implementation progress, which needs to be maintained. Success in CAS implementation has in i t s turn generated additional risks. Issues relating to the four areas o f risk highlighted in the CAS are discussed below.
Government performance on the NGPES met CAS expectations, but with success emerges additional risks. The polit ical situation remains stable; the new Government that took office in July 2006 i s pushing through reforms with great vigor. I t i s deeply committed to implementing the NSEDP, which enjoys broad ownership both nationally and internationally. Going forward, NSEDP faces some implementation r isks that need to be managed adequately: (a) sources of growth - the current pace o f economic growth may prove unsustainable if agriculture and manufacturing sectors remain uncompetitive. The Bank, in partnership with others, will continue to support the Government to improve the investment climate and access to finance, further refine regulations, invest in sk i l ls development, expand extension services, and effectively regulate growing foreign investments in large-scale agnculture; (b) revenue management - NSEDP results are dependent on growing allocation o f both capital and recurrent expenditure, which in turn rely o n strong macroeconomic management, including continued improvements in debt sustainability; (c) natural resource rents - global experience suggests that rapid increases in government revenues from mining and hydropower could undermine both macroeconomic stability and governance. Strengthening public financial management i s key to risk mitigation, and i s underway. In addition, the Bank will prepare a Country Economic Memorandum on natural resource management during FY08; (d) governance and capacity - continued improvements to c i v i l service performance, particularly in service delivery, i s important for scaling-up results, as i s prevention o f corruption. The Bank will expand i t s support to the Government in this area, starting with analytic work in partnership with PACSA, assessment o f SGP and technical
’ assistance to State Inspection Agency; and (e) social inclusion - as in most countries, the risk that the benefits o f growth will not be spread sufficiently i s real. Taking a medium-term approach, the Bank will continue to support expanding services to those most vulnerable, equitable allocation o f public resources, and engaging youth, mass organizations and communities.
NT2 continues to make impressive progress, but r i s h wi l l remain until the project is completed. Progress o n implementation o f the high profi le N T 2 project has been commendable, not only regarding the physical construction but also in addressing the environmental and social impact^.^ After in i t ia l delays, the environmental and social program i s n o w better aligned with construction activities. This synchronization i s being closely monitored and managed through the comprehensive monitoring and disclosure mechanism in place. The country’s vast natural resources will continue to attract interest f rom investors, primarily f rom the private sector in neighboring countries. Several projects are at various stages o f planning. When taking advantage of these opportunities, the Government should ensure the “quality” o f such investments. The financing, contractual, environmental, social, and monitoring and oversight arrangements used for the NT2 project are precedent setting, and relevant practices should be replicated in other
See NT2 Update Report (May 2007) 3
- 14 -
projects. To realize this, the Government has put in place the National Policy on the Environmental and Social Sustainability o f the Hydropower Sector, and a similar pol icy i s being drafted for the mining sector. The Bank wil l support their implementation through technical assistance and two IDA operations (LEnS and proposed Hydro and Mining Sector technical assistance).
Donor coordination risks are being reduced by strengthening aid effectiveness through partnerships, but some risks remain. Clearer government leadership, donor alignment, and harmonization are evident compared to the beginning o f the C A S period, and should accelerate fo l lowing the signing o f the Vientiane Declaration in 2006. Lack o f delivery o n commitments under the Declaration i s a potential risk area, including l o w commitments f rom IDA, which
. would be a missed opportunity to increase the impact o f the Bank’s work. Capacity in the Bank’s f ie ld office has also been strengthened and the Bank has developed a number o f practical approaches to deepening donor partnerships, including jo in t analytic work, enabling shared budget support through the PRSO series, MDTFs in support o f coordinated programs in PFM and trade, and working closely with the Government and partners to deliver o n the Vientiane Declaration. The performance o f the nascent Sector Working Groups and the Round Table mechanism also provides grounds for comfort, but there i s room for significant improvement. The Wor ld Bank’s relatively l o w level o f IDA allocations calls for an approach that coordinates and thus leverages the Wor ld Bank’s AAA work and investment program through stronger partnerships with other donors. Risks in this context increase if sufficient progress i s not made in capacity development, as a larger gap would be created between country reforms and available human capacity.
Fortunately, Lao PDR has not been exposed to serious external risks during the current CAS period. The country i s positioning itself to combat these r isks in the future through forward movement o n the Integrated Trade Framework, analytical work on the ICA leading to pol icy changes, improved incentives and increased flexibil i ty in the private sector to respond to shocks, continued support to strengthen dialogue and partnership with neighboring countries to facilitate integration and diversification, support for the private sector through IFC and MPDF, and continued PRSO support for key pol icy changes.
26. I n conclusion, two years into implementation, the Bank’s CAS for Lao PDR is largely on track. The country has made further progress over these two years on growth and poverty reduction as wel l as o n pol icy and program implementation; and the NSEDP for 2006-10 and the Strategic Plan o n Governance build on these achievements and provide a comprehensive strategy for the future. Eighty-two percent o f the intermediate outcome indicators for the CAS have either been completed or are on track and the Wor ld Bank Group has made significant contributions to this satisfactory performance through the PRSOs and the N T 2 project as wel l as through other AAA activities and investment operations. Going forward, the four pillars o f the current C A S remain a sound strategy for continued Bank engagement and for an expanded focus o n issues o f governance and social inclusion. I t i s also proposed that the CAS be extended to June 201 1 so that i t i s fully aligned and synchronized with the electoral cycle, the NSEDP, and N T 2 Project construction. The Bank wil l continue to use a broad range o f instruments to facilitate effective CAS implementation and increased attention will be given to enhancing the integrity o f Bank- funded operations. The CAS i s ambitious and there are significant r isks that could affect the achievement o f i t s objectives. But these r isks have been effectively managed during the f i rst two years o f the CAS, resulting in impressive implementation progress, which needs to be maintained.
- 15 -
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Attachment 3: Lao PDR: Key Environmental Indicators
Environmental strategy/action plan prepared in 1995 GIOUD data East
Country Asia& Low d i ts Paclflc income
Population (millions) 5.8 1.870 2.343 Urban population (% of total) 21.2 40.6 30.6 GOP ($ billions) 2.5 2,651 1,239 GNI per capita, World Bank Atlas method (0) 390 1,416 507
Agriculture Land area (1,000 sq. km) 231 15.885 29,192
8 5 1 45 Agriculturai land (%of land area) Irrigated land (% of cropland) 17.0 .. 23.9 Fertilizer consumptlon (100 grams/ha of arable land) 76 2,296 646 Population density, rural (people/sq. km of arable land) 473 559 524
Forests and biodiversity
Annual deforestation (% change, 1990-2005) 0.5 -0.2 0.5 Nationally protected areas (% of total land area) 3.0 .. 7.7 Mammal species, total known 215 Mammal species, threatened 30 Bird species, total known 704 Bird species. threatened 2 1 GEF benefits index for biodiversity (0-100) 5.4
Forest area (%of land area) 69.9 28.4 24.8
Energy GDP per unit of energy use (2000 PPP $/kg oil equiv) .. 4.6 4.2 Energy use per capita (kg oil equiv) .. 1,007 501 Energy from combustible renewables & waste (%of tot.) .. 17.7 46.9
Electric Power consumption per capita (kWh) .. 1.184 358 Electricity generated by coal (% of total) .. 69.4 46.3
Energy imports, net (% of energy use) .. -2 4
Emissions and pollution CO, emissions per unit of GDP (ke/2000 PPP 0 of GDP) 0.1
0.2 Particulate matter (urban.pop..weighted avg., ug/cu. m) 25 Passenger cars (per 1,OW people)
Water and sanitation internal freshwater resources per capita (cu. m) Freshwater withdrawal
CO, emissions per capita (metric tons)
32,678
1.6 Agriculture (% of total freshwater withdrawal) 90
43 Rural (%of rural population) 38 Urban 1% of urban papulation) 66
24 Rural (%of rural population) 14 M a n (% of urban population) 6 1
Total (% of internal resources)
Access to improved water source (%of total population)
Access to Improved sanitation (%of total population)
Environment and health 1.0
Diarrhea prevalence (%of children under age 5) I 6.2 Undet-five mortality rate (per 1,000 live births)
Natlonal ascountlng aggregates, 2004 Gross savings (%of GNI) Consumption of fixed capital (% of GNI) Education expenditure (%of GNI) Energy depletion (% of GNI) Mineral depletion (% of GNI) Net forest depletion (% of GNi) CO, damage (% of GNI) Particulate emission damage (%of GNI) Adjusted net SaVlnRS I% of GNI)
ARI prevalence (%of children under age 5)
0.5 2.4 80 12
5,062
-
10.2 74 78 69 92 49 35 72
0.4 0.8 89 6 -
3.456
15.5 88 75 69 89 36 24 6 1
83 37 122
10.7 39.1 22.7 9.1 10.5 9.2 1.3 2.3 3.4 0.0 4.1 6.7 0.0 0.4 0.4 0.0 O D 0.7 0.4 1.2 1.1 0.1 1.2 0.8 2.5 23.9 7.3
Source: 2006 Lit t le Green Data Book
- 33 -
T
>
1 >
f
i
E 3 ; i
1
-r -r
- 34 -
1985 1995 2004 2005
Lao PDR at a glance 4/18/07
Growth of cap i ta l a n d GDP (%)
POVERTY and SOCIAL
2005 Population, mid-year (millions) GNI per capita (Atlas method, US$j GNI (Atlas method, US$ billions)
Average annual growth, 199945
Population (%) Labor force (%)
Most recent estimate (latest year avallable, 199045) Poverty (% of population below national poverty line) Urban population (% of total population) Life expectancy at birth (years) Infant mortality (per 1,000 live births) Child malnutrition (% of children under 5) Access to an improved water source (% ofpopulation) Literacy (% ofpopulation age 15+) Gross primary enrollment (% of school-age population)
Male Female
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
Imports of goods and services .. 16.1 29.0 16.6
GDP (US$ billions) Gross capital formationlGDP Exports of goods and ServicedGDP Gross domestic savings/GDP Gross national savingslGDP
Current account balancelGDP Interest paymentdGDP Total debVGDP Total debt servicelexports Present value of debvGDP Present value of debvexports
- Exports &Imports
(average annual growth) GDP GDP per capita Exports of goods and services
1985
2.4 7.0 4.0 1.3 I .3
-4.1 0.0
26.1 12.0
198595 1095.05
5.6 6.1 2.9 4.1
9.8
Lao PDR
5.7 460 2.6
1.6 1.6
34 27 61 70 40 51 47
116 124 109
1995
1.8
23.2 11.9 15.2
-10.8 0.4
36.3 6.2
2004
6.4 4.7 6.2
East Asia 8 Paclflc
1,885 1,627 3,067
0.9 1.3
42 70 29 15 79 91
115 116 114
2004
2.5 31.9 24.8 17.6 17.1
-14.3 1.6
100.9 17.1 54.5
195.4
2005
7.1 5.4
17.0
Low- income
2,353 580
1,364
1.9 2.3
31 59 80 39 75 62
104 110 99
2005
2.9 27.6 27.1 13.4 7.0
-19.9 3.1
100.8 20.4 50.8
184.5
200549
7.6 5.6
10.0
l eve iopmen t
Life
T
1 Access to improved water
-Lao PDR ~ Low-income group
Economic ratios.
Trade
T
Indebtedness
-Lao PDR ~ Low-income group
STRUCTURE of the ECONOMY
I% of GDP) Agricuiture' .. 55.7 Industry .. 19.2
Services .. 25.1
Household final consumption expenditure 90.0 74.6 73.2 General gov't final consumption expenditure 6.7 7.4 8.0 Imports of goods and services 9.8 37.3 32.6 30.9 -GCF &GDP
Manufacturing .. 14.3
1985-95 199545 2004 2005 IGrowth of expor t s a n d Imports (%)
- 35 -
EXTERNA~ DEBT and RESOURCE FLOWS
(US$ ~~~f~~~~~~ Total debt o ~ ~ s ~ a n ~ i ~ ~ g and ~~~~~~5~
l5RD IDA
Total debt sewice l5RD IDA
Official grants Official creditors Pnvate creditors Foreign dtrwt investment (net inflows)
Compo5i~ian of net resourm flows
Princtpal ~ ~ a ~ ~ n i s Net nows interest ~~~e~~ Net ~ ~ a ~ ~ ~ e r ~
1885
64 63
4 9
zass 42
1%
f985
58 $39 -80
-18 0
-88
31% -2 1
45
1885
819 0
27
7 0
15 36 0
-2 0
0 0 0 0 0 0
1995
t9 8 I S 7
I 8 5 6 5
-3 9
1 ss5
31 3 24
36 589 49 43
21 8
99 99
I01
1995
410 6% -249
-7 a4
-191
2063 -15
805
1885
875 0
267
28 0 3
130 75 0
95 0
19 28 I
27 2
25
2004
10 s 10 4
I 1 7 4 8
-3 3
Pa#
500 91 5s 27
977 90
1 08 468
108 120 90
2004
68 7 1,032 -348 -98 85
-358
346 12
226 20.582
2004
2,530 0
618
I20 0
33
113 54 0
234 0
28 37
63 29 5
24
2005
7 2 8 0
12 2 4 5
"3 2
200s
846 107 203
9 f ,206
102 1 BO 620
128 1 OD 128
2005
875 1,287 -392
469 $5
-516
564 11
2% 10.636
2005
2.810 0
649
182 0
14
7 ?? 79 a
349 0
35 9
28 5
21
I
Current Z ~ G G D U ~ I ~ batanca to GDP ($6)
Composition af 2004 debt {US$ rnffl.)
0 850
- 36 -
Annex B2 - L a o PDR Selected Indicators* o f Bank Portfolio Performance and Management
As of 04/25/2007
Indicator 2004 2005 2006 2007 Portfolio Assessment Number o f Projects Under Implementation a
Average Implementation Period (years) Percent o f Problem Projects by Number Percent o f Problem Projects by Amount Percent o f Projects at Risk by Number as
Percent o f Projects at Risk by Amount as
Disbursement Ratio (%) e
Portfolio Management CPPR during the year (yedno) Supervision Resources (total US$OOOs) Average Supervision (US$OOOs/project)
12 3.5 0.0 0.0 0.0 0.0
25.9
1,076 77
11 3.0
18.2 11.0 18.2 11.0 23.1
1,030 74
13 2.6 7.7 9.4 7.7 9.4
25.4
Yes 1,065
82
12 3.6 8.3 2.4
16.7 15.7 25.7
Yes 1,27 1
106
Memorandum Item Since FY 80 Last Five FYs Proj Eva l by OED by Number 28 8 Proj Eva l by OED by Amt (US$ mill ions) 555.5 170.5 % o f OED Projects Rated U or HU by Number 32.1 12.5 YO o f OED Projects Rated U or HU by Amt 18.9 11.3
a.
b.
d. e.
C.
f.
*
As shown in the Annual Report on Portfolio Performance (except for current FY). Excludes NTSEP, which i s attached to the NT2 Guarantee, and the GEF financed port ion o f the Rura l Electrif ication Phase I project. Also excludes PRSOs, wh ich are single tranche operations and close with the single disbursement. Average age o f projects in the Bank's country portfolio. Percent ' o f projects rated U or HU on development objectives (DO) a n d o r implementation progress (IP). As defined under the Portfol io Improvement Program. Ratio o f disbursements during the year to the undisbursed balance o f the Bank's portfol io at the beginning o f the year: Investment projects only. Includes actuals charged by COSU. 2007 cost i s estimated. Number o f projects under supervision includes projects closed during the year. Al l indicators are for projects active in the Portfolio, with the exception o f Disbursement Ratio, which includes a l l active projects as well as projects which exited during the fiscal year.
- 37 -
Annex B3 - Lao PDR IDA Program Summary
Fiscal Year Operation 2007 PRSO-3 2007 2007 ' FMCBC Supplemental
G M S Regional Power Trade Project - Lao PDR Portion
2008 PRSO-4 2008 Public Financial Management Project 2008 Khammouance Rural Livelihoods Project 2008 2008
Trade Facilitation and Exports Project Hydro-Mining Sector Capacity Development Project
2009 PRSO-5 2009 Transport Sector Project 2009 2009
Poverty Reduction Fund Project 2 G M S Regional Water Resources Mgmt Project - Lao P D R Portion
2010 PRSO-6 2010 Provincial Development Project 2010 Education Sector Project 2010 Forestry Sector Project 2 2010 Power Sector Project
201 1 PRSO-7 20 1 1 201 1 201 1 Hydropower Guarantee
Land Allocation and Management Project Environment and Social Project 2
Note; The program i s merely indicative. Actual size of projects, terms (IDA Credits or Grants), timing, and overall annual commitments will depend on the availability of IDA resources through the Performance Based Allocation exercise, the status o f project preparation, and the definition of the project to be financed by IDA to be agreed with the Government and other cofinancing partners.
- 38 -
Annex B3 - Lao PDR IFC & MIGA Program
Lao PDR - IFC and MIGA Program, FY 2004-2007 2004 2005 2006 2007
IFC approvals (US$m) 0.0 4.0 0.0 12.1
Sector (YO) Information 100.0 Agribusiness 83 .O Banking 17.0 Total 0.0 100.0 0.0 100.0
Investment instrument(%) Loans 100.0 83 .O Equity Quasi-Equity Other Total
17.0
0.0 100.0 0.0 100.0
MIGA guarantees (uS%m) 0.0 0.0
- 39 -
Annex B4 - Lao PDR Summary of Non-Lending Services: FY2007-2011
Ongoing and Planned ESW/AAA (bv CAS Clusters) - - . u
Regional IntegratiodPrivate Sector Development Economic Monitors (two issues each year) Financial Sector Assessment Investment Climate Follow-up ICT Strategy Investment Climate Assessment 2 Cross-Sectoral Infrastructure Studv
Natural Resources Management, Environment, and Rural Development Upland Livelihoods Typology CEMFlagship on Natural Resources Management Environment Moni tor Land Strategy Note Forestry Sector Strategy Note Water Sector Stratem Note
'2, - -
Public Finance Management N T 2 Revenue Management Intergovernmental Fiscal Relations and Decentralization Integrated Public Expenditure Review 2 Public Expenditure Tracking Survey 2 Support Program for Anti-Corruption Measures Peer Review o f State Audit Organization Su~uort Prom-am for Government Strategic Plan for Governance .. w v
Service Delivery and Vulnerability Teachers' Study Assessment o f Community Based Approaches for Poverty Reduction Health Sector Financing Strategy Education for All Assessment Social Moni tor (Youth Omortunities)
L A
Other4nfrastructure Rural Water and Sanitation Strategy Water and Sanitation Program Cross-border Cooperation in Sustainable Hydropower Development
- 40 -
Annex B5 - Lao PDR
Social Indicators
As of 4/25/2007
Latest single year Same regionlincome group
POPULATION Total population, mid-year (millions)
Urban population (% of population) Total fertility rate (births per woman)
POVERTY (% of population) National headcount index
Urban headcount index Rural headcount index
Growth rate (“4 annual average for period)
INCOME GNI per capita (US$) Consumer price index (2000=100) Food price index (2000=100)
INCOMElCONSUMPTlON DISTRIBUTION Gini index Lowest quintile(% of income or consumption) Highest quintile (% of income or consumption)
SOCIAL INDICATORS Public expenditure
Health (“4 of GDP) Education (% o f GNl)
Net primary school enrollment rate (% of age group)
Male Female
Access t o an improved water source (% of population)
Urban Rural
Total
Total
Immunization rate (% of children ages 12-23 months)
Measles DPT
Child malnutrition (% under 5 years) Llfe expectancy at birth (years)
Total Male Female
Mortality infant (per 1,000 live births) Under 5 (per 1,000)
’ Adult (15-59) Male (per 1,000 population) Female (per I, 000 population)
Maternal (per 100,000 live births) Births attended by skilled health staff (%)
1980-85
3.6 2.4
13.8 6.7
6 4
46 45 47
129 192
531 439
1990-95
4.7 2.5
17.2 5.5
46.0 33.1 48.7
370 13 14
63 67 58
15
68 54 40
52 51 53
99 131
464 389
1999-05
5.7 1.6
27.1 4.5
33.5 19.7 37.6
460 163 160
1.5
84 87 82
51 79 43
42 50 40
61 59 63
70 98
650 19
East Asia 8 Pacific
1,885.3 0.9
41.5 2.0
1,627 127
2.8
79 92 70
82 87 15
70 68 72
29 37
169 111 117 86
LO incor
2,352 1
3 30
5t 1:
3
t t 1
, t ,
t t
I
I
!
t 1:
25 2r 6t
r(
:AS Annex 85. This table was produced from the CMU LDB system. 05/04/l Vote: 0 or 0.0 means zero or less than half the unit shown. Net enroliment rate: break in series between 1997 and 1998 due to :hange from ISCED76 to ISCED97. Immunization: refers to children ages 12-23 months who received vaccinations before one !ear of age or at any time before the sutvey.
- 4 1 -
Annex B6 - Lao PDR Key Economic Indicators
As of 4/25/2007
Actual Estimate Projected Indicator 2002 2003 2004 2005 2006 2007 2008 2009 2010
National accounts (as % of GDP) Gross domestic producta
Agriculture Industry Services
Total Consumption Gross domestic fixed investment
Government investment Private investment
~ x p o r t s (GNFS)~ Imports (GNFS)
Gross domestic savings Gross national saving6
Memorandum i t e m Gross domestic product (US$ mil l ion at current prices) G N I per capita (US$, Atlas method)
Real annual growth rates (%, calculated from 00 prices) Gross domestic product at market prices Gross Domestic Income
Real annual per capita growth rates (“A, calculated from 00 prices) Gross domestic product at market prices Total consumption Private consumption
Balance of Payments (US$ millions) ~xp01-t~ (GNFS)~
Merchandise FOB Imports (GNFS)~
Merchandise FOB Resource balance Net current transfers Current account balance
Net private foreign direct investment Long-term loans (net) Official Private
Other capital (net, incl. errors & omissions) Change in reserved
Memorandum items Resource balance (“h o f GDP) Real annual growth rates ( YROO prices)
Merchandise exports (FOB) Primary Manufactures
Merchandise imports (CIF)
100 50 25 25
89 19 11 9
28 34
14 14
1,830
330
5.9 -18.5
4.2
3.4
517 370 649 633
-132 71
-131
60 78 60 18
-70 62
-7.2
-12.6
-14.2
100 100 49 47 26 27 26 26
81 82 28 32 11 7 17 25
26 25 31 33
21 18 20 17
2,149 2,508
360 420
6.1 6.4 73.0 38.5
4.5 4.7
-5.7 5.4
598 687 450 500 746 1,032 694 977
86 85 -148 -346
-175 -358
42 234 118 118
54 64
-4 -6 18 12
-6.9 -13.8
-3.6 5.6
17.0 28.2
100 44 30 26
81 28
6 22
27 31
13 7
2,887
460
7.1 49.8
5.4
3.5
875 646
1,267 1,206
85 -392
-576
349 115 79 37
100 II
-13.6
15.1
15.6
100 100 43 43 32 33 25 25
76 88 25 36
6 5 20 31
37 32 42 48
19 19 11 13
3,437 3,998
500 580
7.6 7.1 7.0 -5.6
5.8 5.2
-6.4 22.3
1,260 1,291 996 992
1,452 1,930 1,383 1,854
141 112 -192 -639
-460 -898
319 785 159 152
-116 -74 98 35
-5.6 -16.0
4.9 -0.1
9.1 31.3
100 100 42 41 34 36 24 23
94 88 36 32
6 5 30 26
34 32 48 45
21 18 14 15
4,448 4,956
660 760
7.9 8.2 5.2 -9.0
6.0 6.3
13.2 -2.4
1,521 1,558 1,198 1,209 2,152 2,203 2,071 2,117
113 122 -631 -645
-933 -805
855 742 120 104
-72 -71 30 30
-14.2 -13.0
25.8 8.0
8.9 0.8
(Continued)
100 40 38 22
84 25
5 20
32 38
18 14
5,492
840
7.6 -4.6
5.8
-0.9
1,812 1,434 2,212 2,122 -400 130
-609
545 97
-63 30
-7.3
19.3
-1.2
- 42 -
L a o PDR - Key Economic Indicators (Continued)
Actual Estimate Projected Indicator 2002 2003 2004 2005 2006 2007 2008 2009 2010
Public finance (as % of GDP at market prices)' Current revenues (incl. grants) Current expenditures Current account surplus (+) or deficit (-) Capital expenditure Foreign financing
Monetary indicators M2IGDP Growth o f M 2 e?) Private sector credit growth / total credit growth (%)
Price indices( YROO =loo) Merchandise export price index Merchandise import price index Merchandise terms o f trade index Real exchange rate (US$/LCU)f
Real interest rates Consumer price index (% change) GDP deflator ("h change)
14.5 13.0 12.1 12.7 14.3 14.0 14.3 14.1 13.6 7.2 7.1 7.4 8.0 9.1 9.5 9.2 9.0 8.9 7.2 5.9 4.7 4.7 5.2 5.2 5.2 5.2 5.2
10.1 11.0 7.3 6.0 5.5 5.1 4.9 4.7 4.6 2.6 5.1 3.6 3.0 2.7 2.5 2.3 1.9 1.6
19.2 18.5 19.1 17.4 21.5 21.2 19.6 19.5 19.6 37.6 18.2 21.4 5.7 38.7 10.2 4.5 12.6 12.8 10.3 254.9
109.9 138.7 145.7 163.8 240.6 240.0 230.2 215.2 213.9 109.0 102.1 112.2 119.8 125.9 128.6 131.9 133.8 135.7 100.8 135.8 129.9 136.8 191.1 186.7 174.6 160.9 157.7
10.6 15.5 10.5 7.2 6.8 4.0 4.5 4.5 4.5 10.7 15.7 10.4 8.0 4.7 4.5 4.5 4.5 4.5
a. GDP at factor cost b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use o f IMF resources. e. Consolidated central government. f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation.
- 43 -
Annex B7 - Lao PDR Key Exposure Indicators
As of 4/25/2007
Actual Estimate Projected Indicator 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Total debt outstanding and disbursed (TDO) (US$m)a
1,458 1,614 2,171 2,530 2,910 3,179 3,428 3,652 3,788 3,802
Net disbursements (US$m)' 101 241 378 239 383 274 310 .. . . . .
Total debt service (TDS) (US%m)"
Debt and debt service indicators VJ)
TDO/XGS~ TDO/GDP TDSIXGS ConcessionaLTDO
IBRD exposure indicators (%) IBRD DS/public DS Preferred creditor DSipublic DS ("h)" IBRD DS/XGS IBRD TDO ( u S $ n ~ ) ~
Of which present value o f guarantees (US$m)
Share o f IBRD portfolio ("h) IDA TDO (Us$m)d
IFC (uSSm) Loans Equity and quasi-equity le
MIGA
84 76 91 120 182 220 260 245 231 290
292 312 363 368 329 252 266 241 244 211 83 88 101 101 101 92 86 82 76 69 17 15 15 17 21 17 20 16 15 16 83 82 88 82 76 76 75 74 74 76
407 435 485 618 649 684 725 758 789 815
4 10 2
a. Includes public and publicly guaranteed debt, private nonguaranteed, use o f IMF credits and net short-
b. "XGS" denotes exports o f goods and services, including workers' remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the
Bank for International Settlements. d. Includes present value o f guarantees. e. Includes equity and quasi-equity types ofboth loan and equity instruments.
term capital.
- 44 -
P 9
- 45 -
Annex B8 - L a o PDR Statement of IFC's Portfolio
Statement o f IFC's H e l d and Disbursed Portfolio
As o f 04/30/2006 (In U S Dol lars M i l l i o n s )
Held Disbursed FY
Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1998 SEF Endeavor 0.15 0.00 0.00 0.00 0.15 0.00 0.00 0.00
1998/2001 SEF Settha 0.36 0.00 0.00 0.00 0.36 0.00 0.00 0.00 2001 SEF Vi l la Santi 0.92 0.00 0.00 0.00 0.92 0.00 0.00 0.00 2005 Mi l l icom Lao 4.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00
Total Portfolio: 5.43 0.00 0.00 0.00 4.43 0.00 0.00 0.00
Amrovals Pendine Commitment Loan Equity Quasi Partic
Phou BiaPhou Bia(2,817 m) (2,817 m)
X iangkhoang PlateauXiangkhoang Plateau
Plain of JarsP lain of Jars
Cammon PlateauCammon Plateau
BolovensBolovensPlateauPlateau
SASAYYABOURABOURYY
OUDOMSAIOUDOMSAI HOUAPHANHOUAPHAN
BOKEOBOKEO
PHONGSALPHONGSALYY
SEKONGSEKONG
AATTTTAPEUAPEU
XIANGXIANG
LUANG LUANG PHRABANGPHRABANG
LUANGLUANGNAMTHANAMTHA
VIENTIANEVIENTIANE
SASAVVANNAKHETANNAKHET
CHAMPCHAMPASSAKASSAK
KHAMMOUANEKHAMMOUANE
BOLIKHAMSAIBOLIKHAMSAI
SARASARAVVANEANE
KHOANG KHOANG
MM
ee kkoo
nngg
SSee BBaanngghhiioonngg
DDoonn
NNooyy
OOuu
BBeenngg
TTaa
XXeeBBaannggffaaii
OOuu
KKaaddiinngg
Gnot-OuGnot-Ou
MuangMuangKhoaKhoa
PakbengPakbeng
Boun-NuaBoun-Nua
ViangxaiViangxai
MeungMeung
KhamKham
PhokhounPhokhoun
NambakNambak
XaisombounXaisomboun
PaklayPaklay
XanakhamXanakham
KhamkeutKhamkeut
XeponXepon
PhinPhin
KhongxedonKhongxedon
PakxongPakxong
KhongKhong
SanamxaiSanamxai
XebangfaiXebangfai
SamouaySamouay
Ban Na PhanBan Na Phan
XXéénono
XiangkhoXiangkho
Ban NalBan Naléé
KasiKasi
VangviangVangviang
NanNan
PhongsalyPhongsaly
LuangLuangNamthaNamtha
BanBanHuaisaiHuaisai
LuangLuangPhrabangPhrabang
XiangXiangKhoangKhoang
PaksanePaksane
ThakhekThakhek
SaravaneSaravane
ChampassakChampassak AttapeuAttapeu
SekongSekong
SavannakhetSavannakhet
Sam-NevaSam-Neva
MuangMuangXaiXai
SayabourySayaboury
PonePoneHongHong
VIENTIANEVIENTIANE
VIETNAM
C H I N A
THAILAND
MYANMAR
CAMBODIA
PREFECTURE OFVIENTIANE MUN.
SAYABOURY
OUDOMSAI HOUAPHAN
BOKEO
PHONGSALY
SEKONG
ATTAPEU
XIANG
LUANG PHRABANG
LUANGNAMTHA
VIENTIANE
PREFECTURE OFVIENTIANE MUN.
SAVANNAKHET
CHAMPASSAK
KHAMMOUANE
BOLIKHAMSAI
SARAVANE
KHOANG
Gnot-Ou
MuangKhoa
Pakbeng
Boun-Nua
Viangxai
Meung
Kham
Phokhoun
Nambak
Xaisomboun
Paklay
Xanakham
Khamkeut
Xepon
Phin
Khongxedon
Pakxong
Khong
Sanamxai
Xebangfai
Samouay
Ban Na Phan
Xéno
Xiangkho
Ban Nalé
Kasi
Vangviang
Nan
Phongsaly
LuangNamtha
BanHuaisai
LuangPhrabang
XiangKhoang
Paksane
Thakhek
Saravane
Champassak Attapeu
Sekong
Savannakhet
Sam-Neva
MuangXai
Sayaboury
PoneHong
VIENTIANE
VIETNAM
C H I N A
THAILAND
MYANMAR
CAMBODIA
Mekong
Mek
ong
M
e ko
ng
Se Banghiong
Don
Noy
Ou
Beng
Ta
XeBangfai
Ou
Kading
Gulf ofTonkin
Nam NgumReservoir
To Gejiu
To Daluo
To Khon Kaen
To Ubon
Ratchathani
To Qui Nhon
To Vinh
To Khon Kaen
To Hanoi
To C
hian
g Ra
i
To Lincang
Xiangkhoang Plateau
Plain of Jars
Cammon Plateau
BolovensPlateau
Phou Bia(2,817 m)
22°N
18°N
22°N
20°N
18°N
16°N
14°N
16°N
14°N
104°E 106°E
104°E102°E100°E 106°E 108°E
LAO P.D.R.
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.
0 50
0 25 50 75 100 Miles
100 Kilometers
IBRD 33431
NOVEMBER 2004
LAO PEOPLE'SDEMOCRATIC
REPUBLICSELECTED CITIES AND TOWNS
PROVINCE CAPITALS
NATIONAL CAPITAL
RIVERS
MAIN ROADS
RAILROADS
PROVINCE BOUNDARIES
INTERNATIONAL BOUNDARIES