LCT project team reports the project progresses and priorities in the 6th Project Review Committee (PRC) Meeting

Vientiane Capital, 07 December 2021, the Ministry of Industry and Commerce organized a Project Review Committee meeting (PRC) of the Lao Competitiveness and Trade (LCT) to review its performance during the last six months and endorse priorities for 2022. The meeting was chaired by H.E. Bountheung Douangsavanh, the Deputy Minister of the Ministry of Industry and Commerce. More than 90 participants from the project implementation agencies (IAs) from both public and private sectors and donors joined the meeting in the hybrid format (partially in-person and online).

H.E. Bountheung Douangsavanh, the Deputy Minister of Ministry of Industry and Commerce, said in his opening remarks that “Today’s meeting is taking place in critical juncture for Laos as outbreak of the COVID – 19 continues to spread causing severe economic disruptions and a significant fiscal squeeze – from the global demand shock, supply chain disruptions and significantly reduced income from tourism and remittances. At the same time, the crisis urges development projects for the much-needed reforms for economic recovery. Therefore, I would like to take this opportunity to express my great gratitude to our development partners, namely Australian Aid, Irish Aid, USAID and World Bank, which strongly support the LCT project through Multi-Donor Trust Fund. In addition, I would like to provide a special appreciation for the additional financing to the LCT project, which has just been approved in October.

Mr. Sengphanomchone Inthasane, the Deputy Director-General of the Department of Planning and Cooperation, Ministry of Industry and Commerce, presented key implementation progress, challenges, and priorities in 2022 in brief for all project pillars. The presentation covered all components of the project, which consist of component A – improving the business environment; component B – supporting the National Trade Facilitation Secretariat (NTFS), and implementation of commitments under WTO Trade Facilitation Agreement (TFA); component C – Business Assistance Facility (BAF II) – a 50:50 Matching Grant Fund to improve firm-level competitiveness; and component D – Project management coordination, improving policy making and transparency and supporting Public-Private Dialogue.

The key implementation progress of the LCT project has been reported in the meeting as follow:
• Finalization of all technical outputs under A.1- Making it easier to start a business, namely reform action plan, abolishment of procedure for VAT registration and Tax orientation and functional required specifications of online business registration;
• Finalization of the package of best practice business licensing guidelines and completion of the comprehensive portal of inventory of business licenses (IBL) – http://www.bned.moic.gov.la/, and establishment Intra-Ministry and Inter-Ministerial coordination structures for streamlining business operating licenses;
• Strengthened coordination and progress reporting mechanism on the implementation of business environment reform under PM Order No. 02 and No. 03;
• National Trade Facilitation Committee (NTFC) issued instructions to kick start the development of the Joint Risk Management Framework at borders;
• Completion of the Time Release Study (TRS) for 2020 and the first private sector perception on TFA implementation are critical for prioritization of the National Trade Facilitation Agenda;
• Advisory services and support through matching grants under BAF are on track to achieving pre-defined targets despite the adverse impact of the COVID-19 pandemic. As of end-November 2021, 222 grants had been approved with value at roughly US$1,283,517, of which 138 (63.7%) were to women-led businesses, and 21% were to firms headquartered outside of Vientiane Capital, and more than 90% of the firms applying for the BAF matching grants are SMEs;
• Public-Private Dialogue (PPD) under Lao Business Forum (LBF) has been gaining stronger public support, including attention from policymakers and efforts to improve inclusiveness are being paid off with stronger participation from foreign investors and provincial businesses;
• The project was rated Satisfactory for Implementation Progress at the last support mission in November 2021.

During the meeting, the Implementing Agencies (IAs) representatives presented the priorities for the next fiscal year. H.E. Bountheung Douangsavanh closed the meeting by acknowledging that significant progress was being made in several components. However, a lot still needs to be done in 2022 to make sure we make real change on the ground in facilitating trade and investment.

This meeting was supported by Lao Competitiveness and Trade (LCT) project, which is a multi-donor project funded by the World Bank Group, Australian Aid, Irish Aid, and USAID that aims to eliminate barriers to private sector-led growth by improving the regulatory environment, lowering trade costs and raising firm-level competitiveness.