Lao Competitiveness and Trade Project Concludes with Remarkable Achievements, Boosting Sustainable and Inclusive Economic Growth in Laos

The Ministry of Industry and Commerce of Lao PDR has successfully concluded the Lao Competitiveness and Trade Project (LCTP) in Vientiane Capital. The LCTP significantly reduced the barriers to private sector-led growth through improving the regulatory environment with better and more inclusive policies, reducing trade costs, and increasing firm-level competitiveness. The project was financed with $10 million IDA credit and $9.5 million from the Multi-Donor Trust Fund with funding from the Department of Foreign Affairs and Trade (DFAT) Australia, Ireland, and the United States Agency for International Development (USAID).

LCTP is implemented by a dedicated unit, the National Implementation Unit (NIU) within the Permanent Secretary Office in the Ministry of Industry and Commerce (MOIC).
The Project has four Pillars, including A. Improving Business Environment; B. Facilitating Trade and Connecting to Markets; C. Improving Firm-Level Competitiveness; and Supporting Better and More Inclusive Policies.

Despite enormous challenges caused first by the impact of COVID-19 and macroeconomic instability, the Project has delivered remarkable results, including: 1) removal of barriers to business entry through simplification of business startup procedures, establishment of licensing portal, and the process automation leading to significant reduction in time and cost for starting a business in the country; 2) implementation of border management procedures, including introduction of joint risk management framework, streamlining non-tariff measures, implementation of commitments under WTO Trade Facilitation Agreement, and strengthening of inter-agency coordination under the National Transport and Trade Facilitation Committee; 3) through Business Assistance Facility Phase II, the project disbursed 557 matching grants to 363 companies throughout the country; 4) through the project interventions, the project has improved the effectiveness of Aid for Trade governance structure through strengthening operations of Program Executive Committee and Project Review Committee and Public Private Dialogue under the Lao Business Forum supported by the project made important contributions to resolving issues constraining private sector investment in the country.

Quotes:

“The partnership that the MOIC has had with the World Bank, Australia, US and Ireland spans over the last 15 years. The partnership has focused on regional and international economic integration, business enabling environment, trade facilitation and non-resource sector’s competitiveness in regional and international markets. These efforts are highly relevant to our national strategy of diversifying the economy, rebuilding from COVID-19, and graduating from Least Developed Country (LDC) status by 2026.” Said H.E. Mr. Malaithong Kommasith, Minister of Industry and Commerce.

“Over the past six years, we have worked together through this project on some difficult issues and have seen good results and Australia is actively considering support for the second phase of the LCT project. We look forward to collaborating closely in the design process to ensure that the next phase addresses emerging priorities.” Said H.E. Ms. H.E. Ms. Megan Jones, Australian Ambassador to Lao PDR.

“This project reflects our belief in the transformative potential of empowering private sector entities as key drivers of sustainable economic development. This project has placed the private sector at the heart of its efforts, recognizing its pivotal role in driving economic growth and creating sustainable development opportunities.” Said H.E. Ms. Heather Variava, US Ambassador

“The World Bank and development partners will also continue to work closely with the Ministry on the next phase of project to deepen further business and trade facilitation reforms and the country’s priorities in fostering private sector led growth that creates more job opportunities in Lao PDR” said Mr. Alexander Kremer, World Bank Country Manager.

The LCTP has been instrumental in promoting sustainable and inclusive economic growth through improving the business enabling environment, reducing trade costs, and improving firm level competitiveness, and promoting better policies and public private dialogue in Laos.