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Lao People's Democratic Republic

Second-generation capacity development: A story of Malaysia-Laos knowledge exchange on reforming civil service

Jana Kunicova's picture

What do you imagine when you hear the words “capacity development”? Most development professionals associate capacity development with training, seminars and perhaps study tours.  Most of the countries the World Bank works in require a significant boost in their capability to implement policies, programs and projects, especially in countries supported by the Bank’s fund to the poorest, International Development Association (IDA).

For training to be sustainable and have high impact, it should be targeted to a particular public sector problem, and coupled with initiatives to improve organizational and institutional capacity. 

How do we achieve sustained growth? Through human capital, and East Asia and the Pacific proves it

Michael Crawford's picture
Students at Beijing Bayi High School in China. Photo: World Bank


In 1950, the average working-age person in the world had  almost three years of education, but in East Asia and Pacific (EAP), the  average person had less than half that amount. Around this time, countries in  the EAP  region put themselves on a path that focused on growth  driven by human capital. They made significant and steady investments in  schooling to close the educational attainment gap with the rest of the world. While  improving their school systems, they also put their human capital to work in  labor markets. As a result, economic growth has been stellar: for four decades  EAP has grown at roughly twice the pace of the global average. What is more, no  slowdown is in sight for rising prosperity.

High economic growth and strong human capital accumulation  are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore  the way skills and labor markets interact: Human capital is the central  determinant of economic growth and is the main—and very likely the only—means  to achieve shared growth when technology is changing quickly and raising the  demand for skills. Skills promote productivity and growth, but if there are not  enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and  average skill-levels keep rising, technological change can drive productivity  and growth without stoking inequality.

Lens on Lao Species: World Wildlife Day 2017

George Stirrett's picture
Lao PDR’s forests are home to incredible and diverse flora and fauna.  One of the areas with a high concentration of biodiversity and endangered native species is the Nam Et Phou Louey National Protected Area in Luang Prabang, which borders Houaphan and Xieng Khuang provinces.

Located in the northern area of the country, it is the second largest protected area in Lao PDR, and co-managed by the provincial offices of forest resources conservation and local communities.

Since 2013, the World Bank has supported this area with an $800,000 grant under the Nam Et Phou Louey Tiger Landscape Conservation project. Together with the Wildlife Conservation Society, our implementing partner, the project promotes the use of sustainable natural resources and the protection of species threatened by human interaction.

Economic diversification: A priority for action, now more than ever

Cecile Fruman's picture

The global economy is stagnating, and uncertainty about its future is rising. These trends weigh heavily on countries that depend on the production and export of a small range of products, or that sell products in only a few overseas markets.  Prices of the minerals and other basic commodities that dominate the exports of many poor countries have also declined sharply. All of this points up the need for diversification strategies that can deliver sustained, job intensive and inclusive growth.

The World Bank Group’s Trade & Competitiveness Global Practice (T&C), a joint practice of the World Bank and International Finance Corporation (IFC), is working with a growing roster of client countries eager to achieve greater economic diversification. This is a worthy goal regardless of economic conditions, but especially so now, as developing countries with sector-dependent economies face mounting pressures.

Chile is an example of a diversified economy, exporting more than 2,800 distinct products to more than 120 different countries. Zambia, a country similarly endowed with copper resources, exports just over 700 products — one-fourth of Chile’s export basket — and these go to just 80 countries. Other low-income countries have similarly limited diversified economies. The Lao People’s Democratic Republic and Malawi, for example, export around 550 and 310 products, respectively. Larger countries that export oil, such as Nigeria (780 products) and Kazakhstan (540 products), have failed to substantially expand the range of products they produce and export.


AJG Simoes, CA Hidalgo. The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence. (2011)
http://atlas.media.mit.edu/en/profile/country/chl/#Exports

While the sluggish global economy is creating economic problems for traditional exports, other economic trends offer new routes and opportunities for poor countries to diversify. The trend toward the spatial splitting up of production across wide geographic areas, and the emergence and growth of regional and global value chains, offer new ways for developing countries to export tasks, services and other activities. Value chains offer developing countries a path out of the trap of having to specialize in whole industries, with all of the cost and risk that such a strategy entails.

Sustainable Growth in Lao PDR Will Lead to Poverty Reduction and Better Lives for All

Victoria Kwakwa's picture



My visit to Lao PDR this week has convinced me that this nation is moving toward the right path to sustained economic growth, which could lead to less poverty and better lives for all of its people.
 
Over the past two decades, Lao PDR has made significant development progress. It is one of the fastest growing economies in East Asia, with GDP growth averaging 8 percent a year since 2000. Lao PDR also successfully met the Millennium Development Goal of reducing extreme poverty, based on its national poverty line, to below 24 percent by 2015 from 33.5 percent in 2002.
 
As I have witnessed during my trip, people are enjoying better living conditions, with improved access to water supply, sanitation, roads, and power. Indeed, Lao PDR’s electrification program is one of the most successful in the world, and more than 90 percent of households now have access to electricity. Lao PDR also has built 50 percent more road surfaces in the last decade, and two-thirds of all Lao villages are now connected by all-season roads.

The logical next step toward gender equality: Generating evidence on what works

Sudhir Shetty's picture
© World Bank
College students in Vietnam. © World Bank


As in much of the rest of the developing world, developing countries in East Asia and the Pacific (EAP) have made progress in closing many gender disparities, particularly in areas such as education and health outcomes. Even on the gender gaps that still remain significant, more is now known about why these have remained “sticky” despite rapid economic progress. 

Ensuring that women and girls are on a level playing field with men and boys is both the right thing to do and the smart thing to do. It is right because gender equality is a core objective of development. And it is smart because gender equality can spur development. It has been estimated, for instance, that labor productivity in developing East Asia and Pacific could be 7-18% higher if women had equal access to productive resources and worked in the same sectors and types of jobs as men.

Strengthening Lao PDR’s financial system by making room for failure

José de Luna-Martínez's picture


 

To function properly, a financial system needs to have two doors in place: an “entry” and an “exit”. The first one enables qualified local or foreign institutions to enter the marketplace to provide innovative products and services – such as savings, investments, credits, payments and insurance – to households and firms at competitive prices. The second facilitates the rapid and orderly dissolution of those financial intermediaries that are not able to survive competition, manage risks properly, or comply with rules and regulations.

Streamlining Lao PDR’s trade regulations to help its poorest citizens

Jose Daniel Reyes's picture
Laos customs office


Economic growth and global economic integration go hand-in-hand for Lao PDR.  As a small, land-locked, and commodity-dependent country in a fast-expanding region, Lao PDR’s growth prospects are directly linked to its ability to integrate with the global economy. This is why the government has been prioritizing economic integration with both the Southeast Asia region and the multilateral rules-based trading system. In 2010, Lao PDR became signatory to the ASEAN Trade in Goods Agreement (ATIGA), acceded to the World Trade Organization (WTO) in 2013, and ratified the Trade Facilitation Agreement in 2015.

However, efforts to modernize Lao PDR’s regulatory framework governing trade and the overall investment climate have not been matched with welfare improvements. In a recent study, we provide a comparative overview of the landscape of Non-Tariff Measures (NTMs) affecting imports in Lao PDR, and identify lingering regulatory hurdles that hamper its ability to reap the gains of deeper integration with the global economy. Our findings reveal that while the existing NTM framework is broadly in line with regional practices (figure 1), the current import licensing scheme in Lao PDR and the associated array of fees linked to it raises the time and cost to bring products to market.Ultimately, the system of quantitative controls applied by Lao PDR is equivalent to an ad-valorem tariff of 5.4%, which is well above regional and world averages.

There are three main problems associated with the procedures for obtaining import licenses in Lao PDR:

Can Singapore inspire Laos to build water-smart cities?

Henrike Brecht's picture
Photo: Songquan Deng/Flickr
Photo: Songquan Deng/Flickr
Singapore: the beautiful city state, famed for its lush gardens, splendid food, culturally diverse communities, and the cocktail Singapore Sling. I was there last week for the World Bank’s 2016 Urban Week. The event brought together leading city officials from all over the world and staff from international organizations. It was an excellent exchange on how to tackle urban planning in a sustainable and integrated way. One lesson that emerged from the gathering is that cities that are resilient to natural disasters are also more economically competitive. Singapore is itself a prime example of a city that has understood the importance of connecting disaster risk management, urban planning, and quality living.

After the Adolescent Girls Initiative: Recommendations for Future Research

Sarah Haddock's picture
The Adolescent Girls Initiative (AGI) pilots taught us a great deal about how to make skills training more female-friendly and how to improve the quality of skills training broadly. They also highlighted new questions for the next generation of skills training projects to answer.

Five of the eight AGI pilots were able to successfully embed a rigorous impact evaluation design. We also had a centralized research team that ensured standardization of the research objectives and methods as much as possible. You can access the papers from the individual pilots on our website, and you can download useful documents such as our evaluation concept notes, list of core indicators, and survey instrument in our Resource Guide.

Here are some key recommendations for further research:

Unbundle evaluation designs and provide cost-benefit information by project component. AGI evaluations weren’t able to compare the relative impact of technical training versus life skills training or measure the impacts of specific project strategies, such as mentoring or placement assistance. Similarly, we can say very little about disaggregated costs of these components.

Have a cash-only evaluation arm. Youth employment interventions of all kinds are under pressure to demonstrate that their impacts are larger than what could be achieved through giving cash directly. See, for example, this relevant blog post from Chris Blattman. As part of this agenda we also need to understand the differential impacts of cash provision on young men and women.

Determine the optimal composition, intensity, and delivery of different mixes of skills. This is particularly true for life skills training, which tends to be much more heterogeneous across contexts and is far less expensive to implement than technical or business skills. Related questions around the appropriate age to focus on different types of skills and whether training works better in sex-segregated classrooms will aid in designing the next generation of youth employment programs.

Test strategies for job placement. Progress has been made in improving the delivery of skills training and in helping youth start businesses, but much less is known about how to cost-effectively assist youth to find and retain wage jobs. Interventionssome implemented in AGI pilotsthat deserve more testing include:
  • Variations in the length and intensity of job placement support: Most AGI interventions  included three to five months of placement support;
  • Performance-based contracts for the training providers, as used in both the Liberia and Nepal AGI pilots, though these have not been tested rigorously;
  • Wage subsidies, as tested among young female community college graduates in the Jordan AGI, which achieved significant short-term gains but no long-term impact;
  • Partnerships with large firms to create custom training programs.
Find ways to reduce occupational segregation. Few interventions have tackled the issue of occupational segregation head-on. Studies from the World Bank Group Africa Gender Innovation Lab show that lack of information is indeed a constraint that prevents women from crossing over into male-dominated fields, and that having a male mentor seems to help women make this transition. However, the only randomized controlled trial we are aware of, involving an informational intervention in Kenya, was unsuccessful in increasing women’s engagement in male-dominated trades. We need to learn how to break occupational segregation while minimizing women’s exposure to harassment, social isolation, and other risks. One approach to test is the encouragement of women to enter non-traditional trades in groups, as in the Liberia and Rwanda AGIs. Research is also needed on how to induce young women to enter new industries in which no clear gender assignment has yet been made, as in the business process outsourcing industry in India.

Untangle the relationships between young women’s labor and health outcomes. The AGIs in Liberia and Nepal, using a technical and vocational education and training (TVET) model, did not have significant impacts on sexual behaviors or health outcomes, while the Uganda girls' club-based approach dramatically lowered fertility and increased condom use. One distinguishing factor about the Uganda project was that it worked with younger girls, starting at age 14. Another important question to answer is whether there is an optimal age threshold or whether there are other conditions under which skills training projects can affect sexual behaviors.
 

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