MR. BOUNSOM PHOMMAVIHANE

DIRECTOR GENERAL

FOREIGN TRADE POLICY DEPARTMENTMINISTRY OF INDUSTRY AND COMMERCE, LAO PDR

Lao PDR and the Integrated Framework

Overview of Presentation

1. Provide the history and context of the IF in Lao PDR

2. Go through some Key IF related programmes / projects

3. Highlight key success factors, challenges and opportunities

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Context

Lao PDR joined the Integrated Framework (IF) in 2004 and since then has been an active member of the IF process.

The Diagnostic Trade Integration Study (DTIS) and Action Matrix (AM) were validated during the National Validation Workshop, on 12 September 2006, following extensive stakeholder consultations.

IF Focal Point is Mme. Khemmani Pholsena, Vice-Minister of the Ministry of Industry and Commerce

The Donor Facilitator has been Australia, although we are now in the process of appointing a new DF.

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DTIS 2006

In depth research and documentation of key constraints

Led by a team from the World BankThe DTIS (2006) identified five priority areas

for development assistance for Laos: Export Competitiveness, Trade Facilitation, Business Environment, Trade Policy, Trade Agreements and Global

Opportunities, Trade Opportunities for the Poor

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IF Window II

$1m approved in 2007 and closed in June 2010

Very successful in the 4 focus areas, namely: (a) Institutional strengthening of the IF National

Implementation Unit ‐ IF Coordination and Implementation Structures

(b) Capacity building and technical support to Laos in the WTO accession negotiations (Component 4 of the Action Matrix).

(c) Improving the capacity of Lao garment companies and shift from CMT to FOB and strengthening the capacity of Association of Lao Garment Industry (Component 1 of the Action Matrix).

(d) Strengthening capacity to negotiate and administer Rules of Origin requirements (Component 4 of the Action Matrix).

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IF Window II project cont...

The project has laid the base for long term mainstreaming of trade in Laos through the establishment of the National Integrated Framework Governance Structure (NIFGS) and the IF National Implementation Unit (NIU)

We will hear more this from the Director responsible for the NIU in a following presentation

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Trade Development Facility (TDF)

$6.8m Multi-Donor Trust Fund, financed through the European Union and Australia, and managed by the World Bank

Signed on the 8th of August 2008 and scheduled to close in 2012

Implemented through the NIU and National IF Governance Structure established

Has seen the NIU grow in strengthAlso leveraged extra financing from other Donors on a

project basisHas provided Lao PDR with the appropriate resources

to effectively tackle some key trade constraints.

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EIF Tier 1

Project approved in December 2009 and MOU on February 2010.

Key to continuing to build the capacity and strength of the NIU

Total value of $899,999This will focus on

Continuing to strengthen the NIU, Developing proposals for Tier II projects Laying the base of the pending DTIS update.

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SECO – Laos UN Cluster Programme

Programme in design stageFinanced through Switzerland as part of a

Global UN Trade Cluster InitiativeInvolves UNCAD, UNIDO, ILO and the ITC.$4m project implemented through the four

UN agencies in conjunction with the Lao PDR National IF Governance Structure

Laos will be the first SECO UN Cluster programme to be implemented

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DTIS Update

Lao PDR’s DTIS is now 5 years old and needs to be updated

Key role to play in defining mainstreaming trade and defining Government

Strategy for the trade sector in our National Socio-Economic Development Plan (NSEDP 7) from 2011-2015.

Developing a trade SWAp approach for Lao PDRWill be led by the Government of Laos (GoL),

with close participation of Development PartnersRequesting resources from the EIF to enable

GoL leadership and control of the process.

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Success Factors

The key success of the IF Process in Lao PDR can be attributed to the MOIC and the Development Partners progress in the following main areas:

• Strengthening the institutional framework for coordinating Trade Related Assistance (TRA) i.e. NIFGS;

• Mobilizing substantial ODA through the set up of a multi‐donor trust fund, the Trade Development Facility and other sources of bilateral and multilateral funding;

• Moving to greater reliance on Government financial management and accountability systems

• Stronger Government/development Partner coordination

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Challenges

A key challenge is ensuring effective participation and coordination of line ministries.

Increased workload on government staff, particularly at middle and senior levels

Coordinating various Development Partner programmes & projects in the trade sector

Different reporting and operational requirements in Development Partner Projects. This is key and we need to work towards more common approaches

Undertaking a new approach to the DTIS update

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Successes and Opportunities

Good progress on implementing projects and opportunity to move towards a trade Sector Wide Approach

Continuing progress in establishing the Institutional Set-up for trade mainstreaming

Significantly enhanced Government ownership and alignment of trade mainstreaming and development partners assistance

Further opportunity to develop this through the DTIS update and Tier II projects.

EIF workshops and coordination provide a great opportunity to learn from our neighbours

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Thank you for your attention and support

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