Lao PDR MDG Road Map

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CONTEXT

OBJECTIVE

This Road Map builds on the recommendations of the MDG mid-term review progress report 2008 and identifies concrete measures to achieve a breakthrough in the achievement of the MDGs in LAO PDR by 2015. Specifically, it will do so through strengthened implementation of sector strategies (National Education Plan, Nutrition Policy Framework etc.), by providing the bases for improved partnerships as well as greater coherence and comprehensiveness of the Government’s the 7th National Socio-Economic Development Plan (2011-2015).

The MDG Road Map attempts to answer three key questions:

What has been achieved on the MDGs thus far and what are the lessons learned? (MDG status and trends)
What are the main constraints to accelerate progress towards the achievement of the MDGs? (mitigating cross-cutting challenges and sector bottlenecks)
How can these constraints be effectively addressed and actions towards the achievement of the MDGs accelerated? (tapping into existing opportunities and proposing actionable recommendations for Lao PDR)

It has been prepared with country cohesion in mind and reflects the outcome of a consultative process that includes all major stakeholders and builds upon lessons learnt from the implementation of the 6th National Socio-Economic Development Plan and the work of the government’s different partners.

The intention is to avoid “reinventing the wheel”, thus to take what is being done or planned already in country and organize it more purposefully and effectively, to give greater clarity, focus and drive to the efforts of the government and its partners. New initiatives have been added only selectively, when needed to close the gaps. Another intention is to propose a way forward that is a guide to and basis for action rather than an all-encompassing blueprint for work.

MDG STATUS AND TRENDS

This section will deal with the development environment, noting that while positive changes are taking place, progress has been slow in certain sectors and/or some parts of the country and may be even threaten by a number of economic and non-economic factors.
Lao PDR’s achievements documented in the MDG Progress Report 2008 are significant. In recent years, Lao PDR has successfully achieved real GDP growth that is close to 8 percent per annum. This is better than the economic performance of other land-locked, least developed countries (LDCs) in the Asia-Pacific region. As a result, poverty declined steadily from 46 percent to 33 percent in 1992-2002 and the country is on course to halve poverty by 2015. Net enrollment rates in primary schools rose from 58 percent in 1991 to 84 percent in 2005. Child mortality indicators are improving satisfactorily and the infant mortality target is within reach. Considerable progress has been made in tuberculosis case detection, and death rates from malaria fell from 9 to 0.4 per 100,000 between 1990 and 2006. In the same period, the proportion of people with access to safe drinking water and basic sanitation also increased.

The 2008 MDG Progress Report also shows that progress on some MDGs has been less than satisfactory and needs to be stepped up. There has been little reduction in the extent of child malnutrition since 1990. Despite considerable efforts, 38 percent of children under five years of age are underweight and 41 percent of children in the same age group suffer from chronic malnutrition. Although access to education has improved, there are concerns over the quality of education as well as equitable access across the population. Overall, fewer girls than boys are enrolled at all levels, and this share is even lower in higher education. Access to and quality of health care varies significantly by location and among income groups. The improvement in mortality indicators is not matched by continued progress in the immunization of one-year old children against measles. The proportion of births attended by skilled birth attendants increased by less than 5 percentage points between 1994 and 2005. Lao PDR’s forest resources that once covered about 70 percent of the total land area had declined to 42 percent by 2002. And access to safe drinking water is more widespread than access to basic sanitation. Table 1 provides a summary of the progress thus far. Further information is provided in Annex I.

Table 1: MDG Progress in Lao PDR

KEY CHALLENGES

CROSS-CUTTING CHALLENGES

This section will present the non-sector as well as the sector related challenges that must be addressed in a sustained way to achieve breakthrough on the MDGs. It includes:

Geographical topography, population dispersion and diversity

Lao PDR is sparsely populated, with a population of around 5.6 million distributed across 10,547 villages . Lao PDR is also one of the most ethnically diverse countries in the world, with 49 official ethnic groups comprising some 200 ethnic subgroups. While an estimated 65 languages spoken by the different ethnic groups contributes to the rich linguistic diversity in the country, it also makes the task of providing these groups with quality services more complex.

Inequalities

The improvement in the macro-economic picture of poverty, while impressive, masks real disparities between rural and urban populations, between different geographical regions, between men and women and between ethnic groups. Poverty in Lao PDR remains among the highest in the region with 80 percent of the poor living in rural areas and relying on subsistence agriculture and natural resources for income and food. Poverty in the uplands is estimated at 43.9 percent compared to 28.2 percent in lowland areas. Disparities in access to services (education and health) are also predominant between urban and rural areas and between different ethnic groups.

Fiscal Space (particularly in the context of the financial and economic crisis and its potential impact on growth and MDG reversal)

Budgetary allocations are currently insufficient to cover the costs of all public sector investments related to the achievement of the MDGs and may be further threatened by fiscal and economic policies in response to the global financial and economic crisis. This sub-section will look at past trends in government spending on social services and provide insight as to how the current global economic downturn may threaten progress on all the MDGs —by reducing the ability households and government to invest in key social services.

Governance

This sub-section will look at different governance challenges that may affect fiscal space, allocation and utilization of resources and service delivery.

Decentralization in the Context of Limited Capacity and Lack of Coherence between National and Local Levels

Effective local government is critical to improving access to services as well as mobilizing and disbursing local resources. The capacity challenges of local governments at the provincial and district levels are recognized as major impediments to social and economic development and achievement of the MDGs.

Environmental Sustainability

There is a need of balancing between achieving environmental and social sustainability and promoting economic development of the country's abundant natural resources. This refers specifically to deforestation, land degradation and loss of biodiversity as well as disaster mitigation due to the vulnerability to floods is also a challenge.

Cluster Munitions and UXO

Currently, 15 out of the 17 provinces in Lao PDR are affected by cluster munitions and unexploded ordnance. In addition to causing deaths and injuries, UXOs contributes to food insecurity, limiting access to markets and delaying development initiatives. Currently, 40 percent of the population in Lao PDR is malnourished and every second child living in rural areas is chronically malnourished.

Data Quality

A number of data-related challenges have been identified that need to be addressed. The country’s statistical capacity is relatively weak. In addition, there are problems with reporting and recording of data at all levels and systematically using data for decision making.

SECTOR BOTTLENECK ANALYSIS

Special attention needs to be paid to MDGs that are off-track. The reasons for slow and/or insufficient progress are likely to include alternate planning priorities, limited funds, inadequate capacities at various points in the service delivery chain, misaligned incentives and poor monitoring systems. The sector bottleneck analysis would identify constraints in four critical areas: (1) policy and planning framework, (2) financing framework, (3) service delivery, and (4) demand/self-efficacy issues.

Policy

Are the appropriate policies in place? Are they adequately implemented and enforced?

Finance

Quantity – are allocated resources sufficient?
Quality – are resources allocated efficiently and effectively?

There is also a need to assess the effectiveness of donor support based on the following characteristics:

Ownership: The countries exercises effective leadership over its development policies and strategies and coordinate development actions;
Alignment: Donors base their overall support on partner countries’ national development strategies, institutions and procedures;
Harmonization: Donor actions are more harmonized, transparent and collectively effective;
Managing for Results: Resources are managed effectively and there is improved decision-making for results;
Mutual accountability: Donors and partners are accountable for results.

Service Delivery

Human Resources: Is there a well-performing workforce working in ways that are responsive, fair and efficient, given available resources and circumstances (i.e., there are sufficient staff, fairly distributed; they are competent, responsive and productive)?
Infrastructure: Are quality services being delivered effectively and safely to those who need them, when and where needed, with minimum waste of resources?
Equipment and supplies: Does the system provide for equitable access to essential supplies and technologies of assured quality, safety, efficacy and cost-effectiveness?
Governance:

1. Is there a well-functioning information system that ensures the production, analysis, dissemination and use of reliable and timely information on determinants, system performance and outcomes?
2. Does the system provide for effective oversight, coalition-building, regulation, attention to system design, and accountability?

Demand/Self-Efficacy

Are users empowered (knowledge, skills, resources etc.) and do they have the community support necessary to use services when these services are available?

OPPORTUNITIES

Government’s Commitment to Graduate from LDC Status by 2020

The Government aims to maintain the rapid economic growth to improve the living conditions of its people, meet the MDGs by 2015 and graduate out of LDC status by 2020. Criteria for graduating from LDC status are heavily based on indicators such as those outlined below:

a low-income criterion, based on a three-year average estimate of the gross national income (GNI) per capita (under $750 for inclusion, above $900 for graduation);
a human resource weakness criterion, involving a composite Human Assets Index (HAI) based on indicators of (a) nutrition, (b) health, (c) education, and (d) adult literacy;
an economic vulnerability criterion, involving a composite Economic Vulnerability Index (EVI) based on indicators such as (a) the instability of agricultural production, (b) the instability of exports of goods and services, (c) the economic importance of non-traditional activities (share of manufacturing and modern services in GDP), (d) merchandise export concentration, (e) the handicap of economic smallness (as measured through the population in logarithm), and the percentage of population displaced by natural disasters.

These criteria offer the opportunity for greater investments in human development, the social sectors and environment sustainability.

Sustained Growth and Political Stability

Strong National Commitment to the MDGs and the Opportunity to Integrate into the 7th National Plan

MDGs will form the central focus of the 7th National Socio-Economic Development Plan (2011-2015).

The Country’s Natural Resources

Lao PDR has a wealth of natural resources: forest cover that is substantially higher than in surrounding countries; the largest per capita volume of internal renewable water resources in the region; and considerable mineral resources, such as gold, lignite and copper. Lao PDR is also one of the most biodiversity-rich countries in the region.

Strong Support from the International Partners and Steady Flow of ODA

The National Round Table Process

Under the Round Table process, Lao PDR currently has 8 Sector Working Groups that bring together representatives from government and donor agencies, and NGOs. The SWGs are forums to discuss and build consensus on development priorities, and improve sectoral aid coordination and effectiveness as set out in the Vientiane Declaration Country Action Plan. Under the common framework of the Round Table Process, these groups commit to Lao PDR's development efforts in the areas of their expertise under the leadership of the Government of Lao PDR.

RECOMMENDATIONS

Despite progress and achievements made over the past years, there is a lot that needs to be done both by the Lao Government and the international community to help the country and its people to attain all MDGs and targets. However, good practices and lessons learned can be drawn from the implementation process undertaken in the country and in other countries, where similar conditions apply.

Prioritization and sequencing of interventions and programmes for MDG scaling-up should be guided by the following principles:

Local engagement and participation

Scale-up will only be successful and sustainable if programmes build capacity for effective management, service delivery and monitoring at provincial, district and village levels and empower individuals to make informed choices.

Integrated approaches

There are insufficient resources and capacity to scale up the multitude of vertical programmes that currently exist. Programmes that maximize use of limited resources through integrated delivery of multiple interventions and services should be prioritized. Institutions should seek to identify and leverage partners with complementary competencies in order to deliver integrated approaches, rather than build new internal competencies. This principle also reflects the Vientiane Declaration on Aid Effectiveness.

Building on existing activities and structures

Significant time and investments have already been made to strengthen the capacity of health, education and agricultural systems. To maximize the effectiveness of limited resources in achieving the MDGs, programmes that build on existing activities and structures should be prioritized.

Prioritize evidence-based solutions that are rapidly scalable

Programmes that can rapidly reach scale need to be identified and prioritized. This includes activities with a scale-up plan up to 2015, which already have a proven track record through successful pilot implementation, and/or have a strong evidence base.

Invest strategically in direct interventions to reduce poverty and exclusion among target groups

Based on the analysis above, a specific action plan will be proposed to address the identified cross-cutting challenges and sectoral bottlenecks. This action plan would include guidelines for action and a framework for results in the following strategic areas:

Within the context of the sector working groups and focusing specifically on MDGs that are off course (maternal and child health, environmental sustainability etc..), targeted interventions using best practices models to address sector constraints that have been identified through the sector bottleneck analysis. These interventions will facilitate the implementation of sector strategies and policies that have already been developed.

Localizing human development efforts using proven integrated services models that can be adapted to the country contextsand incorporate existing initiatives. The Millennium Villages approach could be an innovative model for helping rural communities in LAO PDR lifts themselves out of extreme poverty with limited investment (USD $120 per capita/per year). The model uses new advances in science and technology and entrepreneurial managers to create and facilitate sustainable, community-led action plans that are tailored to the villages' specific needs and designed to achieve the Millennium Development Goals. Simple solutions like providing high-yield seeds, fertilizers, medicines, drinking wells, and materials to build school rooms and clinics are brought together in an integrated manner to effectively combat extreme poverty and nourish communities into a new age of health and opportunity. Improved science and technology such as agroforestry, insecticide-treated bed nets, antiretroviral drugs, internet use, remote sensing, and geographic information systems enriches this progress. Over a 5-year period, community committees and local governments build capacity to continue these initiatives and develop a solid foundation for sustainable growth.

Large scale “green Jobs” which address poverty and yield co-benefits of adaption to climate change and reduce vulnerabilities. One example is a project currently being implemented in rural India under the National Rural Employment Guarantee Act (NREGA). The flagship anti-poverty plan, started three years ago and provides 100 days of employment every year to tens of millions of rural poor. About 70 percent of works under the NREGA are "green jobs" such as water harvesting, afforestation and land development. Job schemes targeting the youth segment, which comprises over 50% of the total population, should also be emphasized.

Effective safety net programmestargeting the most vulnerable groups.

Policy options to improve governance, protect and enlarge fiscal space, mitigate the impact of the global economic crisis and prevent MDG reversals and ensure equitable growth.

Institutional arrangements for effective partnershipsthat may improve programme implementation.