Regions and Countries

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p. 6 of 7 BACK | NEXT Executive Summary I. Development Agenda II. ADB's Development Experience III. ADB's Strategy IV. Operational Approach V. Three-Year Assistance Program VI. Performance Monitoring and Evaluation

Country Strategy and Program 2002-2004: Lao People’s Democratic Republic

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V. Three-year Assistance Program

A. Funding Level and Performance

82. The CSP proposes three lending scenarios for the 2002–2004 assistance plan, based on the triggers of macroeconomic management, structural reform, cross-cutting issues, and portfolio performance. The current lending scenario is a base case. Notwithstanding recent macroeconomic stability, economic growth, poverty reduction, and social development, the Government must further emphasize sustainable economic growth, human resource development, sustainable environment management, and private sector development. The objective of the CSP is to help the Government do so for the next five years. The lending scenario will be reviewed annually based on performance monitoring and evaluation (para. 87 for performance indicators).

83. Subject to the ongoing process of performance-based allocation, a tentative indicative planning figure (IPF) of $45 million–55 million per year on average for lending, with provision of additional IPF for subregional projects, is used to develop the 2002-2004 assistance plan as a base case scenario. The high case scenario is about 20 percent higher than the base case, and the low case about 20 percent lower.

B. Loan and Technical Assistance Program

84. The base case lending program for the Lao PDR during 2002–2004 will comprise about 10 national projects amounting to $150 million (average $45 million/year) and 3 subregional projects amounting to $50 million (average $16 million/year). During the program period, the share of core poverty or poverty intervention projects by number is about 55 percent of the lending program, including subregional projects. In terms of thematic priority classification, 39 percent of projects by number have environmental protection as an objective; 23 percent each, economic growth and regional cooperation; and 8 percent each, private sector development and gender and development. Agriculture and rural development by number of projects account for 39 percent, physical infrastructure for 31 percent, social sector for 23 percent, and finance and industry for 8 percent. The TA program, at about $5 million annually, focuses on capacity building and governance, policy support, and quality project preparation (the proposed program for lending and TA is in Appendix 5).

C. Economic and Sector Work Program

85. A number of ESW initiatives will be prepared during the program period of 2002–2004. The proposed ESW pipeline is in Appendix 6. EWS initiatives include the following:

1. studies directly linked to Government poverty reduction strategies and improved public service delivery, including (a) a poverty reduction monitoring and evaluation study, (b) institutional strengthening and reform needed to implement decentralization, (c) analysis of options for community development funds, and (d) a northern region development plan;
2. northern social and environmental assessment and capacity building for gender mainstreaming at local levels; and
3. support for private sector development and economic integration, including work on (a) private sector assessment and analysis of SME development, (b) financial sector strategy, (c) rural finance strategy, (d) analysis of the country’s
4. competitiveness, and (e) analysis of policy and institutional constraints to private investment in the power sector.

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