Fact Sheet: Asian Development Bank and Lao PDR

VIENTIANE, March 28 (Xinhua) -- The Lao People's Democratic Republic (Lao PDR) will be hosting the 3rd summit meeting of the Greater Mekong Subregion (GMS) on March 30-31.

The 3rd GMS Summit aims to sustain and deepen economic cooperation and integration efforts among the GMS countries in order to better meet development challenges and realize the common vision of an integrated, harmonious and prosperous subregion.

Poverty reduction remains the most urgent development challenge for the Lao PDR. While the country is on track to meet its commitment to raise incomes in line with the United Nations Millennium Development Goals (MDGs), efforts need to be accelerated to meet non-income components of the internationally agreed targets.

To aid poverty reduction and achieve other MDG targets, the Lao Government endorsed the National Growth and Poverty Eradication Strategy (NGPES) in June 2004, which identified 47 priority districts and four priority sectors -- transport, agriculture, health, and education.

In order to have one development plan for the country, meanwhile, the NGPES has been integrated in the Sixth Socio-Economic Development Plan (SEDP) for 20062010. The SEDP targets Lao PDR's graduation from least-developed country status by 2020 and emphasizes agricultural commercialization, hydropower development, mining sector development, improved education and health care and regional integration with ASEAN and Lao PDR's fellow members of the Greater Mekong Subregion (GMS).

It aims to grow the economy 7.5 8 percent annually; reach 700750 U.S. dollars gross domestic product per capita; create about 652,000 productive jobs; and reduce the number of poor households to 15 percent.

The Asian Development Bank (ADB) has extended development assistance to the Lao PDR since 1968 as the country is one of 31 founding members of ADB in 1966.

ADB is a multilateral development bank owned by 67 members, 48 from the region and 19 from other parts of the world. ADB's main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ADB's annual lending volume is typically about 6 billion U.S. dollars, with technical assistance usually totaling about 180 million U.S. dollars a year.

The ADB continues to remain the largest multilateral financier to the Lao PDR, and has been a leading development partner in many sectors of the economy since the late 1980s. By end-December 2006,ADB had approved almost 1.22 billion U.S. dollars in loans and technical assistance projects amounting to 108.84 million U.S. dollars, according to ADB Fact Sheet 2007.

In the 1970s and 1980s, assistance was focused mainly on projects involving infrastructure development in the transport and energy sectors, as well as agriculture. ADB has been active in the development of the financial sector since the latter part of the 1980s, and broadened its assistance in the 1990s to include rural development, social development and environment. ADB has focused its activities on poverty reduction since the late 1990s.

ADB's operations in the Lao PDR were guided by a Country Operational Strategy (COS) until a Country Strategy and Program (CSP) 20022006, which was prepared in consultation with government, non-governmental organizations, civil society groups, the private sector, and other development agencies. The current CSP covers the period 20072011.

The Lao PDR, small and landlocked, has benefited most from the GMS program and, as the only member bordering all the other member countries, is crucial to it. And ADB aims to maximize the benefits to the Lao PDR of the subregional cooperation.

Major development challenges facing the Lao PDR include meeting the non-income MDGs as scheduled; containing the persisting fiscal deficits through the ongoing fiscal reform, including improved revenue collection and public expenditure management; achieving debt sustainability through prudent borrowing plans, as well as better fiscal and external positions; enhancing governance and institutional capacity; creating a conducive environment for the business sector; and enhancing the competitiveness of the Lao PDR's niche products.