Overall comments

Laos 19The Delegation of the European Union, EU Member State Embassies and Switzerland thank the Ministry of Planning and Investment for the opportunity to comment on the draft of the 8th Five Year National Socio-Economic Development Plan (NSEDP) for the period 2016- 2020.

 We commend the Government for the detailed, outcome orientated and well-structured plan which covers all relevant sectors.

More technical comments on specific sectors will be shared bilaterally and through the Sector Working Groups (SWGs). We encourage the Government to use the SWGs to improve sector coordination and to address specific sectoral challenges, including discussions of targets and indicators.

Our key comments are as follows:

Overall comments

The draft 8th NSEDP contains numerous outputs. In order to increase the likelihood of achieving the outputs and of securing the funding to achieve them, it would be very useful to select, group and signal those of priority. Some of the targets set are highly relevant for the plan’s overall goal but seem difficult to achieve. We recommend a pragmatic reflection on what is desirable, and what is achievable.

None of the sections of the NSEDP include financial plans. Without costing the NSEDP, it is difficult for us to comment on whether the identified targets are likely to be met and whether the plan is affordable. The issue of ownership deserves more attention. Increased and transparent contributions by the Government will help development partners to assess if specific sectors can be supported. The fact that the Government  plans  to  contribute  only  9-11%  of  the  development  fund  for  the achievement of  the  8th  NSEDP  raises  questions on  the  planning process and  its viability.

We regret that the NSEDP foresees that the Government will focus its resources on “securing growth” while the role of development partners is seen as only “financing poverty reduction and social sectors”. This position is clearly reflected in the insufficient budget allocation to rural development and poverty eradication (the goal under the 7th  NSEDP was significantly higher than the actual budget allocated for development and poverty eradication). We do not agree with this division of labour.

We are not able to comprehensively understand the achievements made under the 7th NSEDP without information on the budget allocated and the expenditure.

 We understand that the Government intends to shorten the long description on the 7th NSEDP Achievements and Challenges. When doing so, we recommend keeping the more analytical sections where the reasons for the achievements and shortcomings are explained in some detail, such as has been done under paragraphs 322 and 323. These paragraphs include an emphasis on the importance of proper planning, budgeting, effective management and fiscal discipline, which are key issues that will need to be addressed  to  achieve  the  8th   NSEDP.  We  recommend the  identified  challenges, reasons for underperformance and lessons learnt to be reflected in the targets of the new plan.

We note with approval that M&E is addressed and that the need to increase the capacity of the agencies which have a role in sector level NSEDP monitoring and evaluation is mentioned. However, it would be useful to have more details on how data availability and data accuracy will be improved. Gender disaggregated targets should be included. On a similar note, the logical framework (Annex 1) is missing information on data sources, a shortcoming that was also highlighted by the IMF and requires urgent attention. We are ready to support the Government with the logical framework (selection of indicators, targets) as required. We suggest using the annual Round Table Meeting (RTM) in the future as a venue to monitor the 8th NSEDP based on the M&E framework that is proposed in the draft. The SWGs could prepare this throughout the year by following the indicators that are relevant to their sectors.

Some of the data in the document, such as that on poverty rates or natural resources, appears to be inconsistent within the document and with the facts and information we have gathered and should be revised.

We welcome the reference to democracy and to a few specific rights (such as rights of children) but we regret the absence of any references to human rights in general. This is especially significant as Lao PDR is already a party to several human rights conventions, is currently undergoing its second Universal Periodic Review, and is a candidate for the UN Human Rights Council for the period 2016-18. We would like to reiterate our earlier comment of June 2014 with regard to the fact that references to the respect  for  human  rights  should  also  be  included  in  the  8th  NSEDP.  We  avail ourselves of this opportunity to call on the Government to respond in a meaningful manner to the Universal Periodic Review recommendations given in January 2015.

We stress the need for genuine civil society involvement in the realisation of the NSEDP if outputs or targets are to be met. A significant part of our development funds is allocated for implementation by civil society organisations.

The draft of the 8th  NSEDP does not include any anti-corruption targets (except for periodic review of implementation of laws and regulations in general). The report of the 7th NSEDP does not include information of any measures taken to combat corruption even though it was included in its targets. A legal basis for anti-corruption measures should be created and made accessible for development partners.

While we support the focus of the NSEDP on  graduation from Least Developed Country  (LDC)  status,  we  stress  that  this  transition  goes  beyond  economic performance and also includes governance, rule of law and social inclusion on which there is less emphasis in the document (particularly in the implementation section and in the logframe).

There is no reference in the NSEDP to cooperation with Lower Mekong Countries in the context of the 1995 Mekong Agreement and through the Mekong River Commission (MRC). We stress the importance of including cooperation with the MRC member countries in relation to the development of sustainable hydropower in Lao PDR. We recommend including the Mekong Agreement in the implementing policies and legal instruments under the regional integration section (in relation to hydropower).

References to the post-2015 agenda are positive, though there could be more emphasis on the fact that the Sustainable Development Goals and Targets to be adopted at the UN in September 2015 will drive development policies for the next 15 years.

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