The World Bank and the government of Lao PDR have agreed to scale up a project on competitiveness and trade that will improve the ability of businesses to recover from the economic effects of COVID-19 as part of the government’s emergency response to the pandemic. The additional funding will provide a grant of $ 6.5 million Laos Multi-Donor Competitiveness and Trade Trust Fund, supported by Australia, Ireland and the United States.
The additional funding follows a request from the Ministry of Industry and Trade for additional resources to help government and the private sector address challenges posed by COVID-19 and related restrictions. The Lao economy, which had already slowed since 2018 following floods, droughts and crop disease outbreaks, has been hit hard by the pandemic since early 2020, leading to increased poverty in about 4.4 percentage points.
This additional funding complements the government’s approach of providing rapid and direct relief to vulnerable businesses and tailoring government services to the effects of COVID-19. Helping viable businesses survive and grow will help them maintain and create jobs, thereby promoting economic recovery.
The ministry has been implementing the original Lao PDR competitiveness and trade project since the end of 2018 with $ 13 million in credit and grants from the World Bank and the trust fund. The project aims to improve the processes required to start and operate a business, and reduce the costs of doing business in Laos. Measures to reduce trade costs and facilitate trade flows include streamlining regulations to reduce the time goods pass through borders. Grants from the Business Support Facility are available to help businesses improve their competitiveness, while the project also supports improved policy-making and transparency, as well as more public-private policy dialogue. strong.
According to HE Somchith Inthamith, Deputy Minister of Industry and Trade, “the new funding will be used to intensify and expand activities under the original project, such as reducing the time it takes to clear goods and increasing the ability of our producers to connect to markets. Additional resources will be used to help new Laotian businesses set up and help existing businesses seeking grants to mitigate the impact of COVID-19 â.
Mariam Sherman, Country Director of the World Bank in Myanmar, Cambodia and Laos, said that more than a year after the start of the COVID-19 pandemic, the country has faced significant economic stress, especially given the effects of the crisis on important trading partners. “This project was prepared in a hurry, âshe said. âThis can help the Lao government to accelerate policy changes and regulatory reforms that will improve the ease of doing business, facilitate trade and support the competitiveness of enterprises. Such reforms will help Laotian companies to weather shocks, increase their ability to do business on the ground, and provide access to international markets for needed inputs and products..
The Laos Multi-Donor Competitiveness and Trade Trust Fund is an ongoing effort to improve the effectiveness of development assistance for trade in Lao PDR, by pooling resources from the World Bank, Australia and Ireland for more efficient implementation, lower transaction costs and greater impact on the ground.
Since the start of the COVID-19 pandemic, the World Bank Group has committed over $ 125 billion to combat the health, economic and social impacts of the pandemic, the fastest and most important crisis response in its history. Funding helps more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and launch a climate-friendly recovery. The Bank is also provide $ 12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests and treatment.