Round Table Meeting 2018: Opening Remarks by Valerie Cliff

Your Excellency, Mr. Somdy Douangdy, Deputy Prime Minister of Lao PDR,

Excellencies and Ambassadors,

Distinguished Guests, Ladies & Gentlemen.

A very good morning to you all. Sabaidee.

On behalf of UNDP it is my great honour to deliver this keynote address.

Let me first say that I am struck by the openness of this Round Table Meeting. I am certain that there are both tangible and intangible benefits that arise from consulting so constructively on the country’s national sustainable development priorities.

2018 has clearly been a landmark year for Lao PDR.

First, the country’s socio-economic progress over recent years resulted in the achievement of a significant and long cherished goal of the Government: In its triennial review of least developed countries, the United Nations Committee for Development Policy (CDP) found that Lao PDR fulfilled the criteria for graduation for the first time.  If Lao PDR meets the eligibility criteria for graduation during the next review in 2021, the CDP is likely to recommend graduation that will take effect three years later in 2024. Whilst there are still challenges ahead, this provides a strong signal that the country is on the right development pathway.  To sustain this development momentum, Lao PDR needs continued focus on structural transformation as targeted in the 8th NSEDP.

A second major milestone in 2018 was submission of Lao’s first SDG Voluntary National Review in July. That report shows the extent to which the 2030 Agenda for Sustainable Development and the Sustainable Development Goals have already been integrated into national development planning and monitoring processes.  

But 2018 has also been a challenging year. It provided an unfortunate and tragic reminder that Lao PDR remains vulnerable to extreme weather events. Widespread flooding in July and August inflicted damage and loss to every province and sector of the country. The cruel consequences of natural disasters repeatedly show that it is the poorest and most vulnerable members of communities that suffer the most. If we are sincere about the objective of ‘leaving no-one behind’ and ‘reaching the farthest first’, our approaches to risk assessment, preparedness, mitigation and recovery must be strengthened in those provinces and districts where vulnerabilities are greatest.

More broadly, across the Asia-Pacific region we are also witnessing a number of ‘mega-trends’, with more people moving from rural areas to cities, inequalities rising within and between countries, and Artificial Intelligence and automation beginning to transform work and societies. These are important considerations as Lao PDR begins to reflect on the goals, priorities and design of its 9th NSEDP.  Our collective challenge is to map and understand these trends, and their drivers, so that we are better prepared for the future and able to plan and capitalize on the opportunities they bring.

SDG Planning

In this light, I read with great interest the analysis and recommendations provided in the Mid – Term Review of the 8th NSEDP.  As the Government considers the remainder of the 8th NSEDP implementation period and begins a new planning cycle for the 9th NSEDP, I am heartened by its commitment to further align strategies and activities, including in support of LDC graduation, the 2030 Agenda, and green growth. I am also pleased with progress being made to integrate national development planning and budgeting processes, alongside greater budgetary transparency and accountability. Development partners assembled here today stand ready to continue to support with strategic, technical and policy assistance in these areas of public finance management.  

Governance

Turning to the Government’s GOVERNANCE AGENDA, there are a number of items in which progress is being made. The Government’s acceptance of 116 of the 196 recommendations contained within the Universal Periodic Review (UPR) is ensuring that gaps in various human rights instruments are being systematically addressed.  Efforts to deepen the process of decentralization continue to be encouraged with development partner assistance. The Government’s recent anti-corruption campaign is striving towards a new level of transparency, which is most welcome. As a cross-cutting issue central to the monitoring and reporting of all development progress, efforts made in 2018 to strengthen the quality of statistical data has also been well received among development partners.  The international community will also continue to work closely with the Government to seek to improve the operating environment for civil society organisations in recognition of their important and unique contribution to the development of the country.

Inequality

Another critical challenge in the coming period will be addressing the disparities and widening inequalities that are emerging in Lao PDR despite sustained high levels of economic growth.

This should feature as one of the Government’s highest priority goals as the country begins the process of formulating the 9th NSEDP.  It is a complex challenge that requires the implementation of economic and social policies that seek to engage and empower local communities in relevant decision-making and productive processes. An effective approach can be combining universal and targeted actions, but always ensuring the fulfilment of human rights and the protection of national traditions and culture.

Examples of universal policies include the nationwide achievement of health and education quality and access which are central components of the LDC human assets criteria. Targeted measures on the other hand are also necessary to reach out and engage remote communities and particular ethnic groups, helping to design and put in place specific actions to meet their individual needs.   

A robust discussion between the Government and development partners is needed to find ways to increase - not reduce – public investments in the health and education sectors. At present budgetary allocations in these transformative sectors stand below the regional average. While spending does not necessarily correlate directly with outcomes, Lao PDR lags considerably behind other ASEAN countries in important areas, including undernourishment, under 5 mortality and maternal mortality.

Macroeconomic Stability

The Mid – Term Review acknowledges that whilst many macroeconomic targets have been achieved, there are increasing risks and vulnerabilities associated with growing public debt, revenue shortfalls, the need to exercise closer oversight of the financial sector and the existence of low buffers to shocks.  Critical attention is particularly important in the coming period to manage public debt sustainably. Last year Lao PDR’s risk of external debt distress was reclassified by the IMF from moderate to high. The Government has since and will need to continue to put greater emphasis on prudent debt management, building fiscal buffers, strengthening the banking sector, implementing a comprehensive debt management strategy and on improving tax administration and collection.

Structural Transformation

Pursuit of a carefully thought out Structural Transformation Strategy would provide Lao PDR with a solid foundation from which to launch the next stage of its economic journey.  This is central to the vision of the 8th NSEDP and anchors the Government’s long-term sustainable growth strategy. Lao PDR has so far based its growth on natural resources – but this will not be sufficient over the long - term.  Diversification, differentiation and modernisation in carefully selected priority economic sectors, supported by increased investment in human assets and technologies will enable Lao PDR to carve out its niche and transform its development pathway. This is especially important in what is swiftly evolving into a highly competitive, dynamic and increasingly integrated ASEAN marketplace.  

At the same time infrastructure investments like the Lao-China Railway will surely strengthen local economic development and create job opportunities. They give clear examples of the pace of change and the opportunities presented by increased regional connectivity. But let us not forget the importance to complement these infrastructure developments with social investments for the most vulnerable populations.  As part of a joint partnership with ASEAN and the Government of China, UNDP is currently helping design an SDG localization project to enhance access and quality of basic services in some of the vulnerable areas where the railway track is being constructed. 

Protection of the environment and its natural resources will continue to be critical for Lao PDR’s future. We applaud it for being the first ASEAN country to ratify the Paris Agreement on Climate Change.  It has also recently taken steps to improve related legislative and regulatory frameworks, including land use and notably the Prime Minister’s Order on illegal logging.

Meanwhile, as mentioned before, the country continues to grapple in its preparedness for natural disasters. Lao PDR is situated in one of the world’s geographic hotspots for extreme weather events. For this reason, a strategic and co-ordinated institutional approach across all of Government towards full implementation of the Sendai Framework for Disaster Risk Reduction would be highly beneficial.

Finally, Technology and Innovation are vital partners in development—including to support each of the key dimensions I have highlighted here. I encourage Lao PDR science and technology leaders, including from the private sector and civil society, to engage in south-south initiatives as a means by which the 2030 Agenda for Sustainable Development can be accelerated, in particular in support of implementation of the programme of green growth. This will facilitate the exchange of information, learning and sharing lessons from and with external partners and adopting new technologies that support greater efficiency. Lao PDR can also launch its own research initiatives related to green growth, resilience to climate change and sustainable development.

In closing, let me congratulate you all once again for your longstanding partnership in national sustainable development.  I wish you well in your consultations today and each one of you success, good health and happiness.

Thank you.