OPENING REMARKS: Theme 2: Trade, Private Sector, Value Chains, and Tourism, Multi-Stakeholder Taskforce to study the impact of COVID-19 to support a Determination of the 9th NSEDP and SDG Localization in Lao PDR

Mr. Oudet Souvannavong, President, Lao National Chamber of Commerce and Industry (LNCCI)

Esteemed partners from line ministries and Government agencies,

Distinguished Ambassadors and development partner representatives,

Dear Colleagues,

Ladies & Gentlemen,

• It is an honour for me to welcome you to this second thematic policy dialogue under the Multi-stakeholder Taskforce to examine the implications of COVID-19 for Lao PDR, with a view to supporting a determination of the 9th NSEDP, and the achievement of the SDGs.
• As we can all see, it is becoming clear that many of the consequences of the COVID-19 pandemic will continue to play out over years rather than months. There will be no quick return to the situation before the crisis, where we could continue as if nothing happened.
• Rather, as in every corner of the world, we will need to adjust our expectations to the new circumstances and find ways to maintain progress towards our development goals, in spite of it.
• We can see how the pandemic threatens progress toward the SDGs at a global level. For the first time on record, progress in the Human Development Index which tracks progress on health, education, and living standards in countries across the world, has gone into reverse.
• Lao PDR was part-way through the development of the 9th NSEDP when the scale of the implications of COVID-19 became clear. In response, MPI took the step to request the support of a Taskforce to provide advice on necessary adjustments to plans whilst they are still being developed.
• This Taskforce has been convened in response to that request, and as you have seen in the ToRs, we are charged with:

1. Working to identify a set of core assumptions about how the development context for Lao PDR will change over the coming 5 years - what we can expect, and therefore what needs to be planned for; and
2. Developing a clear set of strategic policy recommendations for consideration by the relevant Ministries and Sector Working Groups in the development of the NSEDP.

• As I mentioned at the Taskforce inception meeting and will re-emphasize in each of the thematic policy dialogues, our purpose here is not to duplicate the work of the NSEDP drafting process, or the Sector Working Groups in developing detailed plans, policies, and targets.
• Rather, it is to take a step back to look across key sectors and ask critical questions about what the implications of COVID-19 are, and against these changing parameters, discuss and agree on the key strategic direction that can help institutions determine how policies and priorities will now need to be adapted, across sectors in a coherent way.
• So, in light of initial consultations, we landed on the 5 workstreams that you will find in the ToRs:

1. The Macro-Fiscal Framework and Financing for Sustainable Development, on which we had our first Thematic Policy Dialogue on Tuesday this week, co-chaired by Vice Minister of Finance, His Excellency, Dr. Bounleua Sinxayvoravong;
2. This theme on Trade and private sector, value chains and tourism;
3. Green growth, resilience and risk management;
4. Managing changes and enhancing policy preparedness for decent work reflecting changes in the labour market and migration; and
5. Human capital, including health and education.

• During that first policy dialogue, we had a frank discussion about some of the challenges Lao PDR will need to overcome during the coming years, in the post-COVID environment, to continue progressing towards the achievement of our development goals. This included addressing some pivotal questions about what the main drivers of economic development will be - recognising that the limits of capacity to borrow to fund heavy investments in infrastructure, mining and hydropower have already been reached.
• We also discussed how the growth model used up until today has not been sufficiently inclusive. The reliance on large-scale investments that create too few jobs and have too few linkages to the broader economy, has not delivered enough benefits for a larger part of the population.
• So, to genuinely live up to the commitment of the 2030 Agenda for Sustainable Development that leaves no one behind, we need to find new ways of supporting economic development that reach the informal sector and Small- and Medium-sized Enterprises (SMEs) from which most Laotians earn their livelihoods. We need to look towards new opportunities.
• To this end, many of the newer investments, in the roads and railways that will better hardwire Lao PDR and connect it into the regional economy will lay the foundations for future drivers of growth, as part of the transition from landlocked to ‘land-linked’.
• This hard infrastructure investment in connectivity is a promising start, but it is clear that it is not enough for Laos to become a real player in trans-national value chains and take advantage of the opportunities that lay ahead. Many other elements need to be put in place, and COVID-19 has made many of these additional requirements both more challenging to achieve and more urgent to address.
• We have seen how trade has been disrupted both globally, and closer to home. We see how many businesses are struggling with the consequences of the pandemic and have had to make hard choices, release employees and close shop. Many have lost their jobs, or seen their incomes fall.
• Designing policies that will foster inclusive private sector development and take advantage of the benefits of greater regional integration, despite the impact of COVID-19, is crucial to realize the ambitions set out for the 9th NSEDP. Such policies would also support the building blocks that can underpin a macroeconomic stabilization, building the tax base that in turn can support future social expenditure. This approach further underscores the motto shared by Vice-Minister Bounleua at the Macro-Fiscal Policy Dialogue of ‘No Revenue, No Spending!’
• In today’s policy dialogue, we hope to carry the elements of that conversation forward, start to drill down into, exactly what the pandemic means for our efforts to support greater private sector development, and foster greater trade with the region and more broadly. And then to reflect on what that means for the 9th NSEDP - both for the assumptions behind it, and the plans within it on how to realize these ambitions.
• You have all been invited here today because of your specific expertise and roles in designing policy responses to help cope with challenges such as these. With this dialogue, we hope for a genuine conversation that builds on all the analytical work that has already been done.
• We do not expect easy answers to any of the questions that we are asking through this dialogue series. What we hope however, is for an open conversation, that can help us move towards a shared understanding of the key issues, and the direction of sensible responses that could help guide the prioritisation process in the finalisation of the NSEDP.
• As the penholder of the NSEDP drafting, we are joined by a strong team from MPI, and I know Vice-Minister Kikeo, who unfortunately could not be with us himself today, will be looking closely at the outcome of our discussion.
• We are counting on you for your active, candid participation to make this work. In all of these dialogues, I emphasize that we do not need to agree on every point discussed, but we cannot afford to miss the opportunity we now have to engage in a discussion that will inform decisions with development consequences for years to come.
• With this, I thank you all again for taking the time to be here today, and I look forward to a fruitful discussion over the coming hours, as well as during the additional three policy dialogues in the days to come, that can genuinely be useful to the government as it builds a national plan under immense uncertainty and with mounting challenges, that can truly deliver progress for all Laotians.
• Tuk-tuk khon, hedt viek, kiang bah, kiang lai.
• Thank you very much.