OPENING REMARKS: Theme 4: Green Growth, Resilience, and Risk Management, Multi-Stakeholder Taskforce to study the impact of COVID-19 to support a Determination of the 9th NSEDP and SDG Localization in Lao PDR

Your Excellency Dr. Saynakhone Inthavong, Vice Minister of Natural Resources and Environment

Esteemed partners from line ministries and Government institutions,

Distinguished Ambassadors and development partner representatives,

Dear Colleagues,

Ladies & Gentlemen,

• It is an honour also for me to welcome you to this fifth and last in this series of thematic policy dialogues under the Multi-stakeholder Taskforce to examine the implications of COVID-19 for Lao PDR, in order to supporting a determination of the 9th NSEDP, and the achievement of the SDGs.
• Globally, the statistics on the impact of the pandemic seem to become more alarming every day. There have been over 29 million confirmed cases, and over 930,000 fatalities. 1.8 million of those cases were in the past week and nearly 40% of all the new cases were in South-East Asia.
• Measures taken to stop these statistics have preceded the steepest decline in economic output in our lifetimes. The latest figures issued by the ADB only two days ago show that developing countries in Asia as a whole are projected to go into recession for the first time in nearly sixty years.
• This initiative was brought about by the realisation that the recovery from COVID-19 is going to take years rather than months. So rather than pushing ahead with priorities that may not reflect the changed context, we need to adapt to new circumstances, and revise our plans for years to come.
• We need to look ahead and start building in necessary adaptations to our core planning structures and look for new business models that are green, sustainable and more resilient to future shocks.
• 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 is 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.

• I have emphasized in the inception meeting and each of the dialogues that our purpose here is not to duplicate the work of the NSEDP drafting process, nor the Sector Working Groups with their expertise and broad engagement in developing detailed plans and policies based on clearly defined targets, goals and indicators.
• It is to take a step back to look across key sectors, on the potential tradeoffs between sectors as well as where areas for synergy can be established, 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.
• 5 workstreams were identified through initial consultations:
  1. The Macro-Fiscal Framework and Financing for Sustainable Development, on which we had our first Thematic Policy Dialogue last week, co-chaired by Vice Minister of Finance, His Excellency, Dr. Bounleua;
  2. Trade and private sector, value chains and tourism, also discussed last week, co-chaired by the President of the Lao National Chamber of Commerce and Industry, Mr. Oudet Souvannavong;
  3. Human capital, including health and education which we discussed on Tuesday, co-chaired by Director General Phonevanh Outhavong of the Ministry of Planning and Investment;
  4. Managing changes and enhancing policy preparedness for decent work which we discussed on Wednesday, co-chaired by Vice Minister of Labour and Social Welfare, Her Excellency Baykham Khattiya; and
  5. Green growth, resilience and risk management - which we will discuss today.

1. During the first policy dialogue on the macroeconomic situation, we addressed many of the big-picture challenges Lao PDR will need to overcome in the post-COVID environment.

• This included discussing central questions about what the main drivers of economic development can be, as the financial and environmental limits of major sources of growth up to now - including heavy investments in mining and hydropower - may have already been reached.
• What was already a challenging financial situation has been further undermined by COVID-19. It will force tough decisions about spending priorities and impose an even harder constraint on investment options.
• The reality we need to recognise is that there simply will not be the same volume of resources available to pursue our development priorities - whether from the government budget, international support, or private investment.

2. In the second dialogue, on trade and value chains, we reflected on what it will take to live up to the commitment of the 2030 Agenda and deliver sustainable and inclusive development that leaves no one behind. We agreed that we need to find new ways of supporting economic development that reach those in the informal sector and Small- and Medium-sized Enterprises (SMEs) from which most Laotians earn their livelihoods.

• The major investments in roads and railways will connect Lao PDR better to its neighbours and beyond, as part of the longstanding vision of transitioning from a ‘landlocked‘ to a ‘land-linked’ country, and it offers the potential to use greater regional integration to drive growth and progress.
• But COVID-19 has delivered a disastrous shock to the regional trade and investment patterns, forcing policy makers to reconsider what is possible over the coming years.

3. One key prerequisite for an inclusive and sustainable development trajectory was discussed at our third dialogue - investment in human assets and in ensuring the right kind of human capital.

• We agreed that the case to protect investments in health and education was self-evident, in particular as Lao PDR enters a crucial period of demographic change. Over the coming years, the size of the prime working age population relative to overall population will peak - offering the opportunity to leap ahead in terms of development if we can ensure that those entering the workforce have enough productive opportunities and the capabilities to seize them.

4. Our fourth dialogue, on enhancing policy preparedness and skills development in response to the needs of social and economic development further explored what it will take to respond to labour market and migration challenges in the post-COVID environment.

• COVID-19 has led to major changes in both the domestic and regional labour market conditions. We have seen many industries disrupted, and in the case of tourism a whole sector almost shut down. With the closure of regional borders, thousands of workers have returned from regional markets, often to rural parts of Laos, and now face uncertain employment prospects.
• To tackle these challenges, we stressed the need for more integrated and coherent policy making, sharing information and working together across ministries and sectors to address both the demand and the supply side of the challenges.

5. In the discussion this morning, on green growth, resilience and risk management we hope to carry the conversations forward, but also introduce new strategic considerations.

• COVID-19 is an unprecedented shock to development at a global scale. But in working to overcome the challenges that it has brought about, there is also opportunity. An opportunity to learn lessons about how our risk management and preparedness structures and systems can be strengthened and the criticality in building local capacity and resilience.
• Concentrations of greenhouse gases in the Earth’s atmosphere hit a record high in 2020, as the economic slowdown amid the COVID-19 pandemic had little lasting effect. The sharp, but short, dip earlier this year represented only a blip in the build-up of climate-warming carbon dioxide, now at its highest level in 3 million years.

• Last week, the UN Secretary-General urged countries to use the recovery from COVID-19 to tackle climate change - saying “We have a choice: business as usual, leading to further calamity; or we can use the recovery from COVID-19 to provide a real opportunity to put the world on a sustainable path.”
• The Lao PDR COVID-19 recovery, embedded within the 9th NSEDP, could be an opportunity to tackle two crisis and shift the development trajectory towards a greener, more sustainable and inclusive economy.
• Lao PDR has long recognised the importance of increasing the sustainability of development - indeed that is one of the core priorities of the 9th NSEDP. So, one crucial question that I hope we can address today is how we can reflect - and prioritize - efforts to shift to greener growth models, whilst simultaneously enabling communities to better prepare for the impacts of climate change in the post-COVID context.
• We are consciously a smaller group, with participation from across sectors, in order to facilitate a new and open discussion. With this dialogue, we hope for a genuine conversation that builds on all the analytical work that has already been done.
• We are fully aware that none of the questions that we are asking through this dialogue series have easy answers. But we have seen through the discussions that creating the space to have a sincere conversation, 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 9th NSEDP.
• As the penholder of the NSEDP drafting, we are joined throughout this series of policy dialogues by colleagues from MPI, and we are in regular contact with Vice-Minister Kikeo, who is keeping a close eye at the outcomes of our discussion.
• In all of these dialogues, I emphasize that we do not need to agree on every point discussed, but we now have a precious opportunity to engage in a discussion that will inform decisions with consequences for years to come.
• Tuk-tuk khon, hedt viek, kiang bah, kiang lai.

Thank you very much.