Financing of IF Action Matrix:

1
Financing of IF Action Matrix

• Pooled funding and budget support in Lao PDR

2
Lao PDR Context

• The Ministry of Industry and Commerce, as the
  Integrated Framework Focal Point, has played a
  key and significant role in leading the IF
  process
• Australia has been the Integrated Framework Donor
  Facilitator for Lao PDR since 2004

3

• A Diagnostic Trade Integration Study (DTIS)
  action matrix was approved following a National
  Validation Workshop on 12 September 2006
• It identifies 5 priority areas for action by all
  development partners
• Trade Facilitation
• Export Competitiveness
• Business Environment
• Trade Policy, Trade Agreements and Global
  Opportunities
• Trade Opportunities for the Poor

4
Donor support for implementation

• the provision of a full-time IF Facilitator
  (international adviser) to support the MOIC,
• the establishment of a Multi-Donor Trust Fund
  the Trade Development Facility (TDF), and
• the establishment of a Trade and Private Sector
  Development sub-group to enhance cooperation and
  coordination between development partners.

5
The Trade Development Facility

• To support the NIFGS and implement the NIFGS
  initial activities facilitating trade and
  cross-border movement of goods and increasing the
  capacity of the Government to undertake specific
  tasks related to regional and global economic
  integration. These activities in turn support
  the GoLs larger aims of poverty reduction and
  economic development, as reflected in the NSEDP.

6

• A coordinated donor response to the DTIS and
  Action Matrix, articulating principals for a
  localised response through government systems in
  line with the localised Vientiane Declaration on
  Aid Effectiveness
• The TDF is jointly supported by Australia, the
  European Commission and the World Bank.
• It has committed funding of approx USD 6.82
  million over four years.
• The TDF commenced implementation in December
  2008.
• The TDF has 5 components, closely aligned to the
  DTIS Action Matrix priority areas

7
TDF Components

• Trade Facilitation
• Sanitary and Phyto-sanitary Standards (SPS) and
  Technical Barriers to Trade
• Export Competitiveness and Business Environment
• Capacity Building, Trade Policy, Trade
  Agreements, and Global Opportunities
• Strengthening of National Implementing Unit

8
TDF Institutional Management Arrangements

• TDF Steering Committee co-chaired by
  Vice-Minister MOIC and Donor Representative
• Administrator World Bank
• National Implementation Unit
• IFF Specialist / Trade Adviser
• Government Sub-Executing Agencies (GSEAs)
• IF Taskforces

9
Poverty Reduction Support Operation

• Budget support mechanism led by the World Bank
  and supported by Australia, the European
  Commission and Japan.
• Component 1 Investment Climate,
  Competitiveness, and Business Development
• Policy actions and triggers
• Trade facilitation master plan
• Investment Law (MPI)

10
Challenges

• Government limited capacity
• Donor co-ordination and competing interests
• Donor capacity to pool funds
• Slow progress
• Reluctance to come under trade umbrella