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LESSONS:

Lao People’s Democratic Republic: Environment and Social Program [Loan 1867-LAO]

sector: Energy, Transport | country: Lao, People’s Democratic Republic

Program design encompassing a good technical analytical basis was useful. The technical analytical basis for the formulation of the program was very sound. There were a large number of detailed studies and reports financed by ADB, the government, and other donors that the program could build on. This was particularly true in terms of environment-related information, data base and analytical work. Complex programs should be preceded by good analytical work in order to inform the program design, particularly the conditions to be included in the policy matrix.

Adequate donor coordination was important to implement a complex crosscutting program in a small country with many donor agencies. Donor coordination in the formulation and implementation of the program was adequate. The design of the World Bank’s Lao Environment and Social Project project was well-synchronized with the Environment and Social Program. The phasing-out of Sida assistance appears to have been well-timed with the phasing-in of development assistance from the Finnish Government. Donor coordination is important to ensure synchronization of activities and avoid duplication of effort.

Considering the full range of opportunities for enhancing the human resource base would produce a more sustainable outcome. Weak human resource base in Lao PDR is a risk to the implementation of the program. These weaknesses remain with no immediate or short-term solution. The full range of opportunities for enhancing the country’s human resource base should be fostered, including employee training, career development, performance management and development, coaching, mentoring, succession planning, key employee identification, tuition assistance, and organization development. To make program implementation more effective program design should take into account this full range of opportunities.

Capacity development is a long-term process encompassing multiple levels and institutional aspects. Poor institutional capacity in Lao PDR is another risk to the implementation of the program. Capacity development refers to many aspects other than training or skills improvement and is a long-term process, in which all stakeholders should participate. It is also important that such training address the needs of the local population and various ethnic groups’ with respect to key development areas such as hydropower development, water resource allocation, road transport, and mining sectors. In countries with capacity development constraints, program design should take a broad approach to capacity development encompassing multiple levels and institutional aspects.

Need for better stakeholder analysis and involvement for complex programs. The program could have provided a better stakeholder analysis of the central government agencies and their evolving roles in the management of environmental and social safeguards. It omitted analysis of the mandate and remit of the Ministry of Finance and the key role that it would need to play in establishing sustainable financing mechanisms, including on the revenue collection aspects. The program should have flagged this as a substantial risk.

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