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LESSONS:

Lao People’s Democratic Republic: Vientiane Urban Infrastructure and Services Project [Loan 1834-LAO]

sector: Transport, Water and Other Urban Infrastructure and Services | country: Lao, People’s Democratic Republic

1. A deeper analysis would have enabled a better assessment of the timing, resource requirements, and political will for institutional and policy reform. Implementing urban institutional reform is complex. It has failed to achieve the desired outcomes in part due to deficiencies in upstream project preparation. Designers of the project must pay careful attention to the following aspects of urban institutional reform: (i) its acceptance by all key stakeholders through a participatory process; (ii) a thorough understanding of local politics; (iii) realistic phasing, sequencing, and timing of its institutional and policy reform; and (iv) an appropriate balance between allocated resources and expectations of the stakeholders involved. A more open-ended policy dialogue may also prove more helpful than the application of loan covenants. If substantial policy change is involved, it would also be prudent to consider this as either (i) separate and parallel policy work in support of the investment components; or (ii) a two-phase process, with policy development preceding the investments. [Main text, paras. 8,54,92]

2. Difficult decentralization reforms will benefit from a systematic sector-wide approach to change. While building toward common reform agenda goals, several ADB initiatives toward decentralized urban governance were not adequately linked. This long process would have benefited from a comprehensive reform framework based on institutional, political, and economic imperatives and a clear sector road map. Actions have to be based on solid analysis and engineered to fit into a road map prepared in consultation with stakeholders, for example, a realistic time frame within the context of a medium-term fiscal framework. [Main text, paras. 84,93]

3. A balanced approach to urban land use could potentially address some of the challenges of urbanization. A bottom-up approach to urban land use could help avoid a potential overload of infrastructure and service networks due to overcrowding, pollution, increased poverty, and environmental degradation. Building on the success of the village area improvement initiative, in particular (but also community participation initiatives in earlier ADB-supported urban projects), ADB’s support for community planning could complement and support higher level urban and regional plans. This would facilitate the involvement of underserved communities in determining their priorities. Such community planning may be acknowledged within the development planning and management system. [Main text, para. 94]

4. A demand-driven community approach facilitates better implementation. The village area improvement experience highlights the importance of proactive communities during the design, implementation, and maintenance of projects. The use of similar principles may be replicated or expanded for a larger set of beneficiaries. An important lesson from the village area improvement program is its use of a demand-driven approach to development instead of the top-down, supply-driven activities of the past. The main advantages of the village area improvement approach are community inputs and an applied gender-balance concept. These include (i) the participation of many parties, (ii) consultations, (iii) action at the grassroots level, and (iv) the solidarity of the village committee members. [Main text, paras. 70,79,95]

5. Clear horizontal and vertical roles for urban sector agencies are important under a multisector approach. A multisector approach in the urban sector is readily implementable in the Lao People s Democratic Republic, because, for the most part, subsectors are within the mandate of the ministry responsible for urban development and its provincial branches. The approach can be enhanced further with the inclusion of urban transport in urban projects. This would not be difficult, given the mandate of the Ministry/Department of Public Works and Transport (MPWT/DPWT). But a multisector approach may be truly tested only when more stakeholders are added to urban projects or programs, bringing in expertise from outside MPWT/DPWT. Moving forward, stronger links may have to be established between (i) infrastructure and services provision and job creation and economic development; and (ii) investments in wastewater treatment and other initiatives responsive to urban issues (e.g., vehicle emissions) that involve outside agencies. Limited experience in dealing with outside agencies suggests that an expanded multisector approach will be difficult to implement without clarifying roles and responsibilities across agencies, horizontally and vertically. [Main text, paras. 56,96; Appendix 6]

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