Thailand
Laos Receives More Funding for Business and Trade to Assist in Covid-19 Recovery
The World Bank and the Government of Laos have agreed to scale up a Competitiveness and Trade Project that will assist businesses in Covid-19 recovery.
The additional financing will provide a USD 6.5 million grant through the Lao Competitiveness and Trade Multi-Donor Trust Fund supported by Australia, Ireland, and the United States.
The extra funding follows a request by the Ministry of Industry and Commerce for additional resources to help the government and private sector respond to the challenges posed by Covid-19 and related restrictions.
The Lao economy, which had already been slowing since 2018 following floods, drought, and crop disease outbreaks, has been hit badly by the pandemic since early 2020, causing poverty to rise by an estimated 4.4 percentage points.
This additional financing complements the government’s approach of providing rapid and direct relief to vulnerable firms and to adjusting government services to the effects of Covid-19.
Helping viable businesses to survive and grow will help them maintain and create jobs, thereby driving economic recovery.
The ministry has been implementing the original Lao PDR Competitiveness and Trade Project since late 2018 with USD 13 million of credit and grants from the World Bank and the trust fund. The project works to improve the processes required to start and operate a business and to reduce the costs of doing business in Laos.
Measures to lower trade costs and facilitate trade flows include streamlining regulations to reduce the time that goods spend at borders.
Business Assistance Facility grants are available to help companies improve their competitiveness, while the project also supports improved policy-making and transparency, along with stronger public-private policy dialogue.
“The new financing will be used to scale up and extend activities under the original project, such as decreasing the time required for goods to clear customs and increasing the ability of our producers to connect to markets. Additional resources will be used to help new Lao firms set up, and aid existing companies seeking grants to mitigate the impact of Covid-19,” said Deputy Minister of Industry and Commerce, Mr. Somchith Inthamith,
Meanwhile, Ms. Mariam Sherman, Country Director for the World Bank in Myanmar, Cambodia, and Laos, said that over a year into the Covid-19 pandemic, the country has faced significant economic stress, especially considering the effects of the crisis on important trade partners.
“This project has been prepared with urgency”, she said. “It can help the Lao government accelerate policy changes and regulatory reforms that will improve the ease of doing business, facilitate trade, and support company competitiveness. Such reforms will help Lao firms weather shocks, increase their ability to do business on the ground, and provide access to international markets for necessary inputs and outputs”.
The Lao Competitiveness and Trade Multi-Donor Trust Fund is a continuing effort to improve the efficiency of development assistance for trade in the Lao PDR, by pooling resources from the World Bank, Australia, and Ireland for increased efficiency of implementation, reduced transactions costs, and greater impact on-the-ground.
Since the start of the Covid-19 pandemic, the World Bank Group has committed over USD 125 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump-start a climate-friendly recovery.
The Bank is also providing USD 12 billion to help low- and middle-income countries purchase and distribute Covid-19 vaccines, tests, and treatments.
Source: https://laotiantimes.com/2021/10/20/laos-receives-more-funding-for-business-and-trade-to-assist-in-pandemic-recovery/