Lao PDR has experienced rapid economic growth in recent years, averaging 7.9% GDP growth during its 7th Five-Year National Social Economic Development Plan (NSEDP) 2011-2015. By 2015, Lao PDR’ poverty rate was reduced to 19.7%, its human development index increased, and its labor structure improved with increased percentage of labor employed in industry and service sectors. However, these national gains are tempered when compared against regional peers, as Lao PDR has been less successful in translating growth into job creation and poverty reduction.

These growth outcomes, and the impact they have had on Lao PDR’ environment, are due to several overarching trends and challenges, including a two-fold increase in urban population in less than two decades, minimal institutional coordination, lack of financial resources and financial planning capacity for sustainable development, and lack of effective regulations on natural resource use, combined with a weak tax structure on environmentally harmful production and consumption.

Nevertheless, the Government of Lao PDR (GoL) is committed to graduating the country out of the LDC group by 2020, and doing so with a greater emphasis on the quality of growth. The Lao PDR Vision to 2030 and its 10-year Strategy (20162025), as well as the five-year 8th NSEDP 2016-2020, all clearly identified policy priorities on LDC graduation, increased human capacity, regional and international integration, and sustainable development. The three policy documents focus on green growth and its contribution to long-term social economic development goals. To this end, Lao PDR has identified the need to develop a National Green Growth Strategy (NGGS), which will provide policy direction on the mainstreaming of green growth into national, sub-national, and sector strategies and policies.

Though the project will be GGGI’s first in Lao PDR, the Institute was actively preparing in 2015-16 by conducting three scoping and validation missions to engage in bilateral consultations with both government representatives and in-country development partners. GGGI also welcomed a Lao PDR delegation of representatives from key government ministries in Seoul to learn lessons and experience from the Republic of Korea (RoK) and GGGI in promoting green growth, as well as to discuss GGGI technical assistance in identifying green growth opportunities and developing the NGGS.

Integrating and achieving green growth results across Lao PDR’s development initiatives will require comprehensive planning at all levels, and effective financial and institutional frameworks that have the capacity to implement actions on the ground.

PROJECT OUTPUTS FOR 2017-18:

• Conduct an assessment of the potential for green growth in Lao PDR and submit to government
• Guide government in its development a National Green Growth Strategy to be submitted to cabinet
• Develop recommendations on integrating green growth into the National Urban Development Strategy and deliver a green urban development pilot project in Vientiane
• Deliver 3 capacity building initiatives in relation to green urban development and green fiscal instruments

PROJECT OUTCOMES FOR 2017-18:

• Government adopts National Green Growth Strategy for implementation
• Government integrates green growth and lessons from green urban development pilot into the National Urban Development Strategy

The overall outcome of the project is to support Lao PDR in mainstreaming green growth into its development by identifying potential green growth opportunities and assisting in the development of multi-level and sectoral green growth strategies and action plans. This will be done by delivering the following outputs:

Assessment of the potential for green growth in Lao PDR conducted and submitted to government. Based on scoping work and consultation with government stakeholders, it was identified that a quality understanding of Lao PDR’ green growth potential was first needed to support long-term strategic planning. GGGI will, therefore, conduct a Green Growth Potential Assessment (GGPA) to define and articulate a green growth model that best suits Lao PDR’ national circumstances. The findings of the GGPA will form the basis of Lao PDR’s NGGS.

National Green Growth Strategy submitted to cabinet. Based on the needs and priorities identified through the GGPA exercise, GGGI will provide technical assistance to national experts from MPI, NERI, and key line ministries to draft the NGGS, with support from the World Bank. GGGI will interpret the results of the GGPA and incorporate them into the NGGS, and identify entry points for further green growth mainstreaming into selected planning tools.

Recommendations developed on integrating green growth into the National Urban Development Strategy and deliver a green urban development pilot project in Vientiane. Based on the priority to accelerate urban green growth development, the GoL has requested GGGI support for green city planning at the national and urban levels. GGGI will integrate the concept of green city and relevant sector GGPA findings into the NUDP. To strengthen the NUDP, GGGI will incorporate urban green growth elements that emphasize climate resilient city development. GGGI will build on this exercise to conduct a pilot of green city development in the Vientiane Capital with specific consideration for impacts on vulnerable communities.

Three capacity building initiatives in relation to green urban development and green fiscal instruments delivered. Based on the need to build green growth capabilities in Lao PDR, GGGI will integrate capacity development and knowledge sharing in all its activities in Lao PDR. Drawing on GGGI’s other in-country experiences, the Institute will facilitate expert and peer-to-peer learning through the sharing of international best practices on green mainstreaming in urban development and fiscal mechanisms, workshops and twinning schemes, while engaging regional peers to discuss strategy formulation and implementation, and innovate on-the-job training with thematic experts.