Lao Eight Poverty Reduction Support

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The development objective of the Eighth Poverty Reduction Support Operation (PRSO 8) Program for Lao PDR is to support policies and institutional reforms that enable the sustainable management of increasing revenues from the natural resource sectors to deliver improved public services. This will enable the country to more effectively translate these revenues into better development outcomes and improved public service delivery. The five policy areas in the new PRSO directly support the strategic objectives of World Bank's new Country Partnership Strategy (CPS) of (i) improving competitiveness and connectivity, (ii) sustainable resource management, (iii) inclusive development, and the crosscutting theme of strategic public sector management. Additionally, this third PRSO series builds on lessons learned from the previous second PSRO series. To ensure impact and results from the previously supported reforms, the third PRSO series continues support in some policy areas while aiming to selectively open new fronts of support for reform to meet the country's development challenges that include diversified and inclusive growth. The preparation of the new PRSO series included extensive consultations with all stakeholders, and close cooperation with the European Commission (EC). This PRSO series arrives at a critical time as Lao PDR's economy benefits from abundant natural resources, which, if managed well, may put the country on a sustainable and inclusive medium-term growth path. Lao PDR's forests, agricultural land, water and mineral resources and hydropower potential account for more than half of the country's total wealth. With appropriate macroeconomic and governance policies, the country's natural resource wealth can contribute significantly towards rapid, sustainable growth and poverty reduction. Rapid expansion of the hydropower and mining sectors has benefited the country by contributing towards general economic growth, increasing fiscal revenues significantly, and reducing local poverty and improving infrastructure. It has also promoted change in environmental legislation.