Lao Sixth Poverty Reduction Support

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The Sixth Poverty Reduction Support Operation Program (PRSO-6) for Lao PDR aims to support the Government's priorities as outlined in its NSEDP and supported by the Country Assistance Strategy (CAS), namely by: (i) sustaining growth through improved investment climate and competiveness; and (ii) improving social outcomes by improving the quality of the public finance management framework and service delivery mechanism in the health and education sectors. PRSO-6 will contribute to the achievement of these objectives through improving management of key areas (regional integration, private sector development, and quality of investment in natural resource sector) and through strengthening of public financial management and service delivery capacities and targeted poverty reduction programs. With the global economy on its way to recovery, Lao PDR's economy appears ready for another year of sustained economic growth, in which the start of Second Nam Theun (NT2) commercial operations will be an important pillar. Economic growth is expected to be increasingly driven by resource exports (especially hydropower and mining). In 2010, it is expected that the start of NT2 commercial operations will contribute significantly to economic growth in 2010. The recent recovery of commodity prices (especially metals and agriculture) and regional demand has boosted Lao export earnings in the second half of 2009 and will also encourage Foreign Direct Investment (FDI) rebound in 2010 and 2011.