LAO PEOPLES DEMOCRATIC REPUBLIC
                                                                                 66481
                      POVERTY REDUCTION STRATEGY PAPER AND
                         JOINT IDA-IMF STAFF ADVISORY NOTE

                                     CHAIR’S SUMMING UP

                         Meeting of Board of Executive Directors of IDA

                                           January 12, 2012

        The Executive Directors discussed the Poverty Reduction Strategy Paper, prepared by the
Government of Lao PDR, and the Joint IDA-IMF Staff Advisory Note on the PRSP
(IDA/SecM2011-0693). Directors agreed that the PRSP appropriately targets the challenging issues
related to macroeconomic stability, inclusive and sustainable private sector led growth, regional
integration, public financial management, international and regional cooperation, and human
development. They considered the government’s targets to be ambitious but achievable, and
encouraged prioritized, concrete interventions to achieve them.

        Directors commended Lao PDR for their development progress including an important
decline in poverty in the country. Directors noted the remaining challenges related to achieving the
Millennium Development Goals by 2015, and welcomed the authorities’ enhanced focus on the MDG
agenda. A number of Directors applauded the focus on rural development, given the lingering
disparities in poverty levels between rural and urban populations. The importance of disaster risk
management and longer-term food security was also emphasized.

        Directors noted the implementation capacity constraints that Lao PDR faces, and encouraged
the Bank to assist the country in strengthening its oversight and monitoring capacity through
technical assistance and advisory services. Directors also noted the importance of strong country
ownership and leadership to Lao PDR’s development effectiveness. The importance of consultation
with civil society and a strong dissemination strategy of the PRSP was also highlighted.

        Given the uncertain global economic outlook, Directors encouraged the authorities to monitor
macroeconomic conditions and the financial system more proactively, and to develop appropriate
contingency plans. Greater diversification of economic growth was also encouraged. In addition, the
development of a medium-term financing strategy to support implementation of the National Socio-
Economic Development Plan (NSEDP) was encouraged. Directors also emphasized strengthened
debt management and public financial management, particularly to enhance the quality and efficiency
of public spending, and to increase non-mining revenues.

        Regarding natural resources, some directors highlighted the need to align the pace of natural
resource extraction with the capacity to manage it effectively. Moreover, they encouraged the
government to consider becoming members of the Extractive Industries Transparency Initiative. That
said, the importance of developing the resource sector, given the limited availability of concessional
financial resources, was noted.

Directors highlighted a number of areas where further elaboration in the upcoming Country
Partnership Strategy is warranted. These include diversification; pro-poor growth, with attention paid
to gender issues; inclusive development; fiscal policy; skills and private sector development;
resettlement; and management of natural resources.


 This summary is not an approved record.