Laos will receive more funding for business to help recovery from pandemic
The government is to receive a US$6.5 million grant through the World Bank to bolster the response to the challenges posed by COVID-19, especially to recover business and trade post-pandemic.
The Lao government and the World Bank have agreed to scale up a Competitiveness and Trade Project that will improve the ability of businesses to recover from the economic effects of Covid-19 as part of the government’s emergency response to the pandemic.
According to the World Bank, the additional financing will provide a US$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 World Bank said.
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.
Deputy Minister of Industry and Commerce, Mr Somchith Inthamith mentioned that 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 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 impacts of Covid-19. The ministry has been implementing the original Lao Competitiveness and Trade Project since late 2018 with US$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. Country Director for the World Bank in Myanmar, Cambodia and Laos, Mariam Sherman, 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” she added.
Source: Vientiane Times