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1 EAST ASIA AND PACIFIC Lao People's Democratic Republic Trade & Competitiveness Global Practice IBRD/IDA Technical Assistance Loan FY 2013 Seq No: 5 DRAFT ISR20743 Implementing Agencies: Ministry of Industry and Commerce, Department of Imports and Exports, Ministry of Industry and Commerce, Department of Foreign Trade Policy Department, Ministry of Industry and Commerce Key Dates Key Project Dates Bank Approval Date:04-Dec-2012 Planned Mid Term Review Date:11-May-2015 Original Closing Date:31-Mar-2017 Effectiveness Date:08-May-2013 Actual Mid-Term Review Date:01-Jun-2015 Revised Closing Date:31-Mar-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to support the implementation of government's trade and integration priorities outlined in the2012 DTIS Roadmap, and in particular to contribute to improved competitiveness and diversification, focusing outside the natural resource sectors. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Trade facilitation, trade policy and regulations:(cost $5.60 M) Diversification and competitiveness:(cost $4.10 M) Mainstreaming aid for trade:(cost $4.30 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate 12/18/2015 Page 1 of 9

2 Implementation Status and Key Decisions The Mid-Term Review (MTR, June 1-11) for the Second Trade Development Facility Project (TDF-2) took stock of implementation performance and the quality of activities undertaken over the first two years of the project, including the likelihood of achieving the project development PDO and results and pace of implementation and disbursements, as well as reviewing the extent to which activities remain relevant and appropriate to the government s trade and integration strategy. The TDF-2 will move from technical preparation to the implementation of approved regulatory reforms, particularly in the area of SPS laws and NTMs. The link between program activities, gender and poverty reduction can be made more visible. More focus could be given to communications and outreach work that fully demonstrates the results achieved by the TDF-2 in the area of improved competitiveness, private sector development and diversification of the Lao economy. Even though the Ministry of Industry and Commerce (MoIC) has largely driven the success of implementation, MoIC requires the cooperation of line ministries and agencies to finalize the ambitious TDF-2 work agenda. Improved interagency coordination will therefore be an important aspect of TDF-2 in its second phase. While it is likely that the Project Development Objective (PDO) will be achieved by project closing, information for some intermediate indicators was unavailable at the time of the mission. For example, the 2016 Enterprise Survey of Lao PDR will be an important benchmark against which progress in some areas of TDF-2 implementation will be measured, but the results of this survey will only be available in early Surveys conducted by independent entities confirm the positive trajectory of progress towards the PDOs. On trade facilitation, however, there were mixed signals of progress. The overall Logistic Performance Indicator (LPI) has deteriorated slightly, while the customs-specific LPI score improved from 2.38 (2012) to 2.45 (2014). Some delays in startups and procurement affected the progress of intermediate indicators; therefore, target setting might need to be reviewed, especially with respect to Component B (on the Business Assistance Facility and Labor Standards). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Low Low Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Low Low Institutional Capacity for Implementation and Sustainability -- Low Low Fiduciary -- Low Low Environment and Social -- Low Low Stakeholders -- Moderate Moderate Other Overall -- Moderate Moderate Results Project Development Objective Indicators 12/18/2015 Page 2 of 9

3 PHINDPDOTBL Reduced mean number of days to clear imports (Days, Custom) Value A new WB Enterprise survey will be launched in early-2016, which reflect the latest result. PHINDPDOTBL Reduced mean number of days to clear exports (Days, Custom) Value A new WB Enterprise survey will be launched in early-2016, providing updated information relevant to this indicator. PHINDPDOTBL Improved logistics performance score (Number, Custom) Value Date 01-Apr Feb Jun Mar-2017 Overall Logistic Performance score slightly deteriorated to 2.39 (LPI 2014); however, the customs specific score of LPI has improved from 2.38 (2012) to 2.45 (2014). Overall Since a new Enterprise Survey is not available at the MTR, the team will wait for the latest data from the upcoming World Bank Enterprise Survey 2015, which is expected to be available in Although the mission does not consider other sources as an official source for our results, the team observed the slight improvement in a similar indicator in other business perception survey. WBES and LPI are not annually published, and the team may extend the completion date of the project; therefore there is a concern that the team cannot measure the results at the completion in case the latest surveys (WBES / LPI) if unavailable. In such a case, the team agreed that they will conduct original surveys with same methodologies to measure the results for the TDF2. 12/18/2015 Page 3 of 9

4 Intermediate Results Indicators Reduction in percent of firms identifying customs and trade regulations as a major constraint (Percentage, Custom) Value % from WBES A new WB Enterprise survey will be launched in early-2016, providing updated information relevant to this indicator. Increase in usage statistics for Lao PDR Trade Portal (Percentage, Custom) Value Date 01-Apr Apr Jun Mar-2017 The end target (50 % increase from the baseline) has been achieved. The number of hits for the baseline was 7,179 in Although there is some fluctuation over periods, the LTP has recorded 190,456 hits in 2014, and 49,539 hits at the MTR (June 2015). The team and the NIU will also disaggregate the data (by country of access) to understand who is actually using this portal. Also, the NIU will conduct a small survey on how much LTP has been useful for non-traders or business. As of June 2015, Successful completion rates for Trade Facilitation capacity building program (Percentage, Custom) Value Date 01-Apr Feb Jun Mar-2017 Consultant hired, curriculum being developed for the training. 12/18/2015 Page 4 of 9

5 Frequency and participation of National Trade Facilitation Secretariat meetings to resolve trade facilitation issues, with decisions documented and follow up actions prioritized (Number, Custom) Value Date 01-Apr Feb Jun Mar-2017 Proposed correction: According to the agreement on the structure and role of Trade Facilitation Secretariat No 023/NSCEI dated 20/10/2010 National Trade Facilitation Secretariat meetings shall be organized twice per year but to discuss urgent issues more meetings can also be organized. To be more realistic, we would propose to target 2 times per year. Reduction in the mean number of days required to obtain import licenses (Days, Custom) Value % from the WBES A new WB Enterprise Survey will be launched in early-2016, providing updated information relevant to this indicator. Reduction in the mean number of days required for services firms to obtain operating licenses (Days, Custom) Value % from the WBES A new WB Enterprise Survey will be launched in early-2016, providing updated information relevant to this indicator. 12/18/2015 Page 5 of 9

6 Sales growth in BAF supported firms compared to non-supported firms (Percentage, Custom) Value Date 01-Apr Feb Feb Mar-2017 Due to the delay in implementation, it was too early to measure the sales growth at the MTR. This calculation can be made at the time of the next supervision mission in early Cumulative number of BAF grant approvals (Number, Custom) Value Date 01-Apr Dec Jun Mar-2017 Share of female owned/managed businesses supported using advisory services (Percentage, Custom Supplement) Value Within those businesses, percentage of women employed (Percentage, Custom Supplement) Value /18/2015 Page 6 of 9

7 Garment factory labor standards monitored and reported to internationally recognized standards (Number, Custom) Value Due to delay in contracting with ILO, result should be available in early-2016 according to the revised ILO action plan. Cumulative number of garment enterprises using GSC advisory services (Number, Custom) Value Date 01-Apr Feb Jun Mar-2017 The data is not available. This indicator / component is in discussion between WB and GSC to decide how much the project continues to support the GSC. Improved aid for trade governance framework moving toward a program based approach operating under the TPSWG (Text, Custom) Value Fragmented, standalone work programs Coordinated, joint work planning and results monitoring supervised by the Trade and Private Sector Working Group (TPSWG) Coordinated, joint work planning and results monitoring supervised by the Trade and Private Sector Working Group (TPSWG) Coordinated, Joint work planning and result monitoring supervised by the TPSWG 12/18/2015 Page 7 of 9

8 Increased focus in government planning documents on the poverty, social and gender impact of increased trade and integration (Text, Custom) Value Limited focused Substantive focus with poverty, social and gender impact mainstreamed. Substantive focus with poverty, social and gender impact mainstreamed. Substantive focus with poverty, social and gender impact mainstreamed Gender has been included in the 5 year Industry and trade Development Plan of MOIC Increased share of firms with female management/ownership participation (Percentage, Custom) Value Overall 41.9 % from WBES This value will be updated when the latest WBES becomes available in early-2016, providing updated information relevant to this indicator. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA-H8190 Effective USD % P TF Effective USD % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA-H8190 Effective 04-Dec Mar May Mar Mar /18/2015 Page 8 of 9

9 P TF Effective 28-Mar Mar May Mar Mar-2017 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/18/2015 Page 9 of 9