LAO PEOPLE's DEMOCRATIC REPUBLIC COUNTRY ASSISTANCE PROGRAM EVALUATION Phongsaly
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Evaluation Study Reference Number: CAP: LAO 2006-05 Country Assistance Program Evaluation April 2006 Lao People’s Democratic Republic Operations Evaluation Department CURRENCY EQUIVALENTS Currency Unit – Kip (KN) 1986 1991 1996 2001 2006 (as of 31 March) KN1.00 = $0.1000000 $0.0014232 $0.0010769 $0.0001124 $0.0000960 $1.00 = KN10.00 KN702.63 KN928.59 KN8,892.50 KN10,411.29 ABBREVIATIONS ADB – Asian Development Bank ADF – Asian Development Fund ADTA – advisory technical assistance AFD – Agence Française de Développement ANR – agriculture and natural resources (sector) APB – Agriculture Promotion Bank APL – Agriculture Program Loan BEGP – Basic Education (Girls) Project BOL – Bank of Lao PDR BSRP – Banking Sector Reform Program CAPE – Country Assistance Program Evaluation CBTA – Cross-Border Transport Agreement CMISP – Community-Managed Irrigation Sector Project COMPAS – Common Performance Assessment CPI – Committee on Planning and Investment CPRM – Country Portfolio Review Mission CRIP – Champassak Road Improvement Project CSP – Country Strategy and Program CSPU – Country Strategy and Program Update DIDMSP – Decentralized Irrigation Development and Management Sector Project DMC – developing member country DOR – Department of Roads DP – development partner DPE – Division of Poverty Eradication EA – executing agency EdL – Electricité du Laos EIA – environmental impact assessment EQIP-I – (First) Education Quality Improvement Project EQIP-II – Second Education Quality Improvement Project ESP – Environment and Social Program ETSW – economic, thematic, and sector work EWCP – East-West Corridor Project FDI – foreign direct investment FSPL-I – (First) Financial Sector Program Loan FSPL-II – Second Financial Sector Program Loan GDP – gross domestic product GMS – Greater Mekong Subregion GWh – gigawatt-hour ha – hectare HIPC – highly-indebted poor country HRD – human resources development IES – impact evaluation study IMF – International Monetary Fund ITPP – Industrial Tree Plantation Project km – kilometer Lao PDR – Lao People’s Democratic Republic LHSE – Lao Holding State Enterprise LRM – Lao PDR Resident Mission LTSF – Long-Term Strategic Framework M&E – monitoring and evaluation MAF – Ministry of Agriculture and Forestry MCTPC – Ministry of Communication, Transport, Post, and Construction MDG – Millennium Development Goal MfDR – Managing for Development Results MOE – Ministry of Education MPH – Ministry of Public Health MTEF – medium-term expenditure framework MTS – Medium-Term Strategy MTSF – Medium-Term Strategic Framework NAO – National Audit Office NARPDP – Northern Area Rural Power Distribution Project NECP – Northern Economic Corridor Project NEM – New Economic Mechanism NGO – nongovernment organization NGPES – National Growth and Poverty Eradication Strategy NLHP – Nam Leuk Hydropower Project NNLPPTP – Nam Ngum-Luang Prabang Power Transmission Project NNRBDSP – Nam Ngum River Basin Development Sector Project NORAD – Norwegian Agency for Development Cooperation NPL – nonperforming loan NPTWSSP – Northern Provincial Towns Water Supply and Sanitation Project NR – national road NSC – National Statistics Center NSHDP – Nam Song Hydropower Development Project NT2 – Nam Theun 2 NTR – normal trade relations NUOL – National University of Laos O&M – operation and maintenance OED – Operations Evaluation Department PBA – performance-based allocation PCR – project/program completion report PEMSP – Public Expenditure Management Strengthening Program PERP – Postsecondary Education Rehabilitation Project PHC – primary health care PHCP – Primary Health Care Project PHCPE – Primary Health Care Project Expansion PIP – public investment program PIU – project implementation unit PMO – Procurement Monitoring Office PPAR – project/program performance audit report PPER – project performance evaluation report PPR – project/program performance rating PPTA – project preparatory technical assistance PRC – People’s Republic of China PRGF – Poverty Reduction and Growth Facility PRPA – Poverty Reduction Partnership Agreement PRS – Poverty Reduction Strategy PRSP – Poverty Reduction Strategy Papers PSD – private sector development PSERP – Postsecondary Education Rehabilitation Project PTDP – Power Transmission and Distribution Project RARP – Rural Access Roads Project RCSP – Regional Cooperation Strategy and Program RCSPU – Regional Cooperation Strategy and Program Update RETA – regional technical assistance RRDP – Roads for Rural Development Project RUVWSP – Rehabilitation and Upgrading of Vientiane Water Supply Project SAC – Structural Adjustment Credit SAF – Structural Adjustment Facility SAPE – Sector Assistance Program Evaluation SAPL – Second Agriculture Program Loan SARS – severe acute respiratory syndrome SCB – state-owned commercial bank SCSPP – Shifting Cultivation Stabilization Pilot Project SDP – Smallholder Development Project SES – special evaluation study SIDA – Swedish International Development Cooperation Agency SMEs – small and medium-sized enterprises SOE – state-owned enterprise SPTWSP – Southern Provincial Towns Water Supply Project STDSP – Small Towns Development Sector Project STEA – Science, Technology, and Environment Agency STUDP – Secondary Towns Urban Development Project SWAP – sector-wide approach SWIM – sector-wide management TA – technical assistance TCR – technical assistance completion report THHP – Theun Hinboun Hydropower Project TPAR – technical assistance performance audit report TTC – teacher training college UDAA – Urban Development Administration Authority UNDP – United Nations Development Programme US – United States VIUDP – Vientiane Integrated Urban Development Project VUISP – Vientiane Urban Infrastructure and Services Project WASA – Water Supply Authority WSSSP – Water Supply and Sanitation Sector Project WTO – World Trade Organization XHP – Xeset Hydropower Project XKRIP – Xieng Khouang Road Improvement Project NOTES (i) The fiscal year (FY) of the Government ends on 30 September. (ii) In this report, “$” refers to US dollars. Director General B. Murray, Operations Evaluation Department (OED) Director R.K. Leonard, Operations Evaluation Division 1, OED Team Leader S. Hutaserani, Principal Evaluation Specialist, Operations Evaluation Division 1, OED Team Members O. Nuestro, Evaluation Officer, Operations Evaluation Division 1, OED O. Badiola, Sr. Operations Evaluation Assistant, Operations Evaluation Division 1, OED Operations Evaluation Department, CE-12 CONTENTS Page EXECUTIVE SUMMARY iii MAPS ix I. INTRODUCTION 1 A. Objectives and Goal of the Country Assistance Program Evaluation 1 B. Scope of the Country Assistance Program Evaluation 1 C. Evaluation Methodology of the Country Assistance Program Evaluation 1 II. DEVELOPMENT CONTEXT AND THE GOVERNMENT’S STRATEGIC PRIORITIES 5 III. ASSESSMENT OF QUALITY AT ENTRY OF COUNTRY STRATEGIES: RELEVANCE AND POSITIONING 11 A. Relevance of Country Strategies to the Government’s National Development Strategies/Plans 11 B. Relevance of Country Strategies to the Country’s Socioeconomic Issues 13 C. Relevance of Country Strategies to the Asian Development Bank’s Corporate Strategies 15 D. Harmonization of Country Strategies with Other Key Development Partners 16 E. Positioning of Country Strategies 17 IV. ASSESSMENT OF QUALITY AT ENTRY OF COUNTRY PROGRAMS: POSITIONING 20 A. Sufficient Background Research on Sector/Thematic Strategies 21 B. Government’s Absorptive Capacity and Ownership 21 C. The Asian Development Bank’s Comparative Advantage and Partnerships with Other Development Partners 22 D. Focus/Selectivity and Synergies 24 E. Long-Term Continuity 25 F. Constraints/Risks and Adjustment/Monitoring Mechanism to Achieve Measurable Targets 25 G. All Criteria Combined 26 The guidelines, formally adopted by the Operations Evaluation Department (OED) on avoiding conflict of interest in its independent evaluations, were observed in the preparation of this report. R. Anderson, E. Breckner, C. Brown, P. Ghate, M. Godfrey, and S. Lohani were the international consultants, employed for a total period of 8 person-months. OED used their expertise mainly for preparing preliminary draft reports on sector assessments as inputs for the Team Leader to use in the preparation of this report. The consultants were not involved in processing any projects or programs in the Lao PDR. To the knowledge of the management of OED, there were no conflicts of interest of the persons preparing, reviewing, or approving this report. ii V. RESULTS ACHIEVEMENT: BOTTOM-UP ASSESSMENT OF EFFECTIVENESS 27 A. Program Contributions to Achieving Intermediate Outcomes by Sector 28 B. Program Contributions to Achieving Intermediate Outcomes by Theme 45 C. Program Contributions to Achieving the Country Strategy Objective of Poverty Reduction 54 VI. RESULTS ACHIEVEMENT: TOP-DOWN ASSESSMENT OF LONG-TERM DEVELOPMENT IMPACTS AND THE MILLENNIUM DEVELOPMENT GOALS 54 A. Program Contributions to The Country’s Achievement of Long-Term Impacts 55 B. Exogenous Factors 55 C. Country’s Challenges and Prospects: Future within Reach? 55 VII. PROGRAM IMPLEMENTATION: ASSESSMENT OF EFFICIENCY 56 A. Project Performance Rating 56 B. Financial Performance 57 C. Factors Affecting Implementation Performance 58 VIII. PROGRAM ATTRIBUTION: ASSESSMENT OF OTHER ASPECTS 58 A. Government Performance 58 B. The Asian Development Bank’s Performance 59 C. Harmonization and Partnerships 61 D. Nongovernment Organizations’ Role 62 IX. OVERALL PERFORMANCE ASSESSMENT AND RATING 63 A. Sector-Level Performance (Bottom-Up) 63 B. Strategic- and Country-Level