Lao People’s Democratic Republic Peace Independence Unity Prosperity 8th FIVE-YEAR NATIONAL SOCIO- ECONOMIC DEVELOPMENT PLAN (2016–2020) (Officially approved at the VIIIth National Assembly’s Inaugural Session, 20–23 April 2016, Vientiane) Ministry of Planning and Investment June 2016 8th FIVE-YEAR NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2016–2020) (Officially approved at the VIIIth National Assembly’s Inaugural Session, 20–23 April 2016, Vientiane) Ministry of Planning and Investment June 2016 FOREWORD The 8th Five-Year National Socio-economic Development Plan (2016–2020) “8th NSEDP” is a mean to implement the resolutions of the 10th Party Conference that also emphasizes the areas from the previous plan implementation that still need to be achieved. The Plan also reflects the Socio-economic Development Strategy until 2025 and Vision 2030 with an aim to build a new foundation for graduating from LDC status by 2020 to become an upper-middle-income country by 2030. Therefore, the 8th NSEDP is an important tool central to the assurance of the national defence and development of the party’s new directions. Furthermore, the 8th NSEDP is a result of the Government’s breakthrough in mindset. It is an outcome- based plan that resulted from close research and, thus, it is constructed with the clear development outcomes and outputs corresponding to the sector and provincial development plans that should be able to ensure harmonization in the Plan performance within provided sources of funding, including a government budget, grants and loans, domestic and foregin private investments, and investments in the financial system. The Plan has also complemented the monitoring and evaluation framework to keep track of implementation progress, which can be a reference for all stakeholders to support, monitor and evaluate the implementation within their domain in each period, especially to support reporting on the progress of the annual, mid-term and end-of-term implementation by achievements, weaknesses, pending issues and challenges that need to be improved and adjusted under the updated circumstances. Vientiane Capital, 1 June 2016 Dr. Souphanh Keomixay Minister of Planning and Investment Contents FOREWORD ii PART I – 7th FIVE-YEAR SOCIO-ECONOMIC DEVELOPMENT PLAN (2011–2015) – IMPLEMENTATION REPORT 2 1. TARGETS AND DIRECTIONS OF THE 7th NSEDP (2011–2015) 2 2. INTERNATIONAL AND DOMESTIC CONTEXT 3 2.1 Global and Regional Context 3 2.2 Domestic Context 3 3. KEY MACROECONOMIC ACHIEVEMENTS OF THE 7th NSEDP IMPLEMENTATION 4 3.1 Macroeconomic Achievements 4 3.1.1 Economic Growth 4 3.1.2 Inflation 6 3.1.3 Fiscal and Monetary Policy Management 6 3.1.4 Money Supply (M2) 7 3.1.5 Foreign Currency Reserves 7 3.2 Macro balance 8 3.2.1 Investment for Development 8 3.2.2 State Budget Balance 10 3.2.3 Import–Export 11 3.2.4 Labour and Employment 11 3.3 Rural Development and Poverty Reduction 12 3.4 Sector Achievements 13 3.4.1 Economic Sector Development 13 3.4.2 Social Development 31 3.4.3 Sustainable Development, Environmental Protection and Natural Resource Management 43 3.4.4 Enterprise Development 46 3.4.5 Implementation of the Millennium Development Goals (MDGs) 47 3.4.6 Regional and Local Development 55 3.4.7 Public Sector Development 64 3.4.8 Implementation of “Building province as a strategic unit, district as a strong comprehensive unit and village as a development unit” 67 3.4.9 National Defence – Security 68 3.4.10 International and Regional Cooperation 69 3.5 Summary of Sector Achievements and Challenges 72 3.5.1 Summary of Achievements 72 3.5.2 Outstanding Issues 74 3.5.3 7th NSEDP Lessons Learnt to be Applied to 8th NSEDP Design 76 PART II 81 8th NSEDP (2016–2020) 81 4. CONTEXT OF 8th NSEDP 82 4.1 Favourable Environment 82 4.1.1 Regional and International Context 82 4.1.2 Domestic Context 82 4.2 Anticipated Challenges 82 4.2.1 Regional and International Context 82 4.2.2 Domestic Context 83 4.3 Population Policy Issues 83 4.4 Sustainable development 84 4.5 LDC Graduation 85 5. LONG-TERM PLANS: VISION 2030, STRATEGY 2025 AND MAIN DIRECTIONS FOR 2016–2020 86 5.1 Vision 2030 86 5.2 Ten-year Socio-economicDevelopment Strategy (2016–2025) 86 5.3 Key Government Direction for the 8th NSEDP (2016–2020) 87 6. OVERALL OBJECTIVE, OUTCOMES AND OUTPUTS OF THE 8TH NSEDP 87 6.1 Overall objective and objective-Level Performance Indicators and Targets 87 6.2 Outcomes of the 8th NSEDP (2016–2020) 89 6.3 Summary of Outputs Required to Achieve Each Outcome 94 6.4 Outcome 1 Outputs 94 6.4.1 Outcome 1, Output 1: Ensuring Sustained and Inclusive Economic Growth 94 6.4.2 Outcome 1, Output 2: Macroeconomic Stability 103 6.4.3 Outcome1, Output 3: Development Planning and Budgeting are Aligned 105 6.4.4 Outcome1, Output4: BalancedRegional and Local Development 106 6.4.5 Outcome1, Output5: Improved Public/Private Labour Force Capacity 116 6.4.6 Outcome1, Output6: Develop Entrepreneurs, technical experts and professionals 118 6.4.7 Outcome 1, Output7: Regional and International Cooperation and Integration 119 6.5 Outcome 2 Outputs 124 6.5.1 Outcome 2, Output 1: Improved Living Standards through Poverty Reduction using the 3-Builds Directions 124 6.5.2 Outcome2, Output2: Food security Ensured and Malnutrition Reduced 127 6.5.3 Outcome 2, Output 3: Universal Access to Quality Education: 130 6.5.4 Outcome 2, Output 4 – Universal Access to QUALITY Health Care Services 132 6.5.5 Outcome2, Output 5: Improvement of and Access to Social Protection 133 6.5.6 Outcome 2, Output 6: Protection of national Traditions and Cultures 134 6.5.7 Outcome 2, Output 7: Maintain Political Stability, Social Peace, Order, Justice and Transparency 135 6.6 Outcome 3 Outputs 138 6.6.1 Outcome 3, Output 1: Environmental Protection and Sustainable Natural Resources Management 138 6.6.2 Outcome 3, Output 2: Prepare to Cope with the Disaster Risks and Impacts from Climate Change 142 6.6.3 Outcome 3, Output 3: Reducing the Instability of Agricultural Production Caused by Disaster Impact 145 6.7 Priority Cross-Cutting Outputs 146 6.7.1 Enhance Effectiveness ofthe Public Governance and Administration 146 6.7.2 Promote Local Innovation and Utilization of Science, Technology and Telecommunications and Management and Application of ICT 150 6.7.3 Promote and Develop Women, Juveniles and Young People 153 PART III: 8th NSEDP IMPLEMENTATING MEASURES 164 7. POLICIES 164 8. IMPLEMENTING MEASURES OF THE 8th NSEDP (2016–2020) 164 8.1 Macroeconomic Framework 164 8.2 Financing Plan 165 8.3 Revenue and Expenditure Management 166 8.4 Production 167 8.5 Transit Services and Logistics 167 8.6 Science and Technology Application 167 8.7 Promotion of Small and Medium-Sized Enterprises 168 8.8 Capacity Building 168 9. ROLL-OUT OF 8th NSEDP 169 10. 8th NSEDP MONITORING AND EVALUATION 169 10.1 Key Elements of The 8th Nsedp M&E System 169 10.2 Monitoring and Evaluation 170 LIST OF TABLES Table 1:Comparison between GDP Growth Rate of each Fiscal Year with the 7th NSEDP Targets (2011–2015) 4 Table 2: Gross Domestic Product (GDP) per Capita 5 Table 3: Changes of Economic Structure in Each Fiscal Year compared with the 7thNSEDP Targets 5 Table 4 : Changes in the Inflation Composition 6 Table 5: Foreign Currency Exchange Rate 7 Table 6: Money Supply Growth 7 Table 7: Foreign Currency Reserves 7 Table 8: Bank Credit Investment 10 Table 9: Summary of Revenue and Expenditure 11 Table 10: Number of Tourist Arrivals and Revenue from Tourism 38 Table 11: Universal Access for Primary Education Indicators 50 Table 12: Gender Equality and Advancement of Women Indicators 50 Table 13: Child Mortality Reduction Indicators 51 Table 14: Maternity Health Indicators 52 Table15: 7th Five-Year NSEDP Performance in the Northern Region 58 Table16: 7th Five-Year Plan Performance of the Central Region 61 Table 17: 7th NSEDP Implementation Performance in the Southern Region 63 Table 18: Overall Objective-Level Performance Indicators and Targets 88 Table 19: Outcome Indicators and Targets 91 ANNEXES Annex 1: 8th NSEDP Logical Framework 174 Annex 2: 7th NSEDP Achievement Figures 184 Annex 3: Main Targets Main Targets Of The 8Th NSEDP (2016-2020) 186 Annex 4: Poverty Rate, Poverty Gap And Severity Index, Gini Coefficient 187 Annex 5: Glossary Of Terms 189 PART I 7th FIVE-YEAR NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2011–2015) IMPLEMENTATION REPORT 8th FIVE-YEAR NATIONAL SOCIO-ECONOMIC DEVELOPMENT PLAN (2016-2020) 2 PART I – 7th FIVE-YEAR SOCIO-ECONOMIC DEVELOPMENT PLAN (2011–2015) – IMPLEMENTATION REPORT 1. TARGETS AND DIRECTIONS OF THE 7th NSEDP (2011–2015) The 7th NSEDP (2011–2015) aimed to achieve sustainable economic growth and poverty reduction, while gradually transforming Lao PDR into a more open, strengthening the private sector productivity capacity and prioritizing the achievement of the Millennium Development Goals (MDGs) by 2015. The 7th NSEDP had four overall targets: • Ensure continuation of national economic growth with security, peace and stability and ensure GDP growth rate of at least 8 percent annually and GDP per capita of at least US$ 1,700 • Achieve the Millennium Development Goals (MDGs), join the ASEAN Economic Community by 2015, and eradicate poverty; adopt appropriate technology and skills and create favourable conditions for graduating the country from Least Developed Country (LDC) status by 2020 • Ensure the sustainability of development by emphasizing on economic development which should include cultural and social progress, natural resources preservation and environment protection, natural disasters mitigation and climage