Grawe, Roger2017-08-152017-08-152010-09-011-60244-154-5https://hdl.handle.net/10986/27863The Lao PDR has been a one-party, socialist state since the overthrow of the monarchy by the communist Pathet Lao in 1975, which was preceded by a long period of civil and regional strife. After a decade of relative isolation and close military cooperation with Vietnam, the new economic mechanism, introduced in 1986, ushered in an era of market-based reforms, which has continued to the present day. Lao PDR is one of the poorest countries in East Asia, with a 2006 per capita income of US$ 500. In 2004, 71 percent of its population of 5.7 million lived on less than US$ 2/day and 23 percent on less than US$ 1/day. However Lao PDR has grown rapidly since the inauguration of reforms two decades ago. During the 1990s growth averaged 6 percent per annum despite severe imbalances during the Asian crisis. Following successful stabilization, growth continued to average close to 6 percent during 2001-2004, accelerating in 2005-2007 to over 7 percent. Inflation remained well below 10 percent since 2005. Although Lao PDR qualifies for the Heavily Indebted Poor Countries (HIPC) initiative, the Government has chosen to maintain normal creditor relations. The latest debt sustainability analysis confirms that, while risk of debt distress is high, medium term debt service is manageable, contingent on continued reform and prudent fiscal management. Foreign direct investment has almost quadrupled between 2004 and 2007, and exceeds US$ 800 million annually, mostly in hydropower and mining. Growth in Lao PDR has been pro-poor. Based on the national poverty line, the poverty headcount has fallen from almost half to one-third of the population during the decade ending in 2002-2003. The country's performance on other elements of poverty reduction as summarized in the millennium development goals is mixed.en-USCC BY 3.0 IGOACCESS TO RESOURCESACCOUNTABILITYADBADJUSTMENT LENDINGALLOCATIONALLOCATION OF RESOURCESANNUAL REVIEWSAPPROPRIATIONSARREARSARTICLEAUTONOMYBANK POLICYBANKING SECTORBANKING SECTOR REFORMSBORROWERBUDGET CYCLEBUDGET DISCIPLINEBUDGET ESTIMATESBUDGET EXECUTIONBUDGET FORMULATIONBUDGET LAWBUDGET OFFICIALSBUDGET PLANNINGBUDGET PREPARATIONBUDGET RESOURCESBUDGET SUPPORTBUDGETINGCAPACITY BUILDINGCAPACITY CONSTRAINTSCAPACITY-BUILDINGCAPITAL INVESTMENTCASH MANAGEMENTCENTRAL AGENCIESCHART OF ACCOUNTSCIVIL SERVICECIVIL SERVICE REFORMCOMMERCIAL BANKCOMMERCIAL BANKSCONDITIONALITYCOST RECOVERYCOUNTRY PROCUREMENTCOUNTRY PROCUREMENT ASSESSMENTCREDIBILITYCREDITORDATA AVAILABILITYDEBTDEBT MANAGEMENTDEBT SERVICEDEBT SUSTAINABILITYDEVELOPMENT BANKDIAGNOSTIC WORKDISBURSEMENTDISBURSEMENTSDONOR COORDINATIONECONOMIC DEVELOPMENTECONOMIC GROWTHEDUCATION EXPENDITURESEDUCATION SERVICESEFFECTIVENESS OF GOVERNMENTENABLING ENVIRONMENTENTERPRISE PERFORMANCEEXPENDITURE DATAEXPENDITURE PLANNINGEXPENDITURE PRIORITIESEXPENDITURE TRACKING SURVEYSEXTERNAL AUDITFIDUCIARY ASSESSMENTFINANCIAL ACCOUNTABILITYFINANCIAL INFORMATIONFINANCIAL MANAGEMENT CAPACITYFINANCIAL OVERSIGHTFINANCIAL SECTORFINANCIAL SUSTAINABILITYFISCAL DECENTRALIZATIONFISCAL RELATIONSFOREIGN DIRECT INVESTMENTGENERAL BUDGET SUPPORTGOVERNMENT CAPACITYGOVERNMENT EXPENDITURESGOVERNMENT FINANCEGOVERNMENT FINANCE STATISTICSGOVERNMENT OWNERSHIPGOVERNMENT POLICYGOVERNMENT REFORMGROSS DOMESTIC PRODUCTHEALTH EXPENDITUREHEALTH FINANCINGHEALTH FINANCING SYSTEMHEALTH WORKERSINFLATIONINFORMATION SYSTEMSINFRASTRUCTURE INVESTMENTSINSTITUTIONAL DEVELOPMENTINSTRUMENTINTERNAL CONTROLINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINVESTMENT CLIMATEINVESTMENT CORPORATIONINVESTMENT LOANSINVESTMENT PROJECTSLEGAL FRAMEWORKLEGISLATIVE FRAMEWORKLENDING INSTRUMENTSLIQUIDITYLIQUIDITY POSITIONMACRO-STABILITYMACROECONOMIC MANAGEMENTMACROECONOMIC POLICYMASTER PLANMEDIUM TERM EXPENDITUREMEDIUM TERM EXPENDITURE PLANNINGMICROFINANCEMINISTRY OF FINANCEMONETARY CONTROLNATIONAL DEVELOPMENTNATIONAL STATISTICSNATURAL RESOURCESOVERSIGHT FUNCTIONPOLICY FORMULATIONPORTFOLIOPOVERTY ASSESSMENTPOVERTY REDUCINGPOVERTY REDUCTIONPOVERTY REDUCTION STRATEGIESPOVERTY REDUCTION STRATEGYPOVERTY REDUCTION SUPPORTPOVERTY-REDUCING ACTIVITIESPRIVATE SECTORPRIVATE SECTOR GROWTHPROGRAM IMPLEMENTATIONPROGRAMSPROVINCIAL EXPENDITUREPROVINCIAL LEVELPROVINCIAL LEVELSPRUDENT FISCAL MANAGEMENTPUBLIC ADMINISTRATIONPUBLIC EXPENDITUREPUBLIC EXPENDITURE MANAGEMENTPUBLIC EXPENDITURE POLICYPUBLIC EXPENDITURE REVIEWPUBLIC EXPENDITURE TRACKINGPUBLIC EXPENDITURESPUBLIC FINANCIAL MANAGEMENTPUBLIC FINANCIAL MANAGEMENT SYSTEMPUBLIC FINANCIAL MANAGEMENT SYSTEMSPUBLIC INSTITUTIONSPUBLIC INVESTMENTPUBLIC MANAGEMENTPUBLIC RESOURCESPUBLIC SECTORPUBLIC SECTORSPUBLIC SPENDINGRECAPITALIZATIONRECURRENT EXPENDITURESREFORM ACTIONSREFORM AGENDAREFORM STRATEGYREGULATORY FRAMEWORKRESOURCE ALLOCATIONRESOURCE FLOWSRESOURCE MANAGEMENTRETURNREVENUE FORECASTINGREVENUE GROWTHROAD MAINTENANCESALARY PAYMENTSSANITATIONSECTOR BUDGETSECTOR POLICIESSECTORAL ALLOCATIONSSERVICE DELIVERYSOCIAL OUTCOMESSOCIAL SERVICESSTATE AUDIT OFFICESTATUTORY FUNDSSTRATEGIC PRIORITIESSTRUCTURAL ADJUSTMENTSTRUCTURAL PROBLEMSSTRUCTURAL REFORMSSUSTAINABILITY ANALYSISTAXTAX LAWTECHNICAL ASSISTANCETIMELY PAYMENTTOTAL EXPENDITURESTOTAL PUBLIC EXPENDITURETRANCHETRANCHESTRANSPARENCYTRANSPORTTREASURYTREASURY FUNCTIONTRUST FUNDWAREHOUSEWITHDRAWALWorking PaperWorld Bank10.1596/1-60244-154-5