Making a ‘Down Payment’ on Development for All

October 5, 2011

By Minh H. Pham

Last week, in one of the poorest, least developed and most remote regions of Lao PDR, the Government and the international development community met to examine practical opportunities and challenges at the provincial level with regard to the national development process. Amid the beautiful green hills of Xekong Province, we had what I call an “equity reality check.”

Equity is central to development. It comes from the idea of moral equality – that people should be given equal life chances, receive services based on equal concern for their needs, and benefit from fair competition for positions and rewards in society.    

In Lao PDR, tremendous development gains already have been made at the national level. But poverty remains widespread, and inequalities between rural and urban areas are rising. This is especially crucial for a province like Xekong, where the human development ranking is among the lowest in the country. It means urgent action must be taken to improve household income, education and health if the province – which, like others, is overwhelmingly rural – is to achieve the Millennium Development Goals (MDGs) to reduce poverty by half by 2015. Critically, achieving these global goals across the country is a valuable pillar of the national development plan. 

Should the MDGs be achieved, Lao PDR will have moved decisively toward its ambitious and overarching goal of “graduation” by 2020 from being a Least Developed Country (LDC) to middle-income status. In all, therefore, the MDGs represent a major “down payment” for LDC graduation.

The Government likely will be considering all this as it discusses a 2012 high-level conference on the national vision to achieve progress on LDC graduation. This also provides an important backdrop as preparations for the 22 November Round Table Implementation Meeting (RTIM) for international donors move into high gear. Meeting the MDGs will be high on the RTIM agenda, and lessons from Xekong are expected to further enrich the discussions.

Yet a further crucial question for donors will be: How do we support the Government to deliver on its other ambitious goals? For example, can we ensure that when Lao PDR graduates as a country, all the people – including those in Xekong – graduate as well?

We can do it. But we have to do it right, keeping people at the centre of development. It is about equity. 

The MDGs, despite their wide-ranging sets of goals, do not address equity directly, nor do the criteria for a country’s LDC graduation. Moreover, such criteria rely on national-level indicators, and national averages may mask continuing vulnerability among a significant proportion of the population in places like Xekong. It will be vital for the Government to remain mindful of this, given Lao PDR’s persistently high proportion of poor people.

Other LDC graduation issues, also not covered in the MDGs or the national development plan, likewise require urgent attention. One is that of preferential trade, since the loss of such treatment as a middle-income country could affect the viability of important economic sectors such as garments, processed foods, and agricultural products.    

The second issue is that of development financing, which will shift from grants to loans upon graduation. This transition must be managed well to secure longer-term national financial stability.  Close attention also must be paid to a graduation timetable under which the United Nations Economic and Social Council (ECOSOC) reviews countries’ performance on graduation criteria only every three years, with full eligibility for graduation often taking several more years.

The emphasis now in Lao PDR will need to be on what can bring the vision for graduation to fruition, given that there is a great deal to be done.  What will be needed most is irreversible, catalytic progress on the MDG “down payment” by the 2015 target – implying a sufficient infrastructure, capable human resources, sound economic specialization, and a fair level of resilience to external economic shocks, among other things.  

There exists great potential across Lao PDR, as demonstrated in Xekong, where the number of poor families is decreasing; average income per person has risen, although 151 of the province’s 229 villages are still considered poor. These gains were particularly demonstrated at Ban Kun Done, a model “cultural village” in Xekong’s Thateng District. With 95 percent of its population derived from the Katu ethnic group, Ban Kun Done has progressed far from its origins in one of the 47 poorest districts in the country, and now nestles among terraced fields of rice, mulberry, and a variety of cash crops.

Indeed, while achieving the MDGs often remains an abstract concept for those of us privileged to live and work in Vientiane, for many in greater Xekong – farmers, weavers, aging war veterans, and young people alike – it is not abstract at all. They too have dreams and aspirations, not just for material progress, but also for the opportunity to realize their full potential, build a better future for their children and grandchildren, and participate in decisions that affect their lives.  

For them, the MDGs are not just a “down payment.” They are a matter of survival – and a long-term investment if Lao PDR hopes to officially become a middle-income country.  

Minh H. Pham is Resident Coordinator of the United Nations System in Laos and Resident Representative of the United Nations Development Programme (UNDP).

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