70234 Options for Strengthening Social Safety Nets in Lao P.D.R: A Policy Note World Bank, July 2010 Introduction1 well as agricultural shocks and natural disasters. In addition, health shocks, injury and death of The Government of Lao PDR (GoL) announced household members can have strong negative that its 7th National Socio-Economic Development implications for household welfare. Plan, covering 2010 through 2015, will focus on achieving the Millennium Development Goals by Lao households adopt a variety of strategies, 2015 and exiting Least Developed Country status including reducing food intake and foregoing by 2020. To achieve these goals, one of the priority schooling of children, to cope with shocks. In many areas in the 7th NSEDP is to reduce vulnerability to cases they are unable to fully smooth their shocks by providing and improving social safety nets consumption, thus increasing poverty in the short (SSN). term and making it difficult to reduce poverty in the long run. The World Bank (WB), in partnership with the GoL and other development partners, has been Figure 1. Headcount Poverty Incidence, working for over a year to identify ways in which National and International Poverty Line poverty and vulnerability can be better measured, as 1992/3 to 2007/8 well as appropriate development instruments to address them. As part of this ongoing work a Social 60 Safety Net Workshop was organized in Vientiane in 56.9 50 March 2010, with the following five objectives: 46.0 49.5 44.4 40 39.1 37.4 1. Improve joint understanding of the current 33.5 30 social protection system (focusing on SSNs). 27.6 20 2. Learn from government about their 1992/3 1997/8 2002/3 2007/8 development priorities for 2011-2015. Lao PDR International Poverty Line 3. Learn from government and donors about their experiences with social protection and poverty Source: DOS/World Bank (2010) reduction programs. The food price and financial crises have highlighted 4. Discuss various SSN options and identify which other forms of vulnerability that are becoming more options are appropriate in the current context important as the Lao economy becomes more open and given current priorities. to global markets and increasingly reliant on the 5. Identify potential ways that donors and market economy. The impact of the food crisis in development partners can work together to Lao appears to have been small compared to other strengthen SSNs in Lao PDR. countries because most households rely on subsistence farming. However, significant numbers This brief note summarizes the findings from the of households now rely on the market for SSN workshop, and potential next steps. consumption, especially during the agricultural lean season. Although access to markets can help reduce Background: Vulnerability and Poverty vulnerability, it also leaves rural households facing new risks if food prices continue to be volatile. Lao PDR has experienced high levels of economic growth in recent years and the incidence of poverty The proportion of the population in wage has fallen dramatically since the 1990s (Figure 1). employment, particularly formal sector Yet, households throughout the country continue to employment, is low, so “economic� shocks such as be highly vulnerable to regular seasonal fluctuations unemployment are not yet a major source of risk to in food security and employment opportunities, as many households, even in urban areas. However, market fluctuations are likely to become more significant sources of risk in future. Although urban 1 This note was prepared by a team from the World households are most vulnerable to unemployment, Bank East Asia Social Protection team who visited rural communities can also be affected by Lao PDR, March 2010. 1 reductions in remittances, prices of cash crops, or briefly described below. For a more detailed employment opportunities (Figure 2).2 review, see World Bank (2010). Although some households in wealthier or urban Formal social security and health insurance schemes areas are exposed to shocks, the main determinants are limited to the public sector and the formal, of vulnerability remain geographic. The chronic urban, private sector, which make up a very small poor in remote, rural, upland areas, are most proportion of employment. In rural areas, there are exposed to seasonal fluctuations and natural several disaster relief and food for work (or cash for disasters, and find it the hardest to cope: they lack work) schemes. These are largely implemented by access to existing safety nets or to alternative the World Food Program, in conjunction with the income sources, which would enable them to buy Ministry of Labor and Social Welfare (MOLSW), food from the market. Within these regions although several other NGOs run small programs. particular groups, including children, women, the disabled and the elderly are likely to be particularly Existing schemes usually respond to natural badly affected by shocks. disasters, or target only the very poorest areas and are usually of short duration. Some areas also Figure 2. Percentage of Households benefit from school feeding programs, currently Experiencing Shocks implemented by the World Food Program (WFP), which can also act as a safety net to safeguard child Pests, crop/livestock… nutrition and enrolment in times of food shortage. Illness In addition, the MOLSW in conjunction with Drought several donors runs some small-scale programs Flood targeted at specific vulnerable groups, such as street Fall in sale price children or women at risk of being trafficked. Injury Crime No work The government currently has a program, the Non-payment of income Poverty Reduction Fund (PRF), which supports the Death building of small-scale infrastructure in the poorest Frost, temperature, fire communities, as well as aiming to build community Confisc.… Job loss empowerment and capacity for decision making. Rise in input price Although participants are not paid a wage, making it Divorce difficult for PRF support to act as a safety net in the traditional sense, the construction of infrastructure 0% 10% 20% 30% and improvement of access to services can help communities to reduce vulnerability. Source: World Bank Vulnerability Study (2008a), sample weighted to reflect population by province Although many of these schemes have successfully helped households cope with shocks, there are many Experience with Social Safety Nets vulnerable groups who lack any support. Programs Social safety nets are normally understood as are fragmented and uncoordinated, and highly mechanisms that protect households against falling dependent on donor funding and implementation. into poverty (or against increased deprivation if they There is a clear need for capacity building within the are already poor) as a result of risks that they face. Ministry, so that a more coherent and Access to formalized safety net programs in Lao comprehensive approach can be implemented. PDR is low, particularly in the most remote areas of the country. The safety nets currently available are Lao PDR Development Priorities and the Role of SSNs 2 The prevalence of both cash crop production and The 7th National Socio-Economic Development plantations is growing. The PSIA (WB/EC, 2008) Plan (NSEDP) will be the focal document detailing found that, in 7 priority districts from the list of 47 how Lao PDR aims to achieve the MDGs and poor districts included in the study, despite remote graduate from LDC status by 2020. Many gains for locations virtually all of the poor and non Lao-Tai the poor were made during the implementation of communities were participating to some extent in the 6th NSEDP (covering 2006-2010) through social cash crop growing for either domestic or export programs. However, recurring shocks produced markets. 2 negative impacts on the well-being of rural people 3. Provide the poor and vulnerable groups with whose capacity to cope is low, pushing them into low wage public works and vocational training poverty. Therefore, the new plan seeks to protect in order for them to achieve self reliance, the the poor and vulnerable from shocks through social same as other groups. assistance programs.3 4. Establish village funds, village revolving funds One of the specific directions of the 7th NSEDP is and savings groups; provide training on income rural development and poverty reduction, with generation, food production and nutrition in specific focus on poor villages and Kumbans. order to improve health and increase incomes. Among its targets is the promotion of „development 5. Ensure warning systems on natural disasters are villages‟. To this end, the Lao Rural Development well functioning, provide assistance and and Poverty Eradication Plan (RDPER), drafted by protection for the poor and vulnerable group as an inter-ministerial working group, concluded that it is a priority to have a social safety net program for a priority. the rural area. The goal is to establish measures of income redistribution and strengthened socio- Figure 3. Structure of the Labor Force economic development with equity through which Trans. & Hotels & Mining, the vulnerable or risk group are protected. It comm., rest., 0.4% 0.2% Electricity outlines four priority areas: 1.7% & water, Constr., 0.2% 3.1% Oth. serv., Finance, 1. Rural infrastructure development. 6.6% 0.1% 2. Resettlement, agricultural land allocation and Manuf., 7.3% establishment of permanent economic activities for vulnerable or at-risk groups 3. Improving living conditions of rural people. Trade, 4. Protection of and support for vulnerable 9.5% groups, including establishment of social safety nets. Agri, forestry or Because of the complexity of the issues the fishing, development of social safety nets will rely on 71.0% cooperation and coordination between a variety of ministries and development partners. In particular, Source: Lao Expenditure and Consumption Survey 2007/8, the majority of workers in Lao PDR earn their SSN Options Worldwide income from agricultural work (Figure 3). As a result the MOLSW, in coordination with the A range of social safety net instruments have been Leading Board for Rural Development and Poverty implemented in low income countries worldwide. Eradication, has developed a strategic plan for social Although the mix varies by country, these welfare development for the period of 2011- 2020. interventions can be grouped into a number of The plan outlined the following five priority common types: activities: Unconditional transfers: Households don‟t have 1. Assist vulnerable groups with resettlement, to do anything in return for these transfers, but they are generally targeted at the poor and vulnerable. agricultural land allocation. These schemes may provide cash (UCTs), as in Sri 2. Enable vulnerable groups to access social Lanka, in-kind transfers such as food, or vouchers. services such as education and health care by Food transfers are often provided during disaster establishing education fund and free health relief, or as part of a school feeding program, such care. as in Cambodia. Conditional transfers: In exchange for receiving 3 Document titled “Options for Strengthening Social transfers households must comply with certain Protection and Safety Nets in Lao PDR�. This document conditions, usually connected to investment in was prepared for the Public Works conference in human capital, such as enrolling their children in Tanzania, June 2010. 3 school or attending a health centre. Conditional Cash Transfers (CCTs) have been proven to Third, building the skills of people to deal with improve enrolment and other outcomes in many managing their incomes, helping them to smooth countries. Transfers may be provided in-kind. consumption year round, would help them to deal with both seasonality and income shocks. Fee waivers: Poor households are often provided with exemption from paying fees for schooling, Fourth, new SSN projects should build on existing health or other essential services, in order to experience, start at a small scale, and be tested in prevent them sacrificing human capital investment order to build capacity within the MOLSW and when hit by shocks. ensure that in the future they will be able to scale up and implement similar schemes to respond to Commodity price subsidies: In some countries the natural disasters and other vulnerabilities. prices of basic commodities such as food and energy are subsidized as part of a social safety net. Concluding Remarks and Next Steps International experience has shown that subsidies This Policy Note reflects what the government of are not very effective in reducing vulnerability, and Lao PDR and the donor community, including the many of the benefits go to wealthier households. World Bank, identified as viable options for strengthening the social safety net system in the Public Works/Workfare/Temporary country. As a result, the government asked for Employment Programs: These schemes provide donor support to improve its technical, temporary employment at low wage-rates to unskilled manual workers on labor-intensive institutional, and financial capacity to design, projects (e.g. road construction and maintenance, implement and administer an SSN project in order irrigation infrastructure, reforestation). They to tackle poverty and vulnerability in the country. provide income support to the poor at critical times, helping them to cope with systemic and This Policy Note concludes by outlining three areas idiosyncratic shocks, and lack of food during low of focus that the World Bank, as one of many seasons. PWPs can also facilitate the construction donors in Lao, commits to doing in the near future or rehabilitation of basic essential infrastructure in in order to help the country continue to address its very poor areas, improving productivity and priorities. The World Bank will: reducing vulnerability in the long term. These schemes have been successfully implemented in 1. Continue with further analytical work on the many developing countries. causes and outcomes of poverty and vulnerability in Lao. 2. Investigate issues that arise in the targeting of SSN Options for Lao PDR existing government programs, using national When considering SSN options for rural Laos, it is household survey data and other sources. be important to keep four principles in mind. 3. Support the government of Lao PDR in continuing its efforts to strengthen the SSN First, agriculture provides livelihoods for about 70 systems in the country by helping it design, percent of households in Lao PDR. Most remain implement, and evaluate new projects that dependent on low productivity subsistence farming. incorporate new features. Any intervention addressing vulnerability and poverty in rural Lao must address issues related to References agricultural productivity, supply side issues of food 1. World Bank (2010), Vulnerability and Safety security, and reducing climatic vulnerabilities. Nets in Lao PDR: A Policy Note, World Bank. Second, few income earning opportunities exist in 2. Department of Statistics, Lao PDR and World the rural area and only few households earn wages. Bank (2009, forthcoming), Poverty in Lao PDR As a result, households have no means to make or 1992/3-2007/8. save money for the difficult months. On the other hand, households have spare labor capacity at 3. World Bank (2008), Vulnerability in Lao PDR - certain points of the agricultural calendar. Most Why Location Matters More than Wealth, struggle to achieve food security, particularly unpublished draft. during the agricultural low season. 4 Appendix 1: Summary of Workshop Presentations 1. World Bank: Poverty and Vulnerability in Lao PDR: An Overview (Ms Nina Fenton, WB, Vientiane Country Office) The presenter provided a comprehensive overview of poverty and vulnerability in Lao PDR. While poverty in Lao PDR has fallen steadily since the 1990s, some groups, particularly those living in the most remote rural areas, are still lagging behind. In addition, both poor and non-poor households often face shocks. In Lao PDR the main shocks are related to agriculture- floods, droughts and pest infestations are some common examples- or to illness or death of a household member. "Economic" shocks such as unemployment or increases in food prices are less important at the moment, as many households are not well linked to markets. But they may become more significant in future. If households are affected by shocks, some risk falling into poverty, or falling further into poverty. This decrease in welfare can be temporary, but in many cases it can have negative long term effects and even lead to poverty traps. Households who face shocks that they have limited capacity to cope with can be defined as vulnerable. Evidence suggests that many Lao households are highly vulnerable and have limited access to formal safety nets. Social safety nets are non-contributory transfers, targeted in some way at the poor and vulnerable. These could be an important tool for helping these households to avoid and cope with shocks. This could in turn help fight poverty and encourage economic growth. 2. Current Social Protection Work by the Ministry of Labor and Social Welfare ( Mr Prasong Vongkhamckanh, Mr Pracit Dethphommathe, and Mr. Phouvanh Chanthavong) There were three presentations from the MOLSW; a summary of all three are presented here: The formal Social Security Systems operating in Lao PDR and their coverage of public and private sector workers, and plans for expanding the coverage of the social security schemes including integration of existing health insurance schemes. There are plans for labor management and skill development for Lao workers aiming to encourage job creation in rural areas, increase skills to meet regional and international standards, improve labor market information and improve employment services. The MOLSW aims to develop and up-grade skills, knowledge, ability, experience, vision and discipline for Lao workers to obtain the right jobs. There are current policies and planned mechanisms to facilitate assistance for victims of natural disasters and human trafficking, street children, disadvantaged people and the poorest groups. MOLSW has developed the legal framework for labor and social welfare programs. They have also prepared a strategic plan for social welfare development for the period of 2011- 2020. This plan identifies key areas for implementation during 2011-2015 including: a) Strengthening the social welfare system so that it is able to provide social security and relief consistently and effectively; b) Developing and improving social relief management network to facilitate and provide faster and more effective assistance to poor and underprivileged people and those affected by disasters; c) Establishing emergency preparedness and response mechanisms nationally, including emergency relief provision and infrastructure reconstruction projects for affected communities; d) Developing mechanisms to protect the rights and interests of children and prevent human trafficking activities effectively; e) Developing the network of social protection provided to disabled and old-aged people so that they receive care and assistance from families and society by creating opportunities for public services. MoLSW has relied on extensive cooperation with development partners and NGOs to provide social welfare assistance and emergency relief through the implementation of various projects including Food for Work, 6 SOS centers and 1 Peuan Mit Center for vulnerable children, 3 centers for receiving and assisting women and children affected by human trafficking and the clearance of UXO. The Social Welfare Department (SWD) is currently preparing a decree for the organization and management of social welfare assistance for vulnerable groups. 5 3. Leading Board for Rural Development & Poverty Eradication: Measures on Strengthening Social Safety Net in the Fourth Rural Development and Poverty Eradication Plan for 2011- 2015. (Mr Syvixay Xaysanavongphet, Vice Chair , National Leading Committee for Rural Development and Poverty Reduction) The NSEDP 2011-2015 aims to decrease poverty to less than 19% of the total population and 11% of total households in the country by 2015. Poor villages all over the country will be the main targets and priority for rural development and poverty reduction. The 4th Rural Development and Poverty Eradication Plan supports the achievement of these goals through 4 key strategies.  Strategy 1: emphasizes rural infrastructure development. This will include main roads of districts, rural roads that connect with priority areas and Kumban development areas, increasing irrigated areas, expanding electricity coverage to 60% of the rural population, and access to clean water to 75% of the rural population.  Strategy 2: emphasizes settlement area allocation, production land allocation, information dissemination and strengthening the capacity of local authorities. The delivery of public services to highly dispersed populations is unaffordable, so a process of village consolidation is underway to move all villages into clusters (khumbans) of viable size, coupled with targeted development of „focal areas‟. The government aims to encourage dispersed populations to group into villages, in pre-decided locations, and provide job opportunities for them to gradually reduce poverty.  Strategy 3: emphasizes improvement of living conditions and nutrition; including increasing the percentage of the population with access to potable water and latrines, decreasing infant and maternal mortality rates, decreasing the incidence of underweight children. Actions identified included nutritional food processing and consumption.  Strategy 4: emphasizes protection of and support for vulnerable groups. Social Safety Nets or social protection has been defined as a means of income and development distribution to a wider society in a universal and equitable manner, in particular, offering protection to the vulnerable and at risk groups. The actions needed include surveillance and response to disasters through social protection and social assistance for the poor, the disadvantaged and the most vulnerable in the society as the first priority. Mr Sivixay emphasized the need to strengthen collaboration among concerned sectors, especially education, health, agriculture, labor and social welfare and identify appropriate methods and measures to support access to programs by poor and vulnerable groups. An adequate budget must also be provided to properly fund programs. 4. Dept of Statistics: Measuring Poverty in Lao PDR Standards of Poverty & Development for the period 2010-2015 (Ms Phonesaly Souksavath, Deputy Director General, Department of Statistics) The National Statistics Center (NSC) has responsibility for the preparation and analysis of statistical data to support the development and monitoring of the national socio-economic development plan, including targeting interventions. Poverty data is essential for this task. It can be obtained from several sources: a) The Lao household expenditure and consumption survey (LECS) system is a multi-purpose survey approach designed to collect data on various dimensions of poverty in Lao PDR. The LECS has been conducted every 5 years- 1992/3, 1997/8, 2002/3 and 2007/8. It covers a representative sample of the Lao population- 8296 households in 2007/8. b) Village-level statistics collected through village books each year. Data from the village book system may be considered less accurate than the LECS survey, but cover the whole country and can used for annual follow- up of the poverty situation between surveys. 6 c) The census, last carried out in 2005, collects information that can be used in conjunction with the LECS data to generate estimates of poverty rates. Poverty can be assessed using one of two poverty lines. One corresponds to a level of consumption expenditure (including consumption of own-produced goods) sufficient to buy 2100 calories of food per person per day, plus an allocation for non-food goods. The other is a line defined to allow the purchase of about 16 kilograms of milled rice per person per month; the balance is insufficient to cover other necessities, such as clothing, shelter, schooling and medical costs. These data are used to target spending in order to have the maximum impact on poverty. In 2004, the 47 poorest districts according to the national poverty line were identified as the focus for development in the National Growth and Poverty Eradication Strategy (NGPES). Since this initial poverty assessment, the 2005 census data and results from other government surveys indicated that poverty was still high in the 47 poorest districts. However, there are also many poor people, in absolute terms, in the non-poor districts. In order to improve targeting, therefore, The GoL Decree 285/PMO (2009) not only updated the poverty line to account for inflation since 2001, but also sets standards for identifying poor villages as well as poor districts, and criteria for assessing model developed villages and districts. These criteria are based not only on income/consumption poverty but also on education and literacy indictors, access to basic infrastructure and services and average incomes of households. This indicates a shift to inclusion of all districts in Lao PDR in targeting, not only the previously identified 47 poorest districts. This shift in thinking was confirmed by Mr Sivixay, who added that the GoL is currently considering expanding the Poverty Reduction Fund to become a nationwide program. 5. WB: Poverty, Vulnerability and Safety Net approaches in low income countries: An overview. ( Mr Kalanidhi Subbarao, SSN Expert, WB) A range of social safety net instruments have been implemented in low income countries, some of which have already been tried in, or may be appropriate for, Lao PDR. Public Works Programs (also known as workfare programs), similar to the Food for Work schemes implemented by WFP, may be a particularly appropriate option. These provide temporary employment at low-wage rate to unskilled manual workers on labor-intensive projects such as road construction and maintenance, irrigation infrastructure, reforestation, and soil conservation, and more. These provide income support to the poor at critical times, helping the poor to cope with large-scale shocks such as floods, droughts, economic crises, with lack of food during the low season, or with households specific shocks, like illness or unemployment. PWPs can also facilitate the construction or rehabilitation of basic essential infrastructure in very poor areas, improving productivity and reducing vulnerability in the long term. The presenter suggested a number of steps involved in designing a Social Safety Net program or instrument that should include; setting goals (objectives); developing an implementation structure, including institutional roles, responsibilities & partnerships; developing mechanisms for targeting, outreach, enrolment, and payment and establishing a credible monitoring and evaluation system. However, as well as identifying the appropriate programs, it is also important to work towards developing a national safety nets system. There are several steps needed for this process: a) An overall strategy is needed that identifies major risks and vulnerable groups. It is necessary to collect and analyze data (household surveys and qualitative studies) and also review existing programs and identify gaps in coverage. b) Then the options for instruments to address each of these gaps should be reviewed and the available financial resources identified. c) The responsible institutions‟ capacities and weaknesses need to be assessed in order to implement and manage the SSN programs at local and national levels. 7 d) Often countries choose a combination of instruments to cover major risks and groups but it is necessary to “weave� different programs / instruments together into a coherent system. In a poor country with limited capacity, it is more likely to start with few safety nets but build up social insurance over time. 6. WFP: Food Security &Asset Creation (Mr Adam Folkard, Livelihood Development Consultant, WFP) The largest social safety net programs currently active in rural areas are implemented by WFP, in partnership with the MoLSW and other partners. Social safety net project include relief food distribution in areas hit by natural disasters and Food for Work (FFW). Nearly 55,000 villagers participated in the FFW activities in 2009 in 12 Provinces. Although in the past WFP has focussed on distributing food, WFP is piloting Cash for Work (CfW) on a small scale in six communities in Xay and Beng districts of Oudomxay Province, in partnership with German Agro Action (GAA) and Oudomxay Community Initiative Support Project (OCISP)).4 The wages were transferred using the Lao Postal Service (LPS), which is active in most districts of Lao PDR. WFP signed a Memorandum of Understanding with the LPS, enabling the villagers to collect their payment at the district post office. Most workers received between 0.5-1.5 million kip (US$60 – US$190). The pilot evaluation findings were that cash delivery costs were only 1/3 that of food, including payment of transport allowance (30,000 kip), and that payments could be received faster than food (in 3 weeks or less). 90% of households reported women‟s control over cash received in household, however over 50% of CFW income was used for debt repayment as most households had incurred cash &/or rice debt over the wet season Only 5% of interviewees reported a preference for rice over cash as payment means. 7. UNICEF: Child-Sensitive Social Protection - Joint Statement and planned initiatives in Lao PDR. (Ms Mizuho Okimoto-Kaewtathip, Social Policy Specialist UNICEF Lao PDR) In light of the Joint Statement on advancing Child Sensitive Social Protection (CSSP), UNICEF will undertake a review of the implications of existing social protection mechanisms on children in Lao PDR. MPI is their key counterpart due to the broad scope of CSSP. UNICEF will also work closely with NCMC and involve key line Ministries, especially MoLSW. UNICEF aims to present their preliminary findings through joint workshops with partners in mid-July 2010. 8. UNCDF: Social Protection In Lao PDR: Proposed Social Protection framework and policy- relevant piloting at the sub-national level (Ms Jill Engen, UNCDF Regional Office, Bangkok) The UNCDF presenter proposed the development of a Social Protection Framework and Policy relevant for piloting at the sub-national level, focusing on the development of technically sound options for piloting local- level management and implementation of social safety net (SSN) programs. This is relevant because the role of local government in service delivery and SSN administration is expected to increase in line with the government‟s direction for decentralization. Many Local Governments are already able to manage basic infrastructure and service delivery, and in a largely participatory and accountable manner. The District Development Fund (DDF) strategy has helped improve access to basic services, markets and other facilities. Moving forwards, the GPAR/SBSD DDF component intends to pilot the allocation of conditional block grants (SPBGs) to finance safety net programs. These will be implemented at the district level. The pilot will test out and strengthen district level abilities to assume greater financial and administrative responsibilities for safety net programs aimed at the ultra-poor. UNCDF/UNDP further proposed the establishment of a Social Protection Technical Working Group. 9. Group Work Exercise 4 This shift is in line with global WFP strategy. 8 Following brief comments from participants and a summary by the facilitator, participants were divided into two discussion groups. One group was made up of representatives of the INGO/Donor Community (DP), the other group comprised government practitioners and policy makers (GOV). The groups were requested to consider a range of issues relating to Social Safety Nets in Lao PDR using a matrix format, and to present their analyses, assessments and recommendations. The proposed focus questions for the groups to consider were: 1) What are the relevant current or planned programs / approaches to be included? 2) What are the key gaps / issues in these programs and approaches in terms of: a) Risks / shocks covered? b) Vulnerable groups reached (targeting and coverage)? c) Geographic focus and coverage? d) Timeframe (short-term or long-term)? e) Implementation challenges? 3) What are possible programs / approaches to address these gaps / issues? 4) Which government agencies should be responsible for implementation and at what level? (GOV group) or 5) What opportunities / approaches are there for coordination of assistant in support of the development of capacity of an institutionalized SSN system? (DP group) For each question, the groups further had to consider how cross-cutting issues such as gender, ethnicity and child- sensitivity could be addressed. Following the group exercise, each group presented their findings and recommendations and time was allowed for questions, comments and clarification on each topic. The findings and recommendations made by the groups for each issue are summarized in the social safety net table provided in Annex 4 of this report. Key Findings from the Group Exercise The workgroups identified program gaps and potential opportunities for cash transfer programs in three main areas of vulnerability: i) major economic risks of (seasonal) under� and un� employment; ii) risks of childhood malnutrition, pregnancy related women‟s malnutrition, low birth weight, and potential risk of negative birth outcomes for mother and child; iii) low survival rates in primary school with poor transition to secondary education. The groups highlighted significant gaps in the current social protection system and identified considerable opportunities for various SSN programs that could be used to fill these gaps. Capacity building and MIS were identified as key constraints to rapid implementation of SSN programs in the near future. The main recommendations raised during plenary discussions were:  The government should incorporate the role of Social Protection and SSNs into the 7th 5 year plan 2011-2015 to reduce poverty and achieve MDGs;  The government should formulate a strategy for the development of Social Protection, including SSNs, for Lao PDR;  MLSW should pursue policies that promote Social Safety Nets for poorest and most vulnerable people;  Technical, financial and institutional capacity constraints limit MoLSW administration of some social protection programmes;  The INGO and donor community should coordinate social protection activities, including SSNs, and also support the development of a social protection strategy in Lao PDR;  Further work is needed to identify the available financial envelope and this could be raised as part of the Round Table process;  Further discussions should be held to consider the Social Safety Net options identified during this workshop. 10. Closing Remarks from the Workshop 9 Mr Pracit Dethphommathe and Mr Magnus Lindelow, co-chairs of the workshop provided the closing remarks. The 7th national socio-economic development plan (NSEDP) will set out the development strategy for achieving socio-economic development in Lao PDR and the priorities for public expenditure by the government for the next 5 years. Currently, the system of formal safety nets in Laos is very limited with the social security system covering only the public sector and a small number of formal private sector workers. There is an opportunity to utilise Social Safety Net mechanisms to support the achievement of the government‟s goals to reduce poverty and reach the MDGs. For example, the use of temporary employment programs, such as CfW projects for poorest households to receive income support during the low season or as part of recovery from natural disasters or shocks. Social Safety Net mechanisms can also link to access to basic services: e.g. linking cash transfers to education on child and maternal health, prevention and treatment of illness, and improved nutrition; agricultural extension or immunization. Further consideration should be given to identify sustainable funding for social protection from both domestic and external resource mobilization, in particular resources that can facilitate scaling up of effective interventions. A comprehensive national social protection strategic framework is important for developing a holistic social protection strategy for the country. This framework is important for pulling together fragmented policies and for developing fully costed implementation plans that can be used for resource mobilization. While the primary responsibility for social protection lies with MoLSW, it acts in close collaboration with other government and non-government stakeholders. Strong inter-ministerial collaboration and co-ordination is needed among all the ministries and stakeholders that are involved in the implementation of a social protection strategy (i.e. ministries of labor and social welfare, health, education, agriculture, finance and economic planning and others) at national, provincial and district levels. Better inter-sectoral coordination and collaboration on social protection is need among relevant development partners and NGOs. Mr Pracit Dethphommathe, as co-chair for the workshop, thanked all participants for their meaningful contributions during the workshop which had provided useful and important information regarding poverty and vulnerability in Lao PDR and identified the opportunities for developing social safety nets to support vulnerable groups. He noted the need to make the social protection and social safety net framework more comprehensive and consult with more stakeholders to complete more of the social protection gaps and opportunities. He observed that within MoLSW, and among other ministries, there was a need for improved MIS to gather feedback and review existing social protection programs in order to improve and expand coverage and effectiveness. He also gratefully acknowledged the support received from World Bank and other Development partners, especially WFP, UNDP, ILO, UNICEF and UNCDF, who worked tirelessly side by side with Government of Lao PDR. Mr Pracit Dethphommathe expressed his wish to see the development of effective social safety nets and a comprehensive social protection system for vulnerable groups to achieve MDGs and the poverty reduction goals for Lao PDR. 10 Appendix 2: Workshop Agenda Start Description Speaker 8.15 Registration 8.45 Opening remarks Mr Pracit Dethphommathe, Director, Social Welfare Department, MoLSW Mr Magnus Lindelow, World Bank 9.00 Poverty and Vulnerability in Lao PDR: An Ms Nina Fenton (WB) Overview 9.30 Development of social security in Lao PDR Mr Prasong Vongkhamckanh Mr. Phouvanh Chanthavong Director General Skills Development and Employment Promotion Department Social Welfare Department Mr Pracit Dethphommathe Director General Social Welfare Department Measures on Strengthening Social Safety Net Mr Syvixay Xaysanavongphet in the Fourth Rural Development and Vice Chair Poverty Eradication Plan for Five Year National Leading Committee for Rural (2011-2015) Development and Poverty Reduction Measuring Poverty in Lao PDR Standards of Ms. Phonesaly Souksavath poverty & Development Deputy Director General For the period of years 2010-2015 Department of Statistics 11.30 Poverty, Vulnerability and Safety Net Mr. Kalanidhi Subbarao (WB Social Protection approaches in low income countries: An Consultant) overview. 13.30 Food Security &Asset Creation WFP Child-Sensitive Social Protection Joint UNICEF Statement and planned initiatives in Lao PDR Social Protection In Lao PDR: Proposed UNCDF/UNDP Social Protection framework and policy- relevant piloting at the sub-national level Summary Facilitators Ms Fiona Howell (WB Social Protection Consultant) and Mr Bob Group work – break out 16.00 Group reporting back presentations Summary 17.00 Closing remarks Mr Pracit Dethphommathe, Director, Social Welfare Department MoLSW Mr Magnus Lindelow, World Bank 11 Appendix 3: List of Participants Organization Name and Surname Position Department Government MOLSW Dr. Bounma SITTHISOME Deputy Director General Skills Development and Employment Promotion Dept MOLSW Mr. Khamkhane Director General Labour Management Dept PHINSAVANH MOLSW Mr. Pasith Director General Social Welfare Dept DETHPHOMMATHET MOLSW Mr. Prasong Deputy Director General Social Security Dept VONGKHAMCHANH MOLSW Ms. Vanxay Souvannamethy Deputy Director General State Authority for Social Security MOLSW Mrs. Buaphanh LIKAIYA Director General Pension, Invalid and Handicap Dept MOLSW Mr. Souphonexay Deputy of Division Division of Social Welfare LOPHAENGSY MOLSW Mr. Phosavanh Technical Officer Division of Social Welfare THAMMAVONGXAY MOLSW Mrs. Monethong Inthavong Vice head of Division Planning and Administration Division MOLSW Mr. Khamphouang Director Social Security Organisation INTHASENG MOLSW Mr. Vilaphanh Technical Officer International Relations and KHANTHAVONG Cooperation MOLSW Mr. Oudone Ounnaphao Head of Division Instrument and Information Division Dept of Ms Bounpheng Director Statistics NLCRDPR, Mr. Sivixay Saysanavongphet Vice Chair National Leading Committee PMO for Rural Development and Poverty Reduction PRF Mr. Sengphet Vannavong Head Community Development MPI Ms. Phonesaly Souksavath Deputy Director General Department of Statistic MOF Mr. Somxay Keovandy Technical Officer External Finance Department MOE Dr. Keomany Sisaykeo Head of R&D Division Technical and Vocational Education Department CCOP, PMO Mr. Vilaphanh Silitham Deputy Director General Central Committee Organization Party PACSA, PMO Mr. Nisith Keopanya Director General & GAPAR Civil Service Management SBSD NPM 12 Development Partners WFP Adam Folkard Livelihood Development FfW/CfW pilot programs Consultant WFP Jean Duclos Head of WFP Sub-Office Oudomxay Province UNDP Robert Glofcheski Economist Vientiane UNDP Makiko Fujita Social Policy Specialist Vientiane UNCDF Jill Engen Regional Specialist Bangkok UNICEF MizuhoOkimoto-Kaewtathip Social Policy Specialist Vientiane UNICEF Victoria Juat Chief of Child Protection Vientiane ILO Kolakot IPEC Program Officer ILO IPEC Project ILO Rakawin Leechanavanichpan Program Officer, Lao PDR ILO Sub-Regional Office for East Asia UNCDF Thilaphong Oudomsine Lao Programme Specialist UNDP/UNCDF Governance Unit The World Bank Team WB Magnus Lindelow Senior Economist WB Nina Fenton Research Analyst WB Kalanidhi Subbarao Expert in social safety nets WB Ximena V. Del Carpio Economist WB Zhang Lansong Operation Analyst WB Fiona Howell Expert in social safety nets WB Sophavanh Thitsy Program Assistant WB Helene Carlsson-Rex Senior Gender Specialist, Task Team Leader PRF 13 Appendix 4: Summary Table Options for Social Safety Nets in Lao PDR Risks /shocks Vulnerable groups Current programs / Key gaps / issues Possible SSN approaches GoL/Agencies approaches implementing PR/SP 5programs Natural disasters All affected  Food-for-work / Cash-for- Slow or delayed response Expand / scale up existing CfW/FfW MOLSW (floods, droughts, households, in work Low coverage Focus CfW/FfW on DRR projects NLBD+PR crop destruction, particular poor and  Disaster relief Data collection difficulties Extend coverage to all affected households WFP etc.) near-poor  Traditional family and village Logistics gaps in disaster affected Use WFP vulnerability maps Int. Red Cross support system areas UNICEF - CPN6 Local government (DPI + district and kumban) Seasonality Most farming • Food-for-Work Limited coverage Expand PRF public works (e.g. irrigation) MAFF and IFAD (lack of income and households, in • Rice Banks Few days of employment IFAD capacity building MOLSW food shortage) particular poor and • Village banks provided Temporary Employment programs - PRF near-poor in • Loans through money lenders Slow response gender assessments required MPI / DPI (PRF & agricultural low season Sales of assets Data collection gaps (wage info coordinating role) (most severe May- and farm productivity) Sept) Illness or injury All households, in  Health equity funds / Informal sector largely uncovered Expansion of existing schemes to rural Local government particular poor and vouchers / cash-incentives in formal schemes, especially areas (district and kumban) near-poor (CCT) rural areas Targeted Cash Transfers for poorest and MoH  Social security for formal Difficulties identifying poorest chronically ill households MoLSW sector (health and sickness) households Expanded / improved micro-finance  Village Revolving Funds Small-scale (inadequate coverage health care exemptions for very poor (VRF), village funeral funds of benefits and beneficiaries) CCT for children‟s access to health care and Village Banks Inadequate registration and (including prevention)  Traditional village support targeting mechanisms systems Inability to work The elderly, persons  Traditional family and village Few programs Cash transfers for supporting activities for MOLSW (lack of income) with disability, support system Limited data CfW of FfW projects(cooking lunch for MOE landless / relocated  Pensions for formal sector Additional stress on poor workers, maintaining vegetable gardens), MOH households CCTs for access to health and education Local government (district and kumban) 5 PR/SP = Poverty Reduction or Social Protection programs 6 Child Protection Network 14 Risks /shocks Vulnerable groups Current programs / Key gaps / issues Possible SSN approaches GoL/Agencies approaches implementing PR/SP 5programs Price fall / increases Households that buy / Traditional family and village Lack of information and analysis Provide market information to farmers MAFF sell products affected support system Food/Cash transfers for most vulnerable Min. of Trade by price changes7 Price controls for fuel and some groups MLSW . food items Loss of employment / Households that Traditional family and village Support very poor to upgrade CCT for basic skills training MoLSW remittance income depend on labor support system skills to meet labor markets IOM income, in particular demands ILO poor, e.g. garment MoE sector and migrant workers Chronic poverty Households with  Community grants for village Linking supply and demand side Ffw and CfW and incentives at village MLSW (due to lack of unskilled / illiterate infrastructure (PRF / DDF) e.g. infrastructure / transport level to support implementation of village Local government education, workers  School feeding / Cash for plans (district and kumban) community assets, Households with many Training Capacity building for local DPI access to markets and children  Traditional family and village government and communities Improve MIS and data for targeting and NLBRD&PE services) Households in remote support system registration communities  Violence / abuse / Women and children  Shelters Small scale, limited coverage CCT for child protection for migration MLSW abandonment /  Orphanages related issues UNICEF – CPN trafficking  Traditional family and village ILO support system IOM LWU Maternal and infant At risk pregnant women  Maternity waiting homes Small scale, limited coverage CCTs for pre and post delivery care, MoH morbidity / mortality and infants  MCH and child nutrition immunization, nutrition/breastfeeding WB programs UNFPA  Traditional family and village UNICEF support system 7 In 2009 the global price of rubber fell from $3.50/kg to $1.40/kg (Country Report On The Impact Of The Global Economic Slowdown On Poverty And Sustainable Development In Lao PDR) 15