In Lao PDR, the recent influx of foreign direct investments (FDI) has accelerated GDP growth, contributed to government revenues and is a force for reducing poverty. However, the FDI, especially in the agricultural and forestry sectors, are at the origin of rapid land use change. There is an increasing pressure on natural ecosystems, the traditional “safety net” of rural populations. Land concessions are often allowed in areas where development projects had enabled the villagers, including poor ethnic communities, to increase their performance. Thus land concessions very often are threatening development achievements, and do not offer valuable alternative to rural poor.

The Poverty-Environment Initiative (PEI) Phase II has the objective to strengthen capacity of targeted central and provincial authorities to integrate poverty and environment concerns in development planning for sustainable and inclusive growth.

PEI contributes to two of the UNDAF/Country Program outcomes: outcome 1 “By 2015, more equitable and sustainable growth promoted for poor people in Lao PDR”; outcome 8 “By 2015, the government and communities better adapt to and mitigate climate change and reduce natural disaster vulnerabilities in priority sectors”

UNDP representation in Lao PDR

Central and Provincial government officers involved in investment strategy implementation and in Environmental and Social Impact Assessment.

PEI Phase I has been very effective in raising awareness and developing tools to manage investments. Key achievements include capacity building at provincial level, successful development of tools such as the investment database and methodology for assessing the social and environmental impacts of investments, integration of PEI criteria and principles into the 7th National Socio Economic Development Plan, and development of the Draft National Investment Strategy.