Local Governments on the Forefront of CoVID-19 in Lao PDR

  • April 06, 2020

  • Vientiane, Lao PDR


Source: © Government of Lao PDR

Repatriation to Lao PDR

COVID-19 crisis has demonstrated the effectiveness of fast local action to slow the spread of the virus. Local governments are leading COVID-19 responses around the world. They are in the frontline of citizen engagement, of service delivery and management of public space. One significant area of local government action in the Greater Mekong Sub Region is that of migrant workers in the context of COVID-19 exposure and vulnerability, economic loss, and mass repatriations into the least developed countries.

In these past weeks alone, over 700,000 migrant workers left Thailand to return to neighbour countries like Lao PDR, Myanmar and Cambodia. In Bangladesh, half a million expatriate Bangladeshi workers have returned from 15 major remittance-sending countries, where they were employed, since the outbreak of COVID-19.

Local government responsibility:

The Ministry of Labor and Social Welfare of Lao PDR is estimating that up to 1,000,000 returnees will enter Lao PDR over the next few weeks, with a majority returning home from Thailand. Although the mainland immigration points are witnessing inflows, numerous migrant workers are returning via unofficial crossing points.

In response, the Government of Laos has established seven quarantine centres, being located within provinces where official border points are located. Under the system, the Local Governments will have responsibility and accountability to ensure that these centres function and provide adequate services to assure returnee workers remain in quarantine before returning home.

The Local Governments in Laos will have a great challenge to establish and maintain these facilities whilst operating under strict fiscal and COVID-19 policies.

The Prime Minister of Lao PDR released a COVID-19 policy note (Friday 3rd April 2020) that carries specific references to the national and local governments response to addressing the re-purposing of public sector budget.

Local government finance response

Local governments have been specially mentioned in the decree having direct responsibility to:

  • Diligently collect revenue, from as many sources as possible, targeting businesses with liquidity that are not directly affected by COVID-19.
  • Local administrative organizations are to tighten its annual budget spending by reducing at least 10% its normal administrative expenses in order to allocate those funds to the ministries, public agencies at central and local levels that needed them more.
  • Further, public agencies are to be more mindful in reducing expenses, such as seminar-workshop expenses, welcoming foreign delegation related expenses, scientific think-tank contribution fund, fixed-asset expenses and other expenses.
  • The financing of new 2020 public investment projects that have been approved by the National Assembly (specifically infrastructure projects) is to be deferred to 2021. In addition, relevant public agencies are to continue assessing public investment projects whose costs exceed its real value and are deemed ineffective, for the consideration of suspension or adjusting its value accordingly.
  • Expedite the development of measures to promote commercial production.
  • Pay attention to the monitoring, medical examination and management of Lao expatriate workers in order to ensure that they adhere to the 14-day self-quarantine requirement, and issue them with necessary papers certifying that they have completed their quarantine process before they can go find work elsewhere.

UNCDF working with the Lao UNCT and the Resident Coordinator are in the process of re-purposing some of the in-country projects on fiscal decentralization, public financial management and local government investments to provide support as requested by the Prime Minister’s Office direct to provinces and Local Governments where the quarantine centres are located.

UNCDF Local Development Finance technical support has contributed a performance-based grant solution and an operational expenditure block grant that will provide the on-budget conduits for financial flows. The inter-governmental fiscal transfers (IGFTs) associated with the two grant systems will allow for pooled funding from the UN projects to be transferred directly to local government bank accounts through the national treasury systems. The government will supplement these IGFTs with public sector budget.

Source: COVID-19 Policy Note Issued by the Government of Lao PDR.