The United Nations started in July 2006 a joint project of its Development Programme UNDP and its Industrial Development Organization UNIDO to promote private sector development in the Lao People’s Democratic Republic by strengthening chambers of commerce and industry and business associations. Private sector development is recognized as the engine of growth that is essential for poverty reduction. The project strategy is based on the premise that strong and functional business membership organizations (BMOs) are essential for the development of a vigorous private business sector.

The Lao government has recognized the importance of private sector development. Both in the long-term goal of rising from the ranks of one of the world’s least developed countries by 2020, and in the five-year National Socio-Economic Development Plan for the period of 2006-2010, support of private sector growth is a top priority.

The Lao National Chamber of Commerce and Industry (LNCCI), key partner in the project, is undergoing an important transition from a state-supported entity to an independent, self-financing association. This change in status and funding arrangements necessitates a major restructuring of the chamber.

Achievements 2006-2008

During the first project implementation phase, efforts concentrated on improvements of the legal framework for chambers and business associations. LNCCI succeeded in obtaining from the government the right to draft a new Prime Minister’s Decree on business membership organizations (BMOs), the first legislative document ever drafted by a non-government organization in Laos.

Global Chamber Systems

Global Chamber Systems

The LNCCI Draft Decree is currently (May 2008) under discussion among legislative and government authorities, and expected to be signed by the Prime Minister in summer of 2008. It implies the transition from a state chamber system to a continental system where a network of strong chambers and business associations serves as

  • platform for opinion-building and democratic decision-making within the business community
  • platform for the self-administration of the business community, increasingly taking over administrative tasks from the government
  • respected, effective, and independent advocate of business interests in legislation and the definition of government policies and strategies
  • provider of good services according to the needs of the business community.

To be ready for the transition and its new role, LNCCI is preparing new articles of association and other internal by-laws. The structure of decision-making organs and the organization of full-time support staff are under review.

In the process, UNDP and UNIDO provide training and advice on international best practice, for example in

  • chamber and association management
  • drafting legislative documents
  • advocacy techniques
  • optimization of organizational structures
  • introducing and improving member services
  • income generating activities
  • public-private sector dialogue
  • economic research and development analysis.

Objectives 2008-2010

After the basic legal preconditions have been established, the project will intensify efforts to strengthen management capacities of LNCCI, provincial chambers of commerce and industry, and business associations, to strengthen their services to businesses, and to strengthen their analytical and advocacy capabilities.

Project activities in the second half of implementation will focus on

  • improving the physical preconditions at LNCCI to provide good services both to direct members and to the other BMOs:
    • membership service center
    • business library for members
    • online support system for BMOs
    • training and consulting center
  • cooperating with other donors’ activities in capac-ity-building at selected provincial chambers and business associations:
    • BMO management training
    • SME entrepreneurship training
    • business development services
  • further improving the qualification and skills of leaders and full-time staff of LNCCI according to the new role:
    • policy think tank, advocacy, and committee management
    • planning, implementation, and marketing of statutory and market services
    • BMO branding, information services, and public relations
    • continuous rejuvenation of elected leadership organs.

UNDP and UNIDO are currently increasing joint fund mobilization efforts, to better support LNCCI and the Lao business community in completing the successfully initiated transition, and to contribute significantly to the country’s long-term economic development goal.