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Issue 8 - J anuary 2013

Ministry of Industry and Commerce - Department of Planning and Cooperation

MAGAZINE


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4/20Lao Trade Magazine Issue 8 - January 2013

On December 4, 2012, World Bank Board Executive

Directors approved US$4 million in grant fnancingor the second Trade Development Facility (TDF

II), co-fnanced with a Multi-Donor Trust Fundo about US$10 million with contributions romAustralia, the European Union, Germany, and

Ireland.

The new support builds on important progressmade under the frst Trade Development Facility,

which is expected to be completed by March2013. TDF II aims to contribute to achieving the

Governments objectives o maintaining strongand equitable economic growth, as outlined in the

Seventh National Socio-Economic DevelopmentPlan.

The main development objective o TDF II is tosupport the implementation o the Governments

Trade and Private Sector Development Roadmap2012 DTIS Update. The project will contribute

to the achievement o specifc outcome-levelchange indicators, across the three core pillars

o the 2012 DTIS Action Matrix/Roadmap: i) aconducive trade and investment environment

established; (ii) improved competitiveness, qualityand value o the agricultural, manuacturing andservice sectors; and (iii) an improved aid-or-trade

governance ramework or mainstreaming tradeand private sector development.

1. Project Components

The project includes three main technical

components: Trade Facilitation, Trade Policy andRegulations; Diversifcation and Competitiveness;

and Mainstreaming Aid-or-Trade.

(A) TRADE FACILITATION, TRADE POLICY ANDREGULATIONS

This component builds on the success o tradeacilitation and trade policy activities under TDF-

1, and will consist o a number o inter-relatedactivities aimed at improving transparency,

predictability and lowering associated compliancecosts or traders. International evidence strongly

suggests that high trade costs trade act as a majorbrake on investment, particularly in the type o

diversifed trade that has greatest potential toacilitate equitable growth, generate jobs and

reduce poverty.

Trade acilitation activities will ocus primarily

on improving inter-agency coordination andsupporting the adoption o modern risk-based

approaches to managing regulatory compliance

in non-customs agencies, including reormo non-tari measures. Investment fnancedunder this component will be closely linked to

and complement broader customs reorm andmodernization eorts, including the ongoing

Customs and Trade Facilitation Project and theproposed Lao National Single Window SupportProgram, fnanced by the World Bank.

The trade policy aspect o the project will ocus

on the provision o essential and continued

technical assistance in support o WTOaccession-related eorts, but progressivelyshiting to a beyond WTO agenda ocused on

eective implementation o goods and servicescommitments at both the WTO and ASEAN levels,

including a strong emphasis on private sectorengagement.

Component A1: Trade acilitation support

This will include three main subcomponentsbuilding on results achieved under TDF-1,

with activities ocusing on: (i) trade acilitationsecretariat and action plan implementation

support; (ii) capacity building or managers intrade-related agencies; and (iii) trade portal

support and development.

Component A2: Non-tarif measures review and

rationalization

The proposed non-tari measures (NTM) activitiessimilarly build on ongoing government eorts to

streamline, simpliy and harmonize non-customs

border agency processes. Activities will include:(i) classiying, reviewing and streamliningdomestic NTMs; and (ii) assessing NTMs aced by

Lao exporters.

Component A3: Trade in services

Lao PDR has undertaken, and will continueto undertake, a number o reorms aimed

at reorming and liberalizing the economy,including on services trade. This componentwill complement these eorts by strengthening

the governance o the regulatory environmentaecting services trade. Activities will include: (i)

enhancing regulatory capacity in services trade;and (ii) improving access to services regulations.

Overview o the Second Trade Development Facility

By: National Implementation Unit,The Department o Planning and Cooperation

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Lao Trade Magazine Issue 8 - January 2013

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Component A4: Trade in goods

This component will support the main challengesassociated with implementation o WTOobligations, eective participation in ASEAN,

and taking ull advantage o trade opportunitiesmade available by participation in the multilateral

and regional trading system. This will requirenew arrangements or conducting trade policy,

including improved inter-ministerial coordinationto ensure trade policy coherence and private

sector participation. Activities will ocus on:(i) strengthening trade policy coordination

mechanisms; (ii) disseminating commitmentsand building capacity on trade remedies; and (iii)urther strengthening the legal ramework or

sanitary and phytosanitary measures.

(B) DIVERSIFICATION AND COMPETITIVENESS

This component includes a new set o activitiesaiming to support private sector capacity

to improve productivity and compete ininternational markets, ocusing on the non-

natural resources sectors (particularly outsidemining and hydropower). Activities will acilitate

the more eective participation o small andmedium sized enterprises in the internationaleconomy, better skills and labor standards in the

manuacturing sector and support to womens

economic empowerment.

Component B1: Business assistance unit

The objective o this component is to support

individual frms to build their skills and experienceto become more competitive internationally. It

is the intention that Lao frms will not only beable to export more, but also that those sellingin the domestic market be able to compete more

eectively against imports, particularly withthe advent o the ASEAN economic community.

Activities will include: (i) direct consulting servicesadvising individual frms on business growth

plans; (ii) matching grants to assist individualfrms fnancially in purchasing specialized

business development services in support ogrowth plans; and (iii) rigorous impact evaluation

o services provided.

Component B2: Labor standards and

manuacturing productivity

Building on activities in the garments sectorunder TDF-1, as well as the wider experience

gained under the Better Work/Better Factoriesapproach, this component will aim to improve

productivity, competitiveness and labor standards

ocusing on the garments manuacturing sector,an industry with a majority emale workorce.

Activities will include: (i) a actory standardsimprovement scheme; and (ii) the transition o

the Garment Skills Development Centre towardsfnancial and operational independence.

(C) MAINSTREAMING AID-FOR-TRADE

This component will provide or support to thenext generation o Lao PDRs aid-or-trade

governance ramework as part o eorts to moveto a ull program-based approach or trade and

private sector development.

Component C1: National Implementation Unit,

and Trade and Private Sector Development

Working Group

A key objective o TDF-2 is building strongertechnical capacity on trade and private sector

development policy within MoIC, to supportmore eective implementation o activities, not

just those fnanced under TDF-2, but more widely

as part o a movement towards a program-basedapproach. This component will include urther

capacity investment in the NIU, including supportto its role as secretariat to the Trade and Private

Sector Development Working Group.

Component C2: DTIS action matrix/roadmapchallenge acility

A challenge acility will be established, making

resources available to support the implementationo lower priority activities identifed within theDTIS action matrix/roadmap on a demand-

driven basis. Resources will not be pre-identifedunder this component, but will remain available

to support proposed pro-poor activities on anongoing basis.

Component C3: Research and policy analysisBuilding on successul activities under TDF-1, the

objective o this component will be to supportimproved trade and private sector development

policy ormulation, and better measuremento the impact o policy. Activities will includeinvestments in: (i) research methodology and

capacity building; and (ii) the establishment oa research acility to commission high quality,

policy-relevant research.

2. Project BenefciariesThe ultimate benefciaries o the project are thefrms, entrepreneurs, employees and consumers


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applying the transaction value method and othervaluation methods by eliminating the reerence

price on the date o WTO accession.

Powers o Executive, Legislative and Judicial

Branches o Government: An Individuals andenterprises aected by any administrative action

subject to WTO provision has the right to appealto higher power. I the solution provided is not

satisactory, the individual or enterprise has theright to fle a complaint in court.

Authority o Sub-Central Governments: rom the

date o accession, WTO provisions and Lao PDRsProtocol o Accession would be applied uniormly

throughout the entire customs territory, includingits special economic zones, and other areas wherespecial regimes or taris, taxes and regulations

are established.

Anti-dumping, countervailing duties saeguardmeasures: legislation o anti-dumping,

countervailing, or saeguard measures would beestablished as soon as possible but not over fve

years ater its accession to the WTO.

Technical Barriers to Trade, standards andcertifcation: ully implement the WTO agreement

on Technical Barriers to Trade prior to 1 January2015 in accordance with the Action Plan set outin Table 18.

Sanitary and phytosanitary measures: ully

implement the WTO agreement on TechnicalBarriers to Trade prior to 1 January 2012 in

accordance with the Action Plan set out in Table19.

Intellectual Property related to Trade:

ully implement the WTO agreementon Intellectual Property related to Trade

prior to 1 January 2017 in accordance

with the Action Plan set-out in Tables20-A and B.

Policies Aecting Trade in Services:

ensure that legislation conorms with itscommitments on services contained in

the Schedule o Specifc Commitmentson Services rom the date o accession

to a period o up to seven years aterWTO accession.

Publication o inormation on trade:

ulfll publication commitments andestablish an Ocial Gazette within threeyears ater accession.

Importantly, Lao PDR does not join

some o the WTO Agreements, such as

Government Procurement and some intellectual

property agreements due to the internal capacityo the government and the countrys Least

Developing Country status. Moreover, Lao PDRcould reserve the use o subsidies on exports and

export duties.

Bilateral Negotiations

Lao PDR has completed bilateral negotiationsto determine the tari ceiling with the nine

interested Members: Australia, Canada, China,Chinese Taipei, the European Union, Japan, theRepublic o Korea, the Ukraine and the United

States o America. Even though this is was abilateral negotiation, the non-discrimination

principal is applied to all members o WTO.Initially, some other WTO members including

the Dominican Republic, Honduras, India andSwitzerland were interested in having bilateral

negotiations with Lao PDR but later withdrew.

Bilateral negotiations began ater the Lao PDRsubmitted its initial oer in 2006. Most bilateralnegotiation was held at the Working Party

Meeting in Geneva, but sometimes also inVientiane, and Lao delegates also paid visits to

Washington (USA), Canberra (Australia), and Kiev(Ukraine) or negotiations. At the fnal stage o

negotiation, there were political activities and

unocial cooperation involving some Members,including increasing email exchange.

Commitments on Goods

The bilateral partners requested the commitmentson goods such as: (i) on the bound tari rom

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importing goods rom Members, meaning thatthe applied rate necessarily rises but does not

exceed the bound taris as defned in the ScheduleConcession and Commitments on Goods; and(ii) tari protection by obviating the qualitative

restriction measures except the measures that arein compliance with WTO agreements including

provision o import licensing agreement. Inaddition, WTO Members requested that Lao PDR

reduce customs duties and participate in sectoralinitiatives, meaning that the customs duties or

some products are subject to a zero rate o duty,or example medicine, aviation and spare partand inormation technology.

The Schedule o Concession and Commitments

on Goods o Lao PDR covers 10,694 products(classifed by HS Code 2002). The average bound

tari rate is 19.3% or agricultural products and18.7% or industrial products. The rate is still

higher than the rates applied or (18.4% and10%, respectively. Most o the tari would be

implemented immediately on the date o WTOaccession and some tari items are granted atransitional period o 5 to 10 years and/or in

accordance with tari reduction under the Lao-US Trade Agreement.

O the more than 10,000 goods listed, 429 are

agricultural products and 603 are industrialproducts. The tari rate is lower than the applied

rate due to the bilateral agreement between Laoand the US ratifed by the national assembly in2005. Thereore the principle o MFN would also

apply to other Members. The agricultural productsinclude: meat, ruit, drink (alcohol, beer and wine)

and relevant processed products. The industrialproducts include electronic equipment, vehicles

and spare parts, soap, toothpaste and cosmetics.However, the tari reduction was granted to those

items under ASEAN agreement. For example, thetari bound rate rom the HS code 0101.10.00 is5% and is to be implemented on the date o WTO

accession.

Besides these products, Lao PDR reserves theright to maintain the tari rates or important and

sensitive products. These taris are higher thanthe applied rates, especially or 610 agricultural

products including rice (90% compared to theapplied rate o 5%), eggs, guava and other ruit.

The industrial products comprise o 6,550 itemsincluding steel, chemical products, clothes, spareparts and lubricant oil. Under its Least Developed

Country status, Lao PDR does not participate inthe sectoral initiatives as initially requested by

some other members.


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Analysis o trade perormance over the last twoyears indicates that there is great potential that

the 2015 trade target o USD 5.77 billion willbe ulflled. This is because the Lao economicsector has constantly expanded, with an annual

growth rate o more than 8%, particularly in themining, hydropower, inrastructure, services, and

industrial and agricultural production sectors.This rate o development has taken place during

the recovery o the world economy, which is stillaected by the fnancial crisis in the Euro zone.

The socio-economic development o Lao PDR willsignifcantly contribute to vast increases in boththe import and export o goods and services.

Due to the unique geological characteristics oLao PDR and other acilitating actors including

transportation and customary practices, it is

HSC Product descriptions Lao PDRs EXPORTS to Thailand

(in thousand US dollars)

2009 2010 2011 6m / 2012

7403.11 Copper cathodes and

sections o cathodesunwrought

229,015 308,792 498,936 284,816

2716.00 Electrical energy 92,799 272,069 455,901 224,219

4407.99 Lumber, non-

conierous nes

42,533 35,705 35,573 21,048

1005.90 Maize (corn) nes 19,888 19,757 20,747 16,948

2701.19 Coal nes, whether or

not pulverized butnot agglomerated

9,859 12,256 12,486 7,193

3105.90 Fertilizers nes,in packages notexceeding 10 kg

0 1,040 9,601 2,836

0704.90 Cabbages, kohlrabi,sim edible brassicas

nes, resh/chilled

2,931 4,357 9,402 3,421

4407.29 Lumber, tropicalhardwood nes, sawn

lengthwise >6mm

7,505 9,202 9,041 7,058

8544.30 Ignition wiringsets&oth wiring sets

usd in vehicles,aircratetc

5,130 10,163 8,224 4,269

1202.20 Ground-nuts shelld,whether or not

broken, not roastd

1,845 915 5,412 0

likely that this supply and demand o goodsand services will mostly be attached to the Thai

import and export markets. Provinces alongthe Lao-Thai border have requently organized

exchanges o delegations, product exhibitions,and business matching meetings, allowing

businesses to develop close cooperation with the

involvement o relevant public authorities in thetwo countries, which provide assistance or tradedevelopment. In addition, Lao PDRs accessionto the ASEAN Economic Community in 2015 and

the establishment o Lao-Thai riendship bridgeswill acilitate even urther the ree ow o goods

under the Single Market concept. These actorsreinorce the belie that the Lao-Thai trade target

o USD 5.77 billion will be realized by 2015.

Source: International Trade Center. www.trademap.org



However, boosting Lao exports to Thailand toapproximately USD 2.2 billion is still a challenging

and very dicult or both countries. Unlikeits imports rom Thailand, most Lao exportsto Thailand are in the orm o raw materials,

which are less processed and unsustainable,especially mineral (copper, coal) products, and

wood products. Lao PDR became a membero the WOrld Trade Organization in early 2013.

The market or Lao products will consequentlybe expanded, reducing exporters dependence

on one trading partner and enabling them to

maximize their profts by choosing their exportmarket. While this does not mean that the export

target will not be reached, Lao PDR and Thailandwill have to work harder on close consultationto fnd suitable trade promotion measures and

implement commitments under agreements andconventions signed by both countries, particularly

those under ASEAN and the WTO. This will ensurethat the development o Lao-Thai trade relations,

which already has a frm oundation, will besustained and improved.

HSC Product descriptions Lao PDRs IMPORTS rom Thailand(in thousand US dollars)

2009 2010 2011 6m / 2012

2710.19 Light petroleum

distillates nes

244,252 346,534 506,440 369,770

2710.11 Aviation spirit 81,833 115,142 164,326 0

8703.33 Automobiles with

diesel enginedisplacing more than

2500 cc

47,563 65,086 66,668 44,057

2716.00 Electrical energy 58,045 102,057 65,811 39,338

0207.14 Fowls, cuts & oal,

rozen

0 15,101 64,492 28,210

8703.32 Automobiles withdiesel engine

displacing > 1500 cc -2500 cc

42,790 53,594 51,715 7,137

8429.52 Shovels andexcavators witha 360 revolving

superstructure

24,553 30,429 50,269 27,284

8704.10 Dump trucks

designed or o-

highway use

8,612 9,884 40,730 6,089

2202.90 Non-alcoholic

beveragesnes,excludg ruit/veg

juices o headg 20.09

37,391 26,676 38,552 34,853

8701.90 Wheeled tractors nes 8,605 18,076 36,749 20,926

Source: International Trade Center. www.trademap.org

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Regional economic integration and trade

can be major levers or promoting economicdevelopment, especially or a landlocked, least

developed country like Lao PDR, which has asmall internal market. Regional trade with ASEAN

countries accounts or over 83% o total Laotrade, which indicates the relevance o regionaltrade or Lao economic development and the

opportunities that may arise rom a single market.

Lao PDR is reiterating its strong commitment to

continue its work towards an integrated, highly

competitive and prosperous ASEAN region thatbenefts its entrepreneurs and people.

Lao PDR is actively participating in the ASEANintegration process, and has already achieved

important improvements in acilitating themovement o goods into and out o the country.

Lao PDR has made considerable commitments

to become land-linked rather than landlocked.Even though there are still challenges ahead, anumber o reorms have already been successully

implemented, such as the inauguration o

Lao PDR gets ready to join the ASEAN Economic Community in

2015

a National Trade Facilitation Secretariat, the

launch o the frst Trade Inormation Portal andthe adoption o WTO- and ASEAN-consistent

legislation on import licensing.

Recalling the Phnom Penh Agenda or ASEANCommunity Building, Lao PDR emphasizes theimportance o the timely realization o the ASEAN

Economic Community (AEC) by 2015, through theprioritization o concrete key measures to address

the challenges aced in its implementation. Given

the complexity and comprehensiveness o the

AEC, CLMV countries (Cambodia, Laos, Myanmarand Vietnam), especially, are compelled to fndways to organize their scarce resources in the

most ecient and eective way to ensure thesmooth implementation o their commitments.

However, it is important to note that the increasing

economic integration within the ASEAN region is

not an independent process, but takes place inthe ramework o other regional and internationalinitiatives and global developments.

By: ASEAN Economic Cooperation Division, Foreign Trade Policy Department



The extension o ASEAN to ASEAN+3 (ASEANplus China, Japan, and South Korea) and ASEAN

+6 (plus India, Australia, New Zealand) and theenvisaged integration o ASEAN into the AEC havestrengthened and improved the political and

socio-economic power o the region as a whole,and placed the region in a more strategic position

in the global community. The AEC is expectedto promote both regional domestic demand

on the one hand and the competitiveness andattractiveness o ASEAN in the global market on

the other.

Currently, ASEAN has a combined GDP o about$1.8 trillion and total population o almost 600million.

Against this background it is the right time to

engage in a new dialogue that reects andresponds to the centrality o the East Asian region,

with ASEAN at its core, in the global economy andto respond to global challenges.

Increasing cooperation through bilateral, sub-

regional, regional and multilateral rameworks isan important step towards achieving continuous

peace and stability, which is an important

condition or the development o cooperationamong ASEAN Member States and among ASEANMember States and external partners. This has

contributed to the socio-economic developmento ASEAN Member States, including Lao PDR.

Despite Lao PDRs strong commitment to

regional and international integration andstrong reorms in ASEAN and WTO, more internal

capacity needs to be built up to ully implementall commitments. Limited human and fnancial

resources and a lack o expertise are still majorproblems. Even though the Lao economy hasexperienced strong growth at an average annual

rate o 8% over the last decade, natural resourcesare still its main sources o growth and it is prone

to external shocks. Since the introduction o theNew Economic Mechanism in the late 1980s,

Lao PDR has actively liberalized its trade andinvestment regime, largely inuenced by bilateral

and regional trade agreements. The frst challengeor Lao PDR is not to secure more market access,but to leverage economic integration as a driver

to improve the business and investment regime,whilst simultaneously expanding supply side

capacity.

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Training in Furniture Design by Using IT Application Program

and Quality Assurance

By: Trade and Product Promotion Department

On 29-30 November 2012, the Trade and ProductPromotion Department, Ministry o Industry and

Commerce, in collaboration with the Associationo Lao Wooden Industry and the Association o

Lao Furniture, organized a training session in

Furniture Design by Using IT Application Programand Quality Assurance at the Houng Thip Hotelin Savannakhet province under the support o

the Trade Development Facility project (TDF-Component C).

The training was chaired by Mr. Phouvong

Phommabout, Deputy Director General o TPPD,and co-chaired by Mr. Boundalay Khennavong,Director o Savanakhet Provincial Industry

and Commerce. The session was attended by

trainees rom the wood processing industryin Savannakhet, Borlikhamxay, Khammouane,Sekong, Champasak and Salavan provinces.

The purpose o the training was to raise

awaresness and build a basic knowledge oapplying appropriate programs or the design o

urniture or business, and to develop woodenproducts that are consistent with marketrequirements and domestic and intertional users.

Mr. Phouvong emphasized that since Lao

PDR is joining the WTO, it is very importantor Lao business to ambitiously compete with

international producers. Thereore, designand quality assurance are essential aspects o

product development to

ensure they are acceptedby domestic and

international consumers.Computerized designmeans that waste can

be minimized savingon investment costs

because it enables thevirtual visualization o

products and designs,and the ecient use o

raw materials. Qualityassurance is also essential

to ensure that productsmeet the appropriatestandards.

To be competitive in

the market, products must be up-to-date,ashionable, appropriate, comortable, and o

good quality, and producers must oer a varietyo choices. This training thereore, contributes to

Lao economic development as a whole. Woodprocessing businesses must develop and their

products must be competitive in the internationalmarket.

Even though this training was short, it was astarting point or raising awareness o the use

o IT applications in product design and qualityassurance among Lao producers.



The Sustainable Silk Production Project Supported or the

11th Lao Handicrat Festival 2012

By: Trade and Product Promotion Department

In 2012, the Lao Handicrat Association (LHA)

received fnancial support o approximately USD

28,000 rom Trade Development Facility (TDF)project to organize the 11th Lao HandicratFestival (LHF), held at Lao-ITECC rom 1 to 7

November 2012. The support unded threeactivities: promotion o the LHF to local and

internal visitors (mainly via advertisements viabrochures, banners, local radio and television,domestic and internal magazines, an updated

LHA website, and inormation or LHA members);travel and accommodation or 34 provincial

handicrat producers demonstrating productsat the estival; and unding the organization

o a seminar entitled Trends in Marketing andDesign or Handicrat Products. This seminar

was co-chaired by Mr. Somvang Ninthavong,the Director General o Trade Promotion and

Product Development, Ministry o Industryand Commerce, and TDF-Component C ProjectDirector, and Mme. Chinda Phommasathit, LHA

President. The seminar was designed to improve

knowledge and ability related to marketingamong handicrat producers. Handicratproducers also learned about trends in design

and color in the international handicrat market.

In 2012, the LHF organizing committee

encouraged handicrat producers to participate

the estival, allowing visitors to see handicratproduction processes such as sericulture romHatxayong Center. In 2012, the exhibition center

or Lao handicrat products comprised 249rooms, o which 56 were allocated to products

rom provinces, 63 to Lao handicrat committeemembers, 102 to non-members, 19 to variousorganizations, and 8 to sponsors. In addition, more

than 200 rooms were devoted to commercial andood products.

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First International Research Forum

By: The Economic Research Institute or Trade

The Economic Research Institute or Trade

(ERIT) organized the frst National Research

Forum, held on 23 November 2012 in VientianeCapital. The Forum was chaired by Mr. SantisoukVilaychaleurn, Director General o ERIT andattended by 60 representatives rom ministries

and line ministries, universities and internationalorganizations.

The Forum was

designed to developand improve knowledge

o and skills in trade and

economic research,thereby strengtheningresearch capacityrelated to trade and

the economy to meetinternational standards,

and to build researchworks linking with

policy maker sectionby using the research

works as reerence orthe related section.Research papers

presented in the orum

included: The impact o trade cost and advantageproducts or export: Lao PDR case study; The

impact o the trade border between Lao andChina on development: Reerence rom the

implementation o development in NorthernLao PDR; The impact evaluation rom ree tax

scheme under ASEAN integration or the income



o import tax; Tourism Development and Changein Luangprabang City rom a case study o Ban

Jack Village Economic and Investment Zone;Developing Competitiveness or LDC, Lao PDR

case study; and Border Development, exodusand adjustment in the special economic zone: acase study o Khuan Village, Tonpherng District,

Borkeo province, Lao PDR.

This kind o orum enables researchers toexchange their experience and improve

the research papers or uture internationalpublishing and to improve the research skills and

knowledge o junior researchers. The results oeach piece o research can be used as the basis outure planning and policy making.

18

For more details on the research papers, please contact the forum organizer at ERIT, Ministry

of Industry and Commerce.


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Vocational Training or Better Income

By: Garment Skills Development Centre

Vocational training institutions

are increasingly attracting high

school graduate students dueto the rise in the economic-social development in Lao

PDR and the need or a skilledlabor orce or big projects and

enterprises. Graduate studentsrom vocational institutionshave excellent opportunities

or an interesting businesscareer. The competences

gained can generate goodand stable income, sustainable

poverty reduction and ensuresocial security. Consequently,

investment in vocationaltraining to create a skilled

workorce has increasedrecently both in terms o governmentunding and grant support by the international

community.

The Garment Skills Development Centre(GSC) has been established to support the

Lao garment industry to deliver proessionaltechnical, management and leadership skills

and knowledge to improve the eciency andproductivity o the industry and to increase its

export competitiveness. In 2010 GSC was undedby the Trade Development Facility Multi Donor

Trust Fund, administered by the World Bank

and implemented by the Association o the LaoGarment Industry (ALGI), and supervised by the

Trade and Product Promotion Department, andDepartment o Planning and Cooperation, NIU, in

the Ministry o Industry and Commerce.

The Lao Textile industry is the biggest non-sourceindustry in Lao PDR, with around 30,000 workers

in 2011, and targeted by the ALGI to increaseto 60,000 by 2015. Exports totaled 220 millionUSD in 2011; and increase o 12.25% over 2010.

The export target is set at 500 million USD by2015. Garment manuacturing is among the 11

priorities or the Lao development sector to reachthese goals under the fve-year macro-economic

plan. This industry oers a lot o interesting jobsto start a career.

Global buyers demand has changed in recent

years. Higher quality is expected, as well as moresophisticated design and additional services.

Training and skills development to improveproductivity and quality are now essential inLao PDR . GSC addresses this issue through

consulting, vocational training and coachingor the Lao garment actories to deliver state-

o-the-art services at all levels, top-down rommanagement to workers, and includes the option

o ASEAN certifcation.

GSC training solutions cover

t/FXDPNFSUSBJOJOHUPCFDPNFB4FXJOH

operator level 1

t.JEEMFNBOBHFNFOUUFDIOJDBMBOEMFBEFSTIJQqualications to become a Supervisor level 3

t*OEVTUSZ&OHJOFFSJOHMFWFM

t.BOBHFNFOUTLJMMTBOELOPXMFEHF

The purpose o GSC training is to improve

productivity and strengthen essentialmanagement.

GSC has so ar conducted six Sewing Supervisor

courses involving 69 participants (81% emale),and three Sewing operator courses involving 38

participants (95% emale). All participants passedthe fnal test and received a certifcate rom GSC.

According to eedback evaluation more than95% o participants reported an excellent level


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o acquisition o knowledge and skills that wereuseul and related to their work. Ater training,

productivity at one actory grew by 18% and theperormance o the supervisors increased 43% on

average.A 22 year-old women who attended a sewing

supervisor course, stated that the knowledgeand skills I gained rom this training course can be

applied directly to my daily work, especially myworking method and line balancing. I understand

how to be good and eective supervisor. Thiscourse changed my attitude toward the role and

responsibility o supervisor.

Supervisor training course

In order to meet the requirements o integrationin the ASEAN community, GSC has been assigned

as the Lao Centre point or ASEAN Certifcation

AFTEX.Currently, AFTEX has fve competencies developedand available: Sewing Machine Operator, Sewing

Machine Supervisor, Sewing Machine Mechanic,Merchandiser and Pattern Maker. O the fve

competencies the AFTEX Skills Task Force oersthe two most required competencies were

selected.

For more inormation please call Ms. Borivon

021-254 226

Qualiy with an ASEAN Certifcate

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