Lao PDR: Revamped market creates brighter future for local vendors

The renovated market of Khangkhai in Lao PDR attracts more customers from surrounding villages. Photo: Xaisongkham/Ministry of Information, Culture and Tourism
The renovated market of Khangkhai in Lao PDR attracts more customers from surrounding villages. Photo: Xaisongkham/Ministry of Information, Culture and Tourism

Soutsady, a 48-year-old mother of six who prefers to be addressed by her first name, has always depended on her meagre income from selling fried bananas at Khangkhai village market in the central Lao PDR province of Xiengkhouang. But the small, poorly-equipped community market did not provide enough space to accommodate all vendors at the same time.  This meant she was only guaranteed a stall three days a week, and couldn’t earn enough to support her family.

But at the end of 2011 Soutsady’s life improved drastically following the market’s successful upgrade. The bigger and better equipped market is an outcome of the Governance and Public Administration Reform Programme, jointly supported by the United Nations Development Programme (UNDP) and the UN Capital Development Fund (UNCDF).

Highlights

  • 25 percent of all districts in Lao PDR have received support from UNDP-UNCDF’s District Development Fund (DDF) projects;
  • DDF has invested in over 300 projects since 2006, at an average cost of US$ 14,000 per project;
  • DDF system strengthens local administration capacity by channeling funds through the Ministry of Finance down to the province and districts.

Following the expansion, Soutsady has been selling her banana snacks seven days a week. Since the improved market now also attracts more customers from the surrounding five villages, Soutsady earns twice as much—and saves more. This is particularly important as two of her children will soon need to head to the capital Vientiane to continue their studies.

“Before this building was built it was very difficult to sell our products because there was nothing to protect us from the sun and rain,” said Soutsady, who previously had to carry her cooking utensils home after work to keep them from getting damaged. She now leaves them at the market overnight.

The idea of upgrading the Khangkhai market came from the villagers themselves. Through the Programme’s District Development Fund (DDF)—a mechanism which aims to boost local development—, the community decided that the market’s expansion was a priority. The district planning committee and village leaders then applied for the funds together.

Although the bulk of funding came from donors, the process improved the local administration and the community’s ability to manage and implement small scale infrastructure projects, since the project was implemented by the national and local governments directly, working hand-in-hand with villagers. The community raised the equivalent to US$1,300 while the UNDP-UNCDF Fund provided the remaining US$22,000.

“The alignment of planning, financing and management between various Government ministries combined with community involvement makes this a special project,” said UNDP Assistant Resident Representative Sudha Gooty.  “While most development assistance in Lao PDR is delivered using development partners’ systems, this initiative uses national, rather than donor-specific project mechanisms, which helps strengthen financial and project management capacities, in line with improving aid effectiveness in the country.”

by Krisztian Simon