Agriculture Reference
In-Depth Information
The ADB's 2005 evaluation reports were more directly critical of the bank's
own performance, identifying problems with short-duration missions, high staff
turnover, a lack of forestry specialists in review missions, insufficient assistance
from project consultants, questionable interim assessments which continued to
provide 'satisfactory' ratings, and a period of 20 months from 2000-2001 where no
ADB review missions were sent at all. Notably, the ADB asserts that this 20 month
period when all decisions were made by the Lao Project Coordination Unit coin-
cided with the timing of the decision by the PCU to expand the project from eight
districts in four provinces, to 32 districts in seven provinces.
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Included in the ADB internal evaluation document was the following stark
assessment:
“Thousands of inexperienced farmers and individuals were misled by prospects of unat-
tainable gains, leaving the majority of farmers with onerous debts, with no prospect of
repaying their loans, and with failing plantations.” (ADB 2005b: 37)
Echoing Ferguson's (1994) analysis of development projects in Lesotho the very
failure of the first ITPP project seemed to form a justification for a second project
phase. In a report to the ADB Board of Governors (ADB 2005c: i) in preparation
for the proposed Phase 2 of ADB-Laos plantation project, entitled the Lao Forest
Plantation Development Project (FPDP), the following surprising lessons were
drawn from the ADB's ITPP experience:
“…ITPP has established that: (i) efficient forest plantations of all sizes are financially via-
ble, and (ii) existing Government institutions have inadequate capacity to provide effective
support to this important and emerging sub sector.”
The Phase 2 ADB-FPD project was in turn designed as a US$15.35 million dollar
project, including a $7 million loan and a $3 million grant facilities to the Lao gov-
ernment from the ADB. The new project would correct the major institutional prob-
lems encountered in the ITPP through the creation of an autonomous, para-statal Lao
Plantation Authority (LPA) (ADB 2005c). Run at arms length from government, the
LPA would be a 'one stop window' for private sector investment into the Lao planta-
tion sector. It would be free of the suggested incompetence and rent-seeking predi-
lections of Lao organizations, and headed by an internationally-recruited Chief
Executive Officer. The LPA would operate according to strict principles of revenue
generation, competitiveness, and transparency. The main revenue source for the LPA
was to be derived from the annual land rents charged to multinational plantation
companies, who would be enticed into investing in Laos by LPA's investment pro-
motion activities. LPA would also hold an important regulatory function. It would
coordinate land use and concession agreements for major corporate investors, as
well as conduct environmental and social impact analyses of the plantation invest-
ments, in-line with international standards. A goal of the FPDP was to attract at least
one major international wood pulp manufacturing complex into Laos.
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It is worth mentioning that an ADB-approved feasibility study, completed in 1992, originally
targeted these seven Lao provinces along the Mekong River as “…
prima facie
suitable for indus-
trial tree plantations” (ADB 1993: 1).
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