Result of Service

The ultimate goal of the Budget Stress Testing project in Lao PDR is to provide an analysis of the country’s fiscal resilience to disaster and economic risks, with a focus on facilitating that Lao PDR’s transition from LDC status in 2026 is supported by robust fiscal policies. By incorporating scenario and sensitivity analysis of preventive investments and disaster risk financing mechanisms, along with a strong emphasis on disaster risk management, the project aims to strengthen the fiscal sustainability of Lao PDR, enhance informed decision-making, and support local capacity for continuous monitoring and management of fiscal risks. Additionally, it will assist sustained resilience budgeting for DRR at both national and local levels, supporting alignment with sustainable development goals and post-graduation economic stability.

Work Location

Vientiane, Lao PDR

Expected duration

2 Dec 24 -17 Sep 25

Duties and Responsibilities

Created in December 1999, the United Nations Office for Disaster Risk Reduction (UNDRR) is the designated focal point in the United Nations system for the coordination of efforts to reduce disasters and to ensure synergies among the disaster reduction activities of the United Nations and regional organizations and activities in both developed and less developed countries. Led by the United Nations Special Representative of the Secretary-General for Disaster Risk Reduction (SRSG), UNDRR has over 150 staff located in its headquarters in Geneva, Switzerland, and in regional offices. Specifically, UNDRR guides, monitors, analyses and reports on progress in the implementation of the Sendai Framework for Disaster Risk Reduction 2015-2030, supports regional and national implementation of the Framework and catalyzes action and increases global awareness to reduce disaster risk working with UN Member States and a broad range of partners and stakeholders, including civil society, the private sector, parliamentarians and the science and technology community. Lao PDR has exhibited notable economic strengths, particularly in sectors such as tourism, transport, logistics, and energy, largely fueled by investments in hydropower and mining. These sectors continue to drive positive economic activity, with the country’s GDP expected to grow by 4% in 2024. However, this growth is tempered by several challenges. High inflation, which averaged 31% in 2023, and a depreciating currency have significantly affected household consumption and public spending. Additionally, substantial external debt constrains the government’s fiscal space, limiting its ability to respond effectively to economic shocks. Adding to these economic pressures are the substantial risks posed by disasters such as floods, droughts, and landslides, which threaten both the country’s economic and fiscal stability. These disasters cause direct damage to crucial sectors like infrastructure and agriculture, which are essential for maintaining economic balance. Indirect economic impacts, such as disruptions to tourism and declines in productivity, further compound the existing economic challenges. The fiscal implications of these disasters are severe. Increased spending on emergency response and recovery can strain an already limited budget, leading to deficits or forcing reallocation of funds from critical development projects. Lao PDR’s high debt levels further diminish the government’s ability to manage such fiscal pressures, risking long-term economic instability. The Budget Stress Testing exercise offers an approach to addressing these challenges. It will evaluate the benefits of preventive investments, such as infrastructure improvements and early warning systems, which play a critical role in reducing disaster risks. These investments help reduce the potential damage and the associated costs of disasters, ensuring fiscal resilience. Additionally, the stress test will examine the role of disaster risk financing instruments, such as insurance and contingency funds, which provide a financial buffer during emergencies and help minimize economic and fiscal disruptions. By aligning with the INFF, which supports the integration of fiscal policies with SDGs, and incorporating Disaster Risk Management (DRM) principles, the budget stress test will provide strategic insights into how Lao PDR can enhance its fiscal resilience. The test will demonstrate how preventive investments and disaster risk financing instruments help maintain fiscal stability. Furthermore, through budget tagging and tracking mechanisms, the test will assist in monitoring DRR investments and evaluating their impact, ensuring that resources are efficiently allocated, even in the face of disaster and economic shocks, while supporting Lao PDR’s progress toward SDGs. In this regard, budget stress testing will guide Lao PDR in strengthening its fiscal and economic frameworks, supporting that the country is better prepared to handle both fiscal and disaster-related risks, particularly as it approaches its transition from LDC status. The consultant will be home based in Lao PDR and work under day-to-day guidance under the supervision of the Economic Affairs Officer of the United Nations Office for Disaster Risk Reduction, Regional Office for Asia and the Pacific (UNDRR ROAP). The consultant will undertake the following tasks: 1. Scenario Development: o Assist in developing disaster and economic stress scenarios specific to Lao PDR, focusing on major potential events such as floods, droughts, or economic downturns by considering the resilience of infrastructure investments, preventive investments, and risk financing tools, and their alignment with sustainable development goals. o Support the collection of relevant data for scenario development, ensuring that all necessary historical data on disaster impacts, current economic conditions, and fiscal policies are gathered and accurately incorporated into the scenarios. o Provide recommendations on whether the developed scenarios adequately meet the needs and requirements of Lao PDR, ensuring that they align with national priorities and economic realities. o Assist in gathering feedback from relevant ministries on the outcomes of the developed scenarios, ensuring that the scenarios are validated and adjusted based on local expertise and requirements. 2. Economic and Fiscal Modeling: – Assist in interpreting the economic and fiscal models, ensuring that they accurately reflect Lao PDR’s economic and disaster risk profile. Also consider existing preventive investments and risk financing instruments to provide relevant insights. – Guide the collection of data necessary for economic and fiscal modeling. This includes ensuring that the data aligns with Lao PDR’s economic and disaster risk profile, as well as its existing preventive investments and risk financing mechanisms. – Assist in establishing communication and coordination with relevant institutions and ministries to facilitate the data collection process. – Assist in assessing the implications of disaster risks on debt sustainability and fiscal buffers. – Consider the implications of Lao PDR’s upcoming graduation from LDC status in 2026, ensuring that preventive investments and disaster risk financing mechanisms are aligned with the country’s post-graduation economic realities. 3. Risk and Vulnerability Assessment: – Assist in evaluating the effectiveness of existing disaster risk financing instruments – and preventive investments and recommend strategies for enhancing fiscal resilience and supporting sustainable development objectives. – Analyze how the results of the budget stress test can be integrated into Lao PDR’s fiscal planning, national development plan, and relevant fiscal and disaster risk management regulations. This will involve assessing the alignment of stress test outcomes with existing policies and recommending strategies for their incorporation into broader national frameworks. 4. Resource Allocation and Policy Recommendations: – Work together with the relevant partner to provide recommendations on resource allocation to effectively reduce identified fiscal and disaster risks. In doing so, ensure that resources from the national budget or disaster funds are distributed in the most efficient and impactful way, and that the allocation of resources to subnational authorities is taken into account. 5. Stakeholder Engagement and Capacity Building: – Lead in organizing training sessions related to the implementation of the budget stress test. This includes coordinating the logistics, scheduling, and communication with participants to ensure that the training is effectively delivered and aligns with Lao PDR’s fiscal and disaster risk management and preventive investments objectives. – Lead in organizing stakeholder meetings related to the budget stress test. This includes coordinating with relevant ministries, international organizations, and other related stakeholders arranging logistics, and facilitating discussions to ensure that the meetings are productive and aligned with Lao PDR’s fiscal and disaster risk management and preventive investment goals. – Collaborate with the Ministry of Finance and other relevant stakeholders, such as the Ministry of Labor and Social Welfare (MoLSW) and the Ministry of Planning and Investment, to help align with national priorities, such as the National Socioeconomic Development Plan Financing Strategy. – The review of existing relevant analyses from the Asian Development Bank, World Bank, IMF, UNDP, and other international organizations will be conducted in collaboration with the relevant partner. Assistance will be provided in establishing communication with these organizations when necessary. 6. Reporting and Documentation: – Assist in preparing a report detailing the findings of the stress tests, including actionable recommendations. – Help provide recommendations on how to incorporate the report results into the fiscal planning processes, with an emphasis on sustainable development. – Assist in providing recommendations on how to integrate the report results into the INFF process of Lao PDR.

Qualifications/special skills

Advanced university degree in economics, finance or a related field is required. A first-level university degree in combination with a minimum of two additional years of qualifying experience may be accepted in lieu of the advanced university degree. A minimum of 5 years of relevant experience in economy and/or fiscal analysis is required. Experience in working with the Government of Lao PDR is desirable Experience in disaster regulations is desirable Experience in econometrics and statistics is desirable

Languages

English and French are the working languages of the United Nations Secretariat. For this consultancy, fluency in English and Laotian is required.

Additional Information

Due to the high volume of applications received, only successful candidates will be contacted.

No Fee

THE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.