Manila, June 16, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will help provide a reliable system for resolving commercial disputes in the Lao People's Democratic Republic (Lao PDR), through a US$650,000 technical assistance grant package cofinanced by the Government of Luxembourg.
The lack of a reliable legal system for resolving disputes arising from financial and commercial activities has significant implications, particularly for the country's financial sector, where risks for commercial lending are seen to be exceptionally high.
"The lack of an efficient and effective legal system not only constrains improvement in the country's overall governance, but also limits the potential for greater foreign investment inflows and private sector development," says Shigeko Hattori, an ADB Principal Financial Sector Specialist.
The grant project will help identify the key factors preventing the court's commercial division from functioning effectively, and recommend measures to resolve these. Self-help procedures and other alternatives prior to recourse to the courts, such as the Office of Economic Dispute Resolution, will also be reviewed and developed.
Officials and enforcement officers assigned to the court's commercial division will be trained on court proceedings and case management, particularly for cases related to commercial dealings. Furthermore, a public awareness program will be developed to help the private sector better understand and use the dispute resolution mechanisms and litigation rights available to them.
Another component of the TA will support the Government of Lao to fully operationalize the secured transactions registry, and thus create an enabling environment to increase availability, affordability, and transparency of credit access, as well as facilitate domestic and cross-border investment.
Finally, the grant will help the state-owned commercial banks in the country to set up or strengthen their legal departments and resolve their sizeable non performing loans, which will again increase availability of funds for the emerging SMEs.
The total cost of the project is estimated at $780,000. ADB is providing $500,000 while the Government of Luxembourg is cofinancing $150,000. The Government of the Lao PDR will finance the balance of $130,000 in the form of counterpart staff, office accommodation, and logistical support.
Contact
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; +63 915 741 4363
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