International Consultant - Calibrated General Equilibrium (CGE) modeling – Long-Term Economic Growth Scenarios, Lao PDR

Contract

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Background

UNCDF is the United Nations capital investment agency for the world’s least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments—through fiscal decentralization, innovative municipal finance, and structured project finance—can drive public and private funding that underpins local economic expansion and sustainable development. By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a number of different SDGs;

UNCDF are currently implementing a project in Lao PDR financed under the UNJP SDG Fund that is supporting the development of the Integrated National Financing Framework (INFF) for Lao PDR. The project Efficiency and Optimization of Lao PDR’s Public Budget to Finance the SDGs Through the National Plan provides the technical framework for the mission as a diagnostic exercise to inform the financing strategy of the potential economic growth and development impacts that can be made available through prioritised sector investment. The diagnostic will seek to:

1. Identify core growth sectors for the Laos’ economy to steer and enable prioritized investment
2. Develop collated scenarios for labour movements across the economic sectors
3. To cluster and prioritised areas of potential growth applying a territorial model

The UNCDF portfolio in Lao PDR

Historically UNCDF have designed and implemented local development initiatives in a majority of the ASEAN member states both at national and sub-national levels. In particular, in alignment to its mandate, UNCDF has mainly operated in the Least Developed Countries, of the ASEAN region including (1) Cambodia, (2) Lao PDR, and (3) Myanmar.

In Lao PDR UNCDF has been engaged extensively in the government’s decentralization process through the development of intergovernmental fiscal transfers that supports the development of predictable local government financing mechanisms working directly with the Ministry of Home Affairs (MoHA) and Ministry of Finance (MoF).

Leveraging this positing and work, UNCDF are currently working directly with the Ministry of Finance (MoF) under the SDG Fund project “Efficiency and Optimization of Lao PDR’s Public Budget to Finance the SDGs Through the National Plan. The core tasks that UNCDF work on in partnership with MoF include SDG budget tagging based on diagnostics and Public Debt Management. This strategic level intervention provides UNCDF access to all MoF departments (including treasury and revenues) two key stakeholders to enable and support the tasks defined under this ToR.

In addition, UNCDF is working with the Ministry of Labor and Social Welfare (MoLSW) developing the new CoAs for Social Protection under the framework of another SDG Fund project, “Establishing the Basis for Social Protection Floors in Lao PDR”.

Objective of the assignment

The main objective of the assignment is to undertake a diagnostic that will require the development of a research paper that is developed from a Lao PDR specific macroeconomic model (Calibrated General Equilibrium (CGE) model) and to determine the following

1. The potential growth sectors of the Laos economy that considers (i) the current rail connection and (ii) an extension of the rail connection to Thailand and by extension to Cambodia
2. The movement of labour based upon the above scenario
3. The potential Impacts to GDP based on prioritised investments
4. The potential impacts for structural transformation

The CGE model and research paper will be developed in partnership with Ministry of Planning and Investment (MPI) and the National Development Research Institute (DRI) and consider the following as key assumptions

• The economic growth potentials for Lao PDR have expanded due as the new rail connection has increased exports and cross-border trade
• The geographic positioning of Lao PDR and the construction of various connectivity projects suggests that logistics and associated services can offer a new growth potential that has previously not been fully considered
• A surge in FDI emanating from China is reshaping the economy
• The labor force in Lao PDR is estimated at 3.8 million against a population of 7.2 million (WBDI)
• The country exhibits a demographic dividend similar to neighboring South East Asian countries
• Limited quality data is available – therefore alternative data sets will be required to be referenced and used

The assignment will develop a CGE model that provides a similar construct to an earlier model developed for Myanmar by ADB - https://www.adb.org/sites/default/files/publication/158425/ewp-429.pdf applying the general principles for Lao PDR. The output of the modelling needs to illustrate the potential growth projections for the three broad sectors (as considered in above research) of the economy that are subsequently divided by sub-categories that highlight but which are not limited as follows:

Baseline: Pre-pandemic growth rates (10-year time series)

• Agriculture
  • Main Exports
  • Diversification
  • Value-added growth
• Industry
  • Resource Based
  • Light Manufacturing
  • Manufacturing
• Services
  • Tourism
  • Logistics
  • Private Services

Support to Growth

• Human Development
  • Labor Productivity
  • Education
  • Health
• Infrastructure
  • Transportation
  • Telecom & IT
  • PDI

Duties and Responsibilities

The consultant will work closely with MPI – Department of Planning (DoP) and Development Research Institute (DRI) to complete the mission and will generate the followings:

1. Research

   a. Develop an economic research paper - Long-Term Economic Growth Scenarios, Lao PDR, that highlights potential post pandemic

   growth drivers for the Laos’ economy.

   2. Economic Modelling

   a. Development of a Calibrated General Equilibrium (CGE) model to ascertain potential sectors of growth for the Lao PDR’s economy

   b. Conduct scenario analysis using the model to help determine the best potentials for growth (to be agreed during the mission inception)

   c. Identify the potentials for logistics as a growth driver to the national economy

   d. Highlight policy considerations in terms of human development and additional infrastructure

   e. Identify capacity gaps (GAP Analysis) of DoP in particular and MPI in general?????

   3. Delivery of workshop presenting the findings

Competencies

• Owns a comprehensive knowledge of economic growth
• Owns the ability to develop and formulate CEG models
• Has detailed capacity to access data and develop data to addressing data gaps
• Able to provide in-depth analysis of published documents and strategies related to economic growth in South East Asia
• Able to prepare a detailed analysis of national country level macro-economic data and trends
• Proven ability to develop and generate economic research papers (published research will be used as validation)
• Competency to present finds of research and generate public materials

Required Skills and Experience

• Minimum Master’s Degree in Finance related area / economics / public policy (PhD will be considered as an advantage)
• 10 years of professional experience with at least 5 years working within Public Financial Management Reform programmes
• Proven research publications
• Proven Calibrated General Equilibrium (CGE) model development for economic research
• Proven professional track record economic growth analysis
• Proven track record working with government institutions
• Advance user of STATA and/or other professional modelling tools
• Work experience in South East Asia will be considered as an advantage
• Good communication skills; sensitivity and willingness/flexibility to respond to client’s needs.

In order to make your submission, please read the relevant documents available at the links below

1. TOR (Annex I)
2. IC General Terms and Conditions _ Annex II;

Interested Individual Consultants must submit the following documents/information to demonstrate their qualifications:

1. Technical Proposal

   (i) Explaining why you are the most suitable for the work;

   (ii) Providing a brief methodology on how you will approach and conduct the work including the work

   schedule for the delivery of outputs/deliverable;

2. P11 Form Education and work experience, including past experience in similar projects and contact references of at least 3 references for whom you have rendered preferably the similar services;

3. Financial proposal: Detailed financial proposal: Lump sum offer with clear cost breakdown against each deliverable. Please use this template OFFEROR’S LETTER TO UNDP CONFIRMING INTEREST AND AVAILABILITY _ Annex III.

Instructions for online submissions:

• Step 1: Please prepare all required documents electronically;
• Step 2: Combine all documents in ONE SINGLE FILE (preferably in PDF however Word format can be also accepted) and upload to the UNDP Jobs using the links above;
• Step 3: After that you will receive an auto reply from the UNDP jobs if your offer is received successfully.

Incomplete proposals or proposals received after the deadline will be rejected.

Note: Any request for clarification must be sent in writing before the submission deadline to the following emails: surith.sengsavang@undp.org