June 2006 - In the mountainous Kyrgyz Republic, where 65% of the population lives in rural areas, the World Bank is spearheading a project that could have a lasting institutional impact. Over the last two years, the Village Investment Project has supported 1,600 micro-projects in about 80 different categories - from push-button traffic lights that save the lives of school children crossing busy roads, to school heating systems, bridges, health posts, computer centers, machinery workshops, textile cooperatives, storefronts and even a morgue. These projects have affected almost half of the Kyrgyz Republic’s scattered population of 5 million.  A financial return assessment conducted last year found that most projects had spectacular rates of return because of the thriftiness and ingenuity of the villagers who co-financed them. “They count every penny. They don’t shy away from used equipment. And they know the project will be there the next year, so they don’t splurge or do things badly,” says Gotz Schreiber, the project's Task Team Leader at the World Bank. He’s seen villagers use an abandoned factory chimney to patch up a broken irrigation canal, and bridges built for as little as $4,000 where the Ministry of Transport might have spent $40,000 all counted.
Each community involved in the Village Investment Project is guaranteed four years of financial support as long as it plays by the project’s rules. This medium-term commitment seeks to avoid a situation in which villages benefit one year but are left to their own devices the next, with “nothing left behind besides a building that soon falls into disrepair.”
Continuity allows villagers to plan ahead and move up the development ladder. In the first year of the program, poor villagers overwhelmingly chose to implement micro-projects addressing some of their basic social needs. However they show a greater tendency to invest in income-generating micro-projects the next. A carefully-crafted recipe Other features of the Village Investment Project are also remarkable: • The project is run entirely by Kyrgyz people rather than foreign experts. “Local knowledge and expertise is what we have to work with. If a project is designed in a way that’s suitable for them, it will work,” says Schreiber.
• There is no central implementing agency. The project management agency facilitates relations with the World Bank and channels the project funds to the communities. It does not design, procure, or manage funds or micro-projects on behalf of the villagers. It distributes instead micro-project handbooks which double as catalogues, giving people ideas of what they might strive to achieve. And it organizes a range of training events for villagers.
• Micro-projects are handled by local investment committees which are legally constituted bodies of self-government. These committees combine mayors, council members and ordinary citizens. They manage their own bank accounts and are responsible for mobilizing community contributions, project selection, design, procurement, contracting, implementation, and monitoring. • These committees remain active from year to year, as the planning for next year’s community investments begins even while the current year’s projects are being completed.
• Large bulletin boards publicize all financial and contractual information related to micro-projects. “In the VIP there is basically no corruption,” says Schreiber. “Everybody is an auditor."
• Money is allocated on a per capita basis, starting with the poorest villages in the country. In the first year, the amount allocated per person per year is USD 2.50. The sum rises to USD 5.00 in the third year. VIP uses official poverty and demographic statistics to avoid contestation.  | Elmira Ibraimova addressing
a community in Osh Oblast |
“The mechanisms of VIP ensure that resources reach the poorest communities first and that political interference is minimized,” noted Elmira Ibraimova, executive director of the Community Development and Investment Agency, in a presentation at the World Bank recently. She also saluted the Village Investment Project for its multi-sectoral approach to poverty reduction, its transparency and impact on local governance.
Inspiring results The local response to this project has been impressive, generating enthusiasm and ideas across the country’s remote mountains and valleys. Villagers came up with cash and labor contributions that far exceeded the 25% contribution the World Bank project team required. Contributions reached 48% (including 9% in cash) in 2004 and 68% (14% cash) in 2005. Household after household reached for spare coins, stretching the value of the World Bank grant as much as possible. The Village Investment Project, financed by a USD 15 million IDA grant, generated USD 3 million in community counterpart contributions in the project’s first two years. “In other projects, people won’t even give 5% because they perceive it as a tax for something in which they have no say,” says Schreiber. Because the Village Investment Project works at the lowest level of local self-government, Schreiber believes it is both more efficient and more democratic than, for example, large-scale infrastructure projects. “Nobody knows better what is needed than people on the ground.” A push-button traffic light on a deadly stretch of road in a small village is “probably not the kind of project the World Bank would think up,” he says. “It might be part of a larger transportation project but would take two years to materialize, at ten times the cost.” Citizen involvement will have a lasting impact  The project’s impact on local governance could be significant over time. “Our hope is that people are getting used to long debates among themselves and with mayors and councils, and that this citizen involvement will be permanently institutionalized in the community," says Schreiber. "It looks like this is happening. Many community councils now have open budget hearings.”
* * *
Photographs by Stan Peabody
|
RSS