While Latin America and the Caribbeanis the most urbanized region, the rural population is substantial, accounting for about 44 percent of total. 62 percent of the poor and the large majority of the extremely poor live in rural areas. Improvements in the quality and availability of rural transport infrastructure and services taken together with the establishment of sustainable financing and management arrangements are expected to increase economic opportunities, improve access to services and thus reduce isolation and associated poverty in rural areas.
 The region’s strategy for rural transport is predicated on using, and adapting where necessary, the emerging global best practices. In this regard primary attention is given to applying the concept of “basic access” in practice, that is to assure the maximum connectivity of the rural population at the least cost. The headline IDA indicator for rural access is the “proportion of the rural population within 2 kilometers of an all-season road”. The Bank thus seeks to help clients identify and implement cost effective solutions for infrastructure. Part of the challenge is that while 80 percent or more of the road system may be deemed “rural”- including tertiary roads under municipal or district level management and lower level local roads effectively under community control: these roads usually account for 10 percent of less of vehicular traffic; there are often few readily available resources, other then government transfers, to fund maintenance and rehabilitation.
Experience suggests that the involvement of local communities in making decisions about investment priorities can be very important for sustainability, even more so where decentralization confers responsibility for road management on municipalities or lower order public institutions. The experience of the Peru Rural Roads projects shows the impact that local involvement can have in terms of the appropriate design and implementation to secure reduced travel times, increased service reliability and improved access to markets and social services. The Peru experience has also helped in the development of the role of micro-enterprises drawn from local communities which perform maintenance and which help to generate income for general development purposes in the rural areas.  With an increasing focus on the infrastructure services for improved rural livelihoods, the Latin America and Caribbean region has been at the forefront of the identification of improved service delivery mechanisms, including of option of bundling services. Empirical work in Peru has demonstrated the rural incomes can be increased when more than one infrastructure service is provided, and even more so when the service provision is coordinated – time savings are generated and much of this can be “reinvested” in productive, non-farm activities. A further stage in the process is “territorial development” in which coordinated infrastructure provision, with transport usually a leading component, supports the achievement of productive sector growth and diversification in an identified region or territory.
The region is supporting a number of initiatives which pilot practical solutions to delivering the potential benefits of infrastructure bundling in a cost-effective and demand-responsive manner. In Chile, the Infrastructure for Territorial Development Project is helping develop local level participatory planning and delivery mechanisms to address infrastructure provision in isolated, underserved communities. In Guatemala, support is being provided through the Rural and Main Roads Project to the development of planning and implementation models for rural roads at the level of “mancomunidades” which are an association of municipalities. In Honduras, this is idea is being expanded to the joint provision of transport, water and electricity in selected “mancomunidades” under the Rural Infrastructure Project. In Peru, the “local development window” seeks to support a variety of community level productive and infrastructure developments in areas which have been opened up by rural transport improvements. In Haiti, the region is supporting the Transport and Territorial Development Project to promote integrated development in two selected micro-regions, the plans for each of which are anchored in a major transport sector investment. Finally in Guatemalaagain, FPSI and ESSD are collaborating on a Project to Support the Rural Economic Development Project through which technical support, infrastructure and financial services are being bundled for effective delivery in support of productive investments to expand and diversify economic activities in selected departments.
RURAL TRANSPORT PROJECTS REPUBLICOF GUATEMALA: PROJECT TO SUPPORT THE RURAL ECONOMIC DEVELOPMENT PROGRAM Context Guatemalais the Latin American country with the highest degree of inequality. The proportion of population living in rural areas (61%) and the proportion of the population which is indigenous is also very high (39%). 74% of the rural population is poor, 24% extremely poor and 43% illiterate. 80% of indigenous peoples live in the rural areas where they account for 52% of the population. The development of a consensus on a national rural development strategy as well as on the implementation of rural programs has been high on the political agenda. The government has recognized the need to develop a strategy to make a serious impact on poverty in the rural areas. The Government created a Cabinet level Rural Development Committee (GDR) under the chairmanship of the Vice-President which is responsible for strategic orientation and for coordination of the implementation of all programs and activities envisaged in support of the strategy. This strategy seeks to go beyond the vision of rural development as simply agricultural development and looks to adopt a more comprehensive, integrated approach through the development of institutions and infrastructure and through the promotion of broad-based growth opportunities in the rural sphere. Objectives The overall purpose of the project is to increase the incomes of the rural population participating in the productive supply chain program activities in the selected departments, with particular emphasis on indigenous groups. The project cost is US$60 million of which US$30 million to be funded form the proceeds of an IBRD loan. The Project Development Objectives (PDO) are (i) to improve the competitiveness of rural productive supply chains with strong indigenous participation; and (ii) to strengthen the institutional capacity of the public entities participating in the program for the adoption of a participatory territorial management model with indigenous involvement. The Project focuses on the following eight departments – San Marcos, Huehuetenango, Solala, Quetzaltenango, Totonicapan, Chimaltenango, Sacatapequez and Alta Verapaz. Description The Project would have three components: (i) investments in productive supply chains (US$ 53.6 million; IBRD US$27.3 million). The objective of this component would be to increase the incomes of the mostly indigenous rural population through time and space coordinated investments in favor of productive rural organizations including: market access, technical assistance, seed capital, financial services, and productive infrastructure investments in the Program area. (ii) strengthening of territorial public management capacities for competitiveness (US$3.5 million – IBRD: US$1.4 million). The overall objective of this component is to introduce in the institutions involved in the program a new model of public management focused on territorial development; and (iii) management, monitoring and evaluation (US$2.8 million; IBRD US$1.2 million). The objective of this component is to ensure program management capacity is in place and that an effective monitoring and evaluation system is established and maintained. Status Project appraisal was carried out in February 2006. Negotiations of the IBRD Loan have been completed. The project was presented to the Board on March 29, 2006. Effectiveness is currently expected for July 2006. Project Appraisal Document (101 Pg - 7.96 MB)
Updated May 2006
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