Poland Rural Development Project: World Bank Supports Governance, Infrastructure, Education, Absorbtion of EU Funds in Poland's Rural Areas.

Poland : Orchestrating a Rural Revival

Malopolskie Region, Poland – What’s to show for the World Bank’s Rural Development Project, one year after its completion? On a recent visit to Poland’s southern Malopolskie region, there were many positive answers to this $120-million question.

-At the Niklaus Copernicus primary school in the suburban village of Chrzanow, renovations co-financed by the Rural Development Project jump-started the complete make-over of the 45-year-old building and translated into 14% lower heating bills despite this year’s exceptionally harsh winter.

-At the city hall in Klucze, a rural gmina (local district) surrounded by a protected forest, the popular mayor, in her fourth elected term, relies on a team of civil servants trained under the Rural Development Project to improve the management of local affairs.

-And in the nearby countryside, a baker has been able to create an extra job and increase his output by 30 percent thanks to a small loan provided by a micro-credit foundation supported by the project.

“You could go forever on field trips in Poland tracking down the impact of this project,” says Mark Lundell, the last task-team leader of the project. “There were 2,000 to 3,000 separate investments.” Over the course of five years, about 1,200 of Poland’s 1,900 rural and semi-rural gminas participated in a program which included labor redeployment, education, infrastructure, institutional capacity building and micro-credit components. The project’s objectives were to: (i) increase the level of off-farm employment in rural areas, (ii) contribute to on-going decentralization and regional development, and (iii) help Poland build institutional capacity to absorb EU funds.

Large-scale impact at a time when decentralization was still a novelty

The implementation completion report gives an inkling of the project’s impressive output and economic impact. By the project’s end in July 2005, micro-credit loans had helped finance the creation of almost 3,000 small enterprises in rural areas; 2,018 schools had been rehabilitated (more than ten times the targeted number); more than 4,000 local government staff had been trained in modern management techniques; 750 km of roads were built - the list goes on and on.

But beyond the specific figures, those who worked on the Rural Development Project (RDP) are most proud of the project’s institutional legacy.

“The project activated local participation and local expertise,” says Lundell, echoing the Polish name of the program (Program Aktywizacji Obszarow Wiejskich). “It helped channel local voices to middle and upper levels. Local administrations now have a say on how to spend the domestic budget and EU funds. ”

Developing local expertise in project management

For Andrzej Halasiewicz, director of the Program Coordination Unit, RDP became nothing less than “a school of administration for the implementation of development-type projects.” Now the deputy director of the Foundation of Assistance Programmes for Agriculture, at the ministry of Agriculture and Rural Development, Halasiewicz regularly runs into graduates of RDP in key positions in Poland’s regions and ministries. Many of the RDP teams were retained and are now implementing European structural programs, he says. It gives him allies who understand that “the complexity of the situation in rural areas requires comprehensive solutions .”

Local administrations, such as the one in Klucze, are better able to apply for funding and are more successful in applying for EU-supported regional development programs. Ryszard Kamionka, one of the municipality’s ten employees who went through RDP training, says the courses “broadened his horizons and helped him look beyond his narrow responsibilities .” He now works with civil society organizations and seeks sponsors to solve specific problems rather than providing top-down social assistance.

Project development courses also helped the municipality win a grant to open a public information desk on the ground floor of its building. The simple measure has improved the administration’s transparency and service quality.

Reviving rural areas in many different ways

At the Copernicus primary school, a half-hour car ride away, the Rural Development Project produced both one-off physical enhancements (a new common room, a new cafeteria and kitchen, audio-visual equipment, etc) and lasting educational changes.

Teachers were shown how to take advantage of the Internet, for example, to enrich lessons on various subjects, and given teaching aides such as maps and other wall displays.

All together, the changes have lifted the reputation of the school says its headmaster Grazyna Jamrozik, and may explain why young families with children are starting to return to the area after years of rural exodus.

That is the kind of revival RDP’s founders were hoping to generate. “An isolated good school is not enough to stimulate economic growth if the roads are bad, there is poor administration or patchy water supplies,” explains Ryszard Malarski, the World Bank’s team coordinator who worked on the project since its inception. “The idea of RDP was to deliver it all in one place. An unemployed person could get training and then a micro-credit to support his new business. His children could attend an improved school, while gmina officials would be better able to manage local affairs .” (Another important concept underlining the project was the idea that rural growth should not be viewed through the prism of agriculture but rather through the promotion of off-farm enterprises.)

In the quiet countryside near the small town of Klucze, Waclaw Zak’s bakery business illustrates the boiler-plate truth that everything is interconnected.

Just before Poland’s accession to the European Union, the well-organized Klucze gmina provided advice to farmers and small businessmen on how to meet European requirements at a meeting which Zak attended. Soon after, he was told to use a special sieve in the preparation of bread and to pave his yard to comply with more stringent sanitary regulations. “It was hard to find this cash overnight, ” he recalls, and with no credit history or collateral he would not have qualified for a commercial loan. But Zak was able to secure a flexible and affordable micro-loan through a service provider trained by the Rural Development Project and advertised by the gmina authorities.

Creating off-farm jobs

With this $5,000 loan (18,000 Polish Zloty), the baker was able to meet new EU sanitary standards and invest in a second car - a Polonez pick-up truck. He then hired an extra employee to drive this truck. Because Zak could now deliver more bread in the wee hours of the day, his business expanded by 30 percent.

It was a small step for Zak, but a promising result for Poland, a country weighed down by unemployment, working hard to find its place in the new European order.

Through micro-credit grants and labor redeployment schemes, the project directly created a total of 22,479 jobs and indirectly created three times more. Today, Poland’s Foundation of Assistance Programmes for Agriculture is continuing to offer micro-credit loans to start-up enterprises in rural areas and the European Union’s Social Fund is pursuing labor redeployment activities along the project’s lines.

A follow-up World Bank project, the Post-Accession Rural Support Project approved earlier this year, aims to help Poland tackle social exclusion and long-term unemployment in the country’s underdeveloped, primarily rural gminas.

* * *

Read more about the Rural Development Project (2000-2005) and the Post-Accession Rural Support Project (2006-2009).

First published in June 2006