Lao PDR is trying to graduate from least-developed country status by 2020 and to join the ranks of middle-income countries. But in a country that includes several multi-ethnic groups and 72 poor districts that are often isolated in rural areas, poverty alleviation programs need to take an approach that puts the poor in the driver’s seat.
The Poverty Reduction Fund (PRF) builds capacity and empowers the poor, women and ethnic minorities in the poorest villages to assess their own needs and priorities, and to plan, manage and implement their own public investments in a decentralized and transparent manner.
- The priorities are demand-driven, based on the requests from communities within a menu that includes areas like water supply, transport (access roads), education, health, irrigation and agriculture, income generation and environment activities.
- Through a participatory process, project staff and selected villagers act as guides, trainers, and monitors in the preparation and operation of the projects that will address their established priorities.
- Budget-wise, 75 percent of the funds are allocated to field activities in the villages while 25 percent are used for operating costs that include monitoring and evaluation.
Over three years of activities, more than 1,200 subprojects have been selected, completed and implemented by poor communities in five provinces, 20 districts and nearly 2,000 villages with an investment of US$8.6 million.
Highlights:
- More than 900 villages have access to clean water
- More than 240 schools have been built in remote villages
- Almost 2,000 kilometers of roads have been upgraded, and
- More than 40 bridges linking different villages are in place.
- US$19.34 million in funding.
- Supports Government's efforts to deliver development resources at the village level, targeting poorest distritcs.
- IDA financing is in the form of:
Sub-project grants (US$14.98 million): to finance projects identified by the villages.
Local capacity building (US$2.17 million): to finance district and village facilitators and “technical support teams” that will help villagers develop projects.
Project management (US$2.19 million): finances cost of staffing, managing, monitoring, reporting and operation of PRF at the central level.
Current challenges for PRF include accessing remote villages in a cost-effective manner, improving maintenance schemes, improving skills of local PRF teams and village representatives, and channeling funds to remote areas.
Future challenges for a potential second phase of PRF include expanding coverage, extending the range of projects to income-generating activities at the household level, and finding additional funding, including the use of revenues from the Nam Theun 2 power project and donors’ support.
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