Peru’s Rural Roads Program at a glance

April 07, 2006

Project Goal and ObjectivesProject Goal and ObjectivesGoal: improve access to social services, markets, and income generating activities with gender equity, to help alleviate rural poverty and raise living standards of rural communities Specific Objectives:– integrate poorly accessible areas to markets and economic

drivers;– generate employment and stimulate further income-earning

activities in rural areas;– strengthen local institutional capacity to manage rural road

networks.Phase 1 (1995-2000) US$250 million– WB loan US$90 m.

Phase 2 (2001-2006) US$150 million– WB loan US$50 m.

Both phases co-financed with the IDB– Sharing of specialists and harmonization of procedures

Three key strategies for reaching the RRP goals

Three key strategies for reaching the RRP goals

Targeting the rural poor in the highlands of PeruTargeting the rural poor in the highlands of Peru

POVERTY LEVEL BY GEOGRAPHIC DOMAIN (%)

Total Northern Central Southern JungleHighland Highland Highland Jungle

Total Poor 70.1 64.1 65.4 76.7 73.6 Extreme Poor 34.6 25.1 25.3 44.8 45.8Non Poor 29.9 35.9 34.6 23.3 26.4

(Poverty line criterion, 1994)

12 departments that rank highest in rural poverty

Northern

Southern

Jungle

Center

1

Constraints faced by people living on less than $1 a day

Household Consumption by item(%)More than 85% on most basic needs

6%

18%

6%5% 4% 3%

57%1%

Food Clothing & Footw earHousing & Fuel Health & MedicinesTransportation & Commun. Education & AmusementOther Goods & Services Transfers - Remittances

Connectivity with regional markets - economic poles(network effect)

Rehabilitation of “networks” of ruraland connecting secondary roads….

Improving basic accessibility:networks for better integrationImproving basic accessibility:

networks for better integration

…followed by maintenance performedby community-based organizations….

2

Large communities depend exclusively on NMT for transportation of people and export/import goods

Basic Accessthrough Non-Motorized Tracks (NMT)

ConsolidatedAccess through Motorized Roads

Distance

Trip

freq

uenc

y (c

umul

ativ

e)

100%

50%

25 km0 50 km

Water,firewood (3%) ~1.7 km ,Education & Health 9.5%; 2,1 km

Work 34.6%; 9.7 km

Sell products 11%, 20.2 kmSocial Act. 3.7%; 24.7 km

Purchase products 18.5%; 33.3 km

Administrative Act 6%; 42.7 kmVisit relatives (13.7%) 42.8 km

10 km

Trip Distribution by Purpose

3 Beneficiary participation in project activities and evaluation of results

Members of Committee “Virgen de Encarnacion”, Sacsamarca (Ayacucho)

Participation and social inclusion during project design and implementationParticipation and social inclusion during project design and implementation

Consultation & participatory workshops to: – assess transport needs, understand poverty links as perceived by

communities; – confirm with beneficiaries priority of works and commitment to their

maintenance;– validate designs and include local solutions;– mobilize local government support for road maintenance and

institutional building;– provide local governments with necessary information about project

and their roles;– build-up ownership of key stakeholders on strategies/actions.

Critical in Phase 1, with incipient decentralizationIncreasingly through representative entities (governmental, civil society) in Phase 2, with decentralization in place since 2002

What participation accomplishedWhat participation accomplishedBetter understanding of the transport needs as perceived by communities

Woman groups keen in picturing how lack of transport services impacts their day-to-day lifestyles.

Role of project in poverty alleviation and participation of beneficiaries /local governments became a fully shared objective

Creating opportunities:Creating opportunities:MicroMicro--enterprises for road enterprises for road maintenance and local developmentmaintenance and local development

Creating opportunities: micro-enterprises for road maintenanceCreating opportunities: micro-enterprises for road maintenance

Community-based organizations engaged in labor-intensive contracts for maintenance:– legal status;– contractual relationship, not welfare program!

Number of ME 600 Direct Employment 6,000 No. of Kms 13,000 Conditions for success

Appropriate selection of candidates; Presence of leaders; Emphasis on entrepreneurial culture Favorable economic conditions

How are the M.E How are the M.E financed?financed?Contract payments, which they allocate to wages (89%), tools, rentals, transportation and a saving investment fund.

Who are the new entrepreneurs?People from communities along road. On average, 36%, 18-30 years old; and 46%, 31-45 years old. A balanced education level: 60% primary education; 3% are illiterate.

Outcome 1:Cost effective solution to provide year-round accessibility with gravel roads: 600 ME maintain almost 13,000 km (10-14 members for 20-30 km)

Outcome 2: Catalysts for local development by creating entrepreneurial capacity in community: 27% of M.E. started productive activities, stimulating labor markets in their communities; members of MEshave subsequently become leaders of their communities

Outcome 2 (cont): Positive results hinge on M.E.s’ opportunity to access a secure income stream, technical assistance, and entrepreneurial capacity.

… but also show difficulty of working in rural environment, Interruption Rate 21.6%Reasons for interruption:Lack of financing 24%Insufficient training/assistance 40%Lack of market 20%Other 16%

An Association of MEs created in Apurimac to overcome difficulties

Outcome 3: Generation of long-term, direct employment for ME members, and indirect for others in community through complementary activities. Focal point for community work to ensure continuous support from community.

Improving non-motorized transport access to reach the most poorImproving non-motorized transport access to reach the most poor

Tracks serve transport needs of most isolated, impoverished communities; and of women in particular for whom most trips may not be along formal road system.

Communities perceive benefits of improved accessibility: increased safety (people, animals), reduced travel times, greater payloads with longer life to their valuable animals

The NMT ComponentThe NMT Component

Communities perceive benefits of improved accessibility: increased safety (people, animals), reduced travel times, greater payloads with longer life to their valuable animals

Villagers value technical, organizational skills. NGOs with credibility among villagers enhance side (social) effects

The NMT ComponentThe NMT ComponentParticipatory planning essential: only communities able to set priorities among ample number of alternative routes that fulfill similar trip purposes.

Traditional community structures demonstrated capacity to assign tasks and wages, control the use of funds, and contribute with free labor (faenas). Payments reinvested in other community initiatives.

Measuring results to better understand impacts Measuring results to better understand impacts

Comprehensive Impact Survey completed at end of Phase 1 and at mid-term of Phase 2Comprehensive Impact Survey completed at end of Phase 1 and at mid-term of Phase 2

– Surveys in areas of 74 rural roads and 16 tracks improved under project (+same number control roads)

– About 370 villages visited; in each, one focus group with 5+ people interviewed per village

– About 2,000 households interviewed» To keep panel data, the number of households reduced to 1,300 in

Phase 2

– Use method of the double differences for the estimation of impacts

» Comparison of roads under the program with control group not under the program (but that might have been rehabilitated under other programs)

Impact atSector Indicator Term Hypothesis end Phase I

TRANSPORT Travel time Short Decrease HighTraffic rate Short Increase HighPassenger fares Short-Medium Decrease Moderate-HighFreight tariffs Short-Medium Decrease HighRoad closure Short Decrease ModerateReliability of public. transp. Short-Medium Increase Moderate-High

ACCESS TO Nº School Registered Children Medium-Long Increase LowSERVICES Nº of Health Consultations Short-Medium Increase Moderate

Nº of Judicial Causes Short-Medium Increase NullNº of Police Interventions Short-Medium Increase High

PRODUCTIVE Farmed Land Area Medium Increase LowACTIVITIES Land value Medium Increase Null

Productivity Medium Increase NullLivestock ownership Medium Increase ModerateFarm prices Short-Medium Increase HighCrop allocation Medium-Long Variation NullMarket-oriented produce Medium Increase NullAccess to the marketplace Short-Medium Increase ModerateAccess to credit Medium-Long Increase LowNº and income of com. estab. Medium Increase LowIncome structure Medium-Long Diversification Low

EMPLOYMENT Type of occupation Medium-Long Variation LowOccupation category Medium-Long Variation NullProductive activity Medium-Long Variation NullAgricultural Day's Wage Medium Increase ModerateLabor Force structure Medium-Long Variation Low

MIGRATION Nº of migrants Medium-Long Decrease NullNº of returning migrants Medium-Long Increase Low

POVERTY Poverty Levels Medium-Long Decrease LowINSTITUTIONAL Nº of new institutions Short-Medium Increase Moderate

NEGATIVE IMPACTSTRANSPORT Nº of traffic accidents Short Increase LowENVIRONMENT Use of soils Medium Increase Null

Use of chemicals Medium Increase NullDeforestation Short-Medium Increase Low

Impacts Measured

in Second Survey

Impacts Measured

in Second Survey

Outcomes

Impacts

High Moderate Low Null

Outcomes (Transport) Measured in Second SurveyOutcomes (Transport) Measured in Second Survey

Impact atSector Indicator Term Hypothesis end Phase I

TRANSPORT Travel time Short Decrease HighTraffic rate Short Increase HighPassenger fares Short-Medium Decrease Moderate-HighFreight tariffs Short-Medium Decrease HighRoad closure Short Decrease ModerateReliability of public. transp. Short-Medium Increase Moderate-High

Impacts (Economic) Measured in Second SurveyImpacts (Economic) Measured in Second Survey

Impact atSector Indicator Term Hypothesis end Phase I

PRODUCTIVE Farmed Land Area Medium Increase ModerateACTIVITIES Land value Medium Increase Low

Productivity Medium Increase NullLivestock ownership Medium Increase ModerateFarm prices Short-Medium Increase ModerateCrop allocation Medium-Long Variation NullMarket-oriented produce Medium Increase NullAccess to the marketplace Short-Medium Increase ModerateAccess to credit Medium-Long Increase LowNº and income of com. estab. Medium Increase LowIncome structure Medium-Long Diversification Moderate

Impacts (Socio-Economic) Measured in Second SurveyImpacts (Socio-Economic) Measured in Second Survey

Impact atSector Indicator Term Hypothesis end Phase I

ACCESS TO Nº School Registered Children Medium-Long Increase LowSERVICES Nº of Health Consultations Short-Medium Increase Moderate

Nº of Judicial Causes Short-Medium Increase ModerateNº of Police Interventions Short-Medium Increase High

EMPLOYMENT Type of occupation Medium-Long Variation LowOccupation category Medium-Long Variation LowProductive activity Medium-Long Variation NullAgricultural Day's Wage Medium Increase ModerateLabor Force structure Medium-Long Variation Low

MIGRATION Nº of migrants Medium-Long Decrease NullNº of returning migrants Medium-Long Increase Low

POVERTY Poverty Levels Medium-Long Decrease LowINSTITUTIONAL Nº of new institutions Short-Medium Increase Moderate

if compared to overall rates for country

Moderate

time3 8

Impact ofintervention

0Basic Access

achieved

High

Medium

Low

Base line

OutputAccess

improved

OutcomeReduction travel time/cost

Reliability servicesAccess services

Access to marketsIncrease income &productive assets

Impact on living stds. & poverty

Base line changes due to external factors

1998 - El Nino (flooding, drought)1999-2001 Economic Recession

?

Gender impact analysisGender impact analysisActivities rehabilitated roads have enabled women to do (percent distribution)

Women’s interactions outside homestead facilitated acquisition of skills, knowledge, and the confidence that such interactions bring about“Engendering” actions: (a) women participation in workshops; (b) training of stakeholders on gender issues; (c) application to project components

Source: Impact Survey, 2000

Women responses YES NO N/ATravel to farther places 77.3 22.0 0.7Travel more frequently 70.3 29.0 0.7Travel safe 66.8 31.6 1.6Travel secure (assaults, violations, etc.) 53.6 42.2 4.2Obtain additional income 42.9 53.2 3.9Access new tools, domestic artifacts 38.8 55.2 6.0Access temporary employment 40.5 53.9 5.6

Some indicators on genderSome indicators on gender

Micro-enterprises• First cohort: 5% of members were women• Last cohort (62 micro-enterprises): 23%

NMT Tracks• About 50% of Road Committees members are women

Technical supervisors• 50% of contracted professionals are women

“Local development window”• Between 22% and 50% women participation in the design of local development plans and in the definition of public and private projects

Ongoing initiatives and next steps: towards strengthening the

impacts of the program

Ongoing initiatives: promoting local development

“Local Development Window” (LDW):(i) To enhance asset profitability and human capital in areas

in which transport conditions have become reliable.

(ii) To promote active community participation in the identification of regional economic potential and provide technical assistance to communities in the design and implementation of viable social and productive initiatives.

(iii) To create broader employment opportunities within rural communities, attacking poverty through income generation.

AREAS OF INTERVENTION

Implementation:

•PROVIAS RURAL (formal responsibility).

•NGO (Caritas del Peru),through its decentralized network acts as executing agency, working closely with communities in project generation and financing quest.

•Investorsinclude International and National Development Agencies, Foreign Governments, Development Funds, Private Enterprises, Cooperatives, Regional and Local Governments, and benefited communities, among others.

Examples of Results of the LDW

Fish Farm in Sauce, San Martin Cultivation of ‘Yacon’ in Orcotuna, Junin.

Prioritized in the Concerted Local Development Plan of SAUCE, during Phase I.

Prioritized in the Concerted Local Development Plan of ORCOTUNA, during Pilot .

Attained financing from the VASQUE GOVERNMENT, for an amount of S/158,589, through Caritas Tarapoto.

Attained financing from FODAM, for an amount of S/20,706, through Caritas Huancayo.

Local Counterpart accounted for S/101,900

Local Counterpart accounted for S/14,294

Project Concept: Cultivation of ‘Tilapias’ in Lago Sauce, to supply local markets. The rehabilitation of the rural road accessing Tarapoto, through the project, has enabled the local population to reach said destination in two hours, when traditionally it took them six. The project is managed by an Association of Fishermen (APESA) and by a Committee of Dames.

Project Concept: Cultivation of ‘yacon’, a traditional tuber dating from the age of the Incas which is in risk of extinction and has many natural virtues, including medical uses for people with Diabetes. This product is being commercialized in local markets and exported to destinations worldwide. The project is managed by an Association of Producers.

Number of beneficiaries:61 families

Number of beneficiaries:40 families

Results attained with the LDW (2001-2005)

QUANTITATIVE QUALITATIVE

81 districts prepared Concerted Local Development Plans and Inventories of Local Governments and Institutions involved in local development promotion within the area.

Over 600 project profiles and project ideas identified by the communities in participatory workshops

Over 40% female participation in LDW initiatives.162 Productive Projects selected for pre-

feasibility stage33 Projects have attained financing, amounting to

US$6.3 million.200 people have received training, including local

authorities (governance) and associations of producers (identification of projects, technical skills)

20 LDW Management Committees have been created at district level, born as an initiative of benefited communities

Provided a new mechanism for dealing with rural poverty, changing the traditional assistance based model for a proactive approach, based on identifying and exploiting existing potential, enhancing the entrepreneurial spirit among rural communities

Fostered growing community participation, with a clear gender focus, strongly empowering women.

Contributed to national decentralization and regionalization, triggering the institutionalization of Local Development Plans nationally and working in line with the ‘Mesas de Concertación’ and Participatory Budgeting processes.

Enhanced coordination between public and private entities

Generated awareness among communities on the importance of technical assistance.

Ongoing initiatives: developing institutionsOngoing initiatives: developing institutionsSupport to decentralization agenda through gradual establishment of municipal road agencies

Currently 40 provincial road institutes created and responsible for road management within their jurisdiction (out of about 100 provinces where the project is operating) with

oversight from a group of neighboring municipalitiesaccountability mechanisms

Increasing co-financing participation of municipalities in the funding maintenance costsIncorporation of competition among micro-enterprises for maintenance contracts

Next steps: Enhancing complementarities of interventionsNext steps: Enhancing complementarities of interventions

Analytical study on rural infrastructure sectors (water, sanitation, electricity, telecommunications, and transport)

An integrated strategy to coordinate complementary actions: confluence of activities produces synergies and enhances sustainability.

05

1015

2025

30

water + electricity water + electricity +telephone

water + electricity +telephone + all-

weather road

% c

hang

e of

rura

l hou

seho

lds'

in

com

e

with interactions without interactions

Distribution of rural households’ income moves towards higher incomes when a higher number of infrastructure services becomes available

Source: Escobal and Torero, 2004.

Bundling benefits and povertyBundling benefits and poverty

Thank youThank you