Document of The World Bank FOR OFFICIAL USE ONLY Report No: 52637-VN PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 96.6 MILLION (US$150 MILLION EQUIVALENT) TO THE SOCIALIST REPUBLIC OF VIETNAM FOR A SECOND NORTHERN MOUNTAINS POVERTY REDUCTION PROJECT February 24, 2010 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Transcript
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 52637-VN
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 96.6 MILLION
(US$150 MILLION EQUIVALENT)
TO THE
SOCIALIST REPUBLIC OF VIETNAM
FOR A
SECOND NORTHERN MOUNTAINS POVERTY REDUCTION PROJECT
February 24, 2010
This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
ii
Vice President: James W. Adams, EAPVP
Country Director: Victoria Kwakwa, EACVF
Sector Director John Roome, EASSD
Sector Manager: Hoonae Kim, EASVS
Task Team Leader: Son Thanh Vo, EASVS
CURRENCY EQUIVALENTS
(Exchange Rate Effective: February 2, 2010)
Currency Unit = Vietnamese Dong
VND 18,474 = US$1
US$1.554 = SDR 1
FISCAL YEAR
January 1 – December 31
iii
ABBREVIATIONS AND ACRONYMS
AMT Aligned Monitoring Tool
BDO Business Development Officer
BLS
CB
baseline survey
capacity building
CBRIP Community-based Rural
Infrastructure Development Project
CDB Commune Development Board
CDBC Commune Development Budget
Component
CDD community-driven development
CEM Committee for Ethnic Minorities
CF Commune Facilitator
CFAA Country Financial Accountability
Assessment
CIG common interest group
CP Commune Professional
CPC Commune People‘s Committee
CPO Central Project Coordination Office
CPS Country Partnership Strategy
CRC citizen report card
CSB Commune Supervision Board
D-61 program to support the 61 poorest
districts in Vietnam
DA Designated Account
DAE Department of Agriculture Economy
DPC District People‘s Committee
DPI Provincial Department of Planning
and Investment
DPL development policy loan
DPMU District Project Management Unit
ECOP Environmental Code of Practice
EMDP Ethnic Minority Development Plan
EMF Environmental Management
Framework
EOP end of project
FM financial management
GoV Government of Vietnam
GSO General Statistics Office
GTAF Governance, Transparency, and Anti-
corruption Framework
GTAP Governance, Transparency and Anti-
corruption Plan
IA internal audit
IBRD International Bank for
Reconstruction and Development
IDA International Development
Association
IEC information, education, and
communication
IFR interim financial report
IRR internal rate of return
M&E monitoring and evaluation
MARD Ministry of Agriculture and Rural
Development
MIS management information system
MOF Ministry of Finance
MOLISA Ministry of Labor, Invalids and
Social Affairs
MoU memorandum of understanding
MPI Ministry of Planning and Investment
MTR mid-term review
NGO nongovernmental organization
NMPRP-1 First Northern Mountains Poverty
Reduction Project
NMPRP-2 Second Northern Mountains Poverty
Reduction Project
NTP national targeted program
NTPPR National Target Program for Poverty
Reduction
O&M operation and maintenance
ODA official development assistance
P135-2 Program for Socio-economic
Development in Communes Facing
Extreme Hardship in Ethnic Minority
and Mountainous Areas (2006-2010)
PACBP Provincial Annual CB Plan
PCBP Provincial Capacity Building Plan
PDO project development objective
PFM public financial management
PIM Project Implementation Manual
PM&E participatory monitoring and
evaluation
PPC Provincial People‘s Committee
PPMU Provincial Project Management Unit
PPP Public Private Partnership
SA Social Assessment
SOE Statement of Expenditures
PPSC Provincial Project Steering
Committee
PTI provincial training institution
SEDP Socio-Economic Development Plan
TOR terms of reference
VHLSS Vietnam Household Living Standard
Survey
WA
WU
withdrawal application
Women‘s Union
iv
VIETNAM
Second Northern Mountains Poverty Reduction Project
CONTENTS
Page
I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1
A. Country and sector issues.................................................................................................... 1
B. Rationale for Bank involvement ......................................................................................... 3
C. Higher level objectives to which the project contributes .................................................... 4
II. PROJECT DESCRIPTION ................................................................................................. 5
A. Lending instrument ............................................................................................................. 5
B. Project development objective and key indicators.............................................................. 5
C. Project approach and components ...................................................................................... 5
D. Lessons learned and reflected in the project design ............................................................ 9
E. Alternatives considered and reasons for rejection ............................................................ 11
III. IMPLEMENTATION .................................................................................................... 11
A. Institutional and implementation arrangements ................................................................ 11
B. Monitoring and evaluation of outcomes/results ................................................................ 12
C. Sustainability..................................................................................................................... 13
D. Critical risks and possible controversial aspects ............................................................... 14
E. Credit conditions and covenants ....................................................................................... 16
IV. APPRAISAL SUMMARY ............................................................................................. 17
A. Economic and financial analyses ...................................................................................... 17
B. Technical ........................................................................................................................... 19
C. Fiduciary ........................................................................................................................... 19
D. Social................................................................................................................................. 22
E. Environment ...................................................................................................................... 24
F. Safeguard policies ............................................................................................................. 24
G. Policy Exceptions and Readiness...................................................................................... 25
v
Annex 1: Country and Sector or Program Background ......................................................... 27
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 31
Annex 3: Results Framework and Monitoring ........................................................................ 32
Project implementation period: Start: July 15, 2010 End: June 30, 2015
Expected effectiveness date: July 15, 2010
Expected closing date: June 30, 2015
Does the project depart from the CAS in content or other significant respects?
Ref. PAD I.C. [ ]Yes [X] No
Does the project require any exceptions from Bank policies?
Ref. PAD IV.G. Have these been approved by Bank management?
[ ]Yes [X] No
[ ]Yes [X] No
Is approval for any policy exception sought from the Board? [ ]Yes [X] No
Does the project include any critical risks rated ―substantial‖ or ―high‖?
Ref. PAD III.E. [X]Yes [ ] No
Does the project meet the Regional criteria for readiness for implementation?
Ref. PAD IV.G. [X]Yes [ ] No
Project development objective Ref. PAD II.C., Technical Annex 3
The development objective for the proposed project is to enhance the living standards of the
project beneficiaries by improving: (i) their access to productive infrastructures; (ii) the
productive and institutional capacity of local governments and communities; and (iii) market
linkages and business innovations. The key outcome indicators to assess achievement of the
PDO are as follow:
At least 60% of the project beneficiaries report satisfaction on the selection, design, and
implementation of project activities.
The project beneficiaries report an improvement in on- and off- farm income of at least
10% over the life of the project.
Project description [one-sentence summary of each component] Ref. PAD II.D., Technical
Annex 4
The project comprises four components. The following summarizes the key elements and main
activities of each component.
Component 1: District Economic Development (about 45% of total allocated project
funds). The objective of this component would be to provide investment support to the
District Socio-Economic Development Plans (SEDPs), focusing on productive and
economic infrastructure for increased agriculture productivity, direct local employment
and income generation, and to facilitate diversification of the livelihoods of the rural
poor, including, among others, business innovation.
Component 2: Commune Development Budget (about 35% of total allocated project
budget). This component will provide block grants to communes to finance small-scale
sub-projects at village level for productive infrastructure and activities that are identified
through participatory planning processes. This component builds on a key innovation and
an area of particular success under the first NMPRP.
Component 3: Capacity Building (about 10% of the total project allocated budget). The
objective of this component would be to improve capacity of central, provincial, district,
viii
communes and villages levels to plan, manage, implement, supervise, and maintain
productive infrastructure and livelihood improvement programs in their localities.
Component 4: Project Management (about 10% of total allocated project budget). This
component is to ensure effective and efficient project management through facilitation of
various implementation, coordination, communication, information sharing and learning,
and quality enhancement efforts.
Which safeguard policies are triggered, if any? Ref. PAD IV.F., Technical Annex 10
Environmental Assessment (OP/BP 4.01)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OP/BP 4.10)
Significant, non-standard conditions, if any, for: Ref. PAD III.F.
Board presentation:
None
Loan/credit effectiveness:
The project implementation manual acceptable to IDA adopted by MPI
18-month capacity building plan acceptable to IDA has been adopted by MPI and Project
Provinces
Ministry of Finance issued circular on the project financial management manual
acceptable to IDA.
Covenants applicable to project implementation:
CPO, PPMUs, DPMUs, and CDBs maintained at all times during project implementation
with staffing, functions, and responsibilities acceptable to IDA
Establishment of Provincial Steering Committees and Commune Supervision Boards
A combined annual work plan, including procurement plan and budget for activities
related to each project component for each province and for CPO
Semiannual progress reports in form and substance agreed to with IDA on or before July
30th and January 30th of each year, beginning in January 2011
Finalization of a mid-term project evaluation in accordance with terms of reference to be
agreed upon with IDA at least one month prior to the date of the project mid-term review
Annual audit reports and management letter submitted within six months of the close of
each project year, starting in December 2010.
1
I. STRATEGIC CONTEXT AND RATIONALE
A. Country and sector issues
1. Vietnam has made remarkable achievements in economic growth over the last two
decades and is making steady progress toward middle-income country status. The broad-based
growth has been accompanied by an impressive record of poverty reduction. Poverty incidence at
the national level declined from 58 percent in 1993 to 14 percent in 2008.1 However, progress is
uneven. Poverty is more concentrated in rural areas, where 18 percent of the population remains
poor. Poverty also remains substantially higher among ethnic minorities (50 percent) than among
the majority groups (8.5 percent). Among the ethnic minority population, food insecurity and
hunger are widespread, with nearly 30 percent considered ―food poor.‖2 Poverty is also deeper
among ethnic minorities, with a poverty gap index of 14 percent compared with 2 percent for the
Kinh and Hoa populations. Among the poor rural areas of the country, the Northwestern
Mountain Region (the proposed project‘s geographic target) has the highest poverty incidence, at
43.8 percent, compared with the national average for rural areas of 18 percent.3
2. Recent World Bank studies highlight that poverty among ethnic minorities is
multidimensional.4 Ethnic minorities are often found in remote areas where access to roads and
transportation is poor. Restricted physical mobility has been identified as a key factor in poverty.
Access to education, health care, credit, and other services is also constrained, although there
have been significant improvements recently, mostly through targeted interventions. Increasing
incomes through alternative livelihoods, however, remains a serious challenge. Although ethnic
minorities in uplands have on average larger agricultural landholdings than the majority groups,
their farmland is mostly of low quality (typically sloping land with no irrigation) and planted
with staple food and low value crops. Limited attention is paid to upland agricultural research
and extension, reducing chances for poor minority farmers to switch to more-profitable farming
systems. Market opportunities are limited due to physical remoteness and underdeveloped market
information. In addition, people‘s livelihoods in the remote and upland region are highly
vulnerable to natural disasters and risks such as severe weather, landslides, etc.
3. Among ethnic minorities, women tend to be more disadvantaged than men in terms of
access to production resources, extension services, health care, and education. Prevailing
misconceptions and stereotypes on ethnic minorities held by the majority group tend to contribute
to their continued low self-esteem. Some concerns are raised that minorities are not benefiting
from government programs as much as the majority groups due to cultural factors, such as poor
understanding of the policies by minorities, information dissemination issues that do not take into
consideration their language barriers.
1 All 2008 poverty figures are according to preliminary World Bank estimates using the 2008 Vietnam Household
Living Standards Survey. 2 In Vietnam, the food poverty line is customarily set as the cost of a basket allowing a daily intake of 2,100 calories.
3 The poverty incidence is the percentage of people below the poverty line. The poverty gap is the average amount
(measured as a percent of the poverty line) that poor people fall below that line. The larger the gap, the more of an
increase in income is needed to lift people out of poverty. 4 World Bank, Vietnam Development Report 2008: Social Protection, December 2007, and Country Social Analysis:
Ethnicity and Development in Vietnam, 2009.
2
4. The government of Vietnam (GoV) is committed to further poverty reduction efforts. In
acknowledging that growth alone does not solve poverty in remote regions and among certain
socioeconomic groups, it has been implementing a number of pro-poor initiatives. These include,
most importantly, recently introduced budget allocations norms that favor poorer provinces
(―equalization mechanism‖) and various national targeted programs (NTPs). Introduction of the
pro-poor fiscal transfer was accompanied by increased decision-making powers by the provincial
governments over investment plans.5 Deepening decentralization is seen as an opportunity for
more effective use of public resources to address poverty and underdevelopment. At the same
time, these national initiatives have highlighted the need to further develop planning capacity,
especially at the lower levels of administration (districts and communes).
5. Among various NTPs, the Program for Socioeconomic Development in Communes
Facing Extreme Hardship in Ethnic Minority and Mountainous Areas (known as Program 135)
and the National Target Program for Poverty Reduction (NTPPR) have been most prominent in
terms of coverage and budget. While NTPPR under the Ministry of Labor, Invalids, and Social
Affairs (MOLISA) primarily focuses on the provision of social and financial services to poor
households, including subsidized credit, Program 135 - coordinated by the Committee for Ethnic
Minorities (CEM) - uses geographic targeting and provides additional resources to remote
communes and villages. The bulk of Program 135 resources finance commune-and village-level
infrastructure works. MOLISA also has recently launched the program to support poverty
reduction in 61 poorest districts (the ―D-61 Program‖). This intends to allocate relatively large
resources to the districts over the next decade. The Ministry of Agriculture and Rural
Development (MARD) is also developing a new national targeted program for rural development.
6. Program 135 is currently in its second phase (P135-2). This incorporated several design
improvements on the basis of lessons learned from the first phase, including better targeting,
strengthened capacity building, and the introduction of production and livelihoods support.
Nonetheless, this last element of P 135-2 currently focuses predominantly on the provision of
subsidized inputs, such as improved seeds and fertilizer, rather than livelihoods diversification
and promotion of market linkages. The experience from P135-2 suggests that there is significant
room for improvement in service delivery related to livelihoods support for the poor, which
would require much flexibility and more intensive support tailored to specific local constraints
and opportunities. As the P135-2 closes at the end of 2010, CEM is developing a new follow-on
program. The coverage, structure, and operational modalities of this new program remain to be
worked out.
7. While there are a number of national programs with similar or complementary objectives
to the proposed second Northern Mountains Poverty Reduction Project (NMPRP-2), the
government has requested specific investment support to address gaps in both coverage and
execution of the programs that NMPRP-2 intends to address. In addition, NMPRP-2 aims to
improve upon the livelihoods models currently being implemented under various NTPs and to
enhance integration of the diverse investment initiatives by improving the local-level economic
development planning process.
5 Under 2002 Budget Law, which came into effect in 2004.
3
B. Rationale for Bank involvement
8. Over the past decade, the Bank has provided substantial support to and gained valuable
experience in working with GoV on its targeted poverty alleviation efforts at the commune level.
In particular, the Bank has effectively supported two community-driven development (CDD) type
operations: the First Northern Mountains Poverty Reduction Project (NMPRP-1) and the
Community Based Rural Infrastructure Development Project (CBRIP). These operations not only
helped finance the provision of critical infrastructure and related services in some of the poorest
regions of the country, they also served to enhance local-level planning capacity and ownership
through innovative approaches based on CDD principles.
9. The Bank would bring to a proposed second Northern Mountains project substantial
international experience with community-based and local-level development and with sustainable
livelihoods improvement for the poor. The Bank is a leader in promoting CDD and community-
driven local development in all regions of the world, including East Asia, from which the Bank
draws significant implementation experience and expertise. Its work in sustainable livelihoods,
most successfully applied in South Asia, has demonstrated the value of building on social capital
(created through group formation and capacity building) and linking public sector investments
with private sector initiatives for household livelihood improvement and community action
around planning, social audits, and safeguarding public assets.
10. The Bank is also supporting Program 135 through a programmatic series of three
development policy loans (DPL) running from 2006 to 2010. These DPLs support the
strengthening of government policies and implementation of targeted assistance to poor and
remote ethnic minority communities. Specific policy issues relate to poverty targeting, to
decentralization, participation, and empowerment, to fiduciary transparency and accountability,
and to monitoring and evaluation. Since 2006, two DPLs worth a total of US$150 million have
been approved and disbursed to date. A third DPL for an estimated of US$100 million is
scheduled for approval by the end of 2010, to coincide with the close of Program 135-2.
11. While investments by government and various development partners in poverty reduction
programs in the Northern Mountains regions have been significant over the past several years,
poverty data still suggest that more needs to be done. In addition, while on average the Northern
Mountains regions (northeast and northwest) have the highest overall poverty rate in the country,6
there are significant variations in the level of poverty by provinces, districts, and communes,
suggesting that more specific targeting of needs and constraints is required.
12. The proposed project's value in the Vietnam context is the extent to which it serves as a
bridge between the large number of disparate activities supported directly by nongovernmental
organizations (NGOs) and donors and the more policy-based NTPs and P-135, which are
working at the national level. Experience under P-135 implementation clearly indicates that there
is limited space for significant innovation, as all activities are driven by guidelines that have the
status of or are near policy to GoV. Accordingly, NMPRP-2 has an important role in
demonstrating to GoV the effectiveness and scalability of innovations in key areas, while
6 Average poverty gap for Northern Mountains overall was 30.2 percent. Source: General Statistics Office (2006).
4
building comfort that these will not undermine broader political concerns. Specific areas where
this has become apparent under P-135 are the following:
Broader-based approaches to livelihood support that look beyond the provision of
subsidized inputs and subsistence agricultural production
Extensive use of ethnic minority languages in official training, etc., to improve
participation in general and specifically of women while not undermining official efforts
to expand fluency in Vietnamese
Strengthening and demonstrating administrative capacity for fully empowering
communes to manage investments, including design, contracting, and oversight
Identifying a practical process for distributing operation and maintenance (O&M) funds
and accounting for their use consistent with the O&M objective
Integrating planning approaches to avoid duplicative and contradictory functions and
procedures for participatory budgeting, planning, and reporting
Developing monitoring and reporting systems that go beyond traditional reporting mainly
on inputs to also cover outputs and qualitative aspects of service delivery.
13. In light of the above, Bank financing of a specific investment operation that would
support poverty reduction in the Northern Mountains region is considered appropriate given the
targeting of the poorest districts and communes within the selected provinces, the piloting of
innovative approaches for livelihood support, O&M, disaster risk preparedness, etc., and the need
for enhanced capacity building and technical assistance in these areas of innovation, particularly
for the weaker provincial and local government authorities targeted under the project.
C. Higher-level objectives to which the project contributes
14. The proposed project will contribute to poverty alleviation and the eradication of hunger
in the Northwestern Mountains region in a manner fully consistent with GoV‘s Socio-Economic
Development Plan (SEDP) for 2006–2010. As the SEDP notes, this will be accomplished by
investing in productive infrastructure and supporting the engagement of the poor in agriculture
and off-farm activities, with priority emphasis on poor districts and communes. The proposed
project also broadly supports the sectoral priorities of the Northern Midland and Mountainous
Region that stress agricultural diversification and development of agri-food industries for
domestic and export markets.
15. The proposed project is fully aligned with the second pillar of the World Bank‘s Country
Partnership Strategy (CPS) for 2007–2011, which aims at strengthening social inclusion. More
specifically, the project directly addresses three CPS outcomes: better access to markets and basic
social services for the rural poor, ethnic minorities in rural areas more fully integrated into
development processes, and a reduction of vulnerability to natural disasters and other shocks. The
project also contributes to the fourth pillar, strengthening governance system, through its
outcome related to decentralized and participatory planning approaches.
5
II. PROJECT DESCRIPTION
A. Lending instrument
16. It is proposed that the intended project be supported through a Specific Investment Loan
financed by an IDA Credit of approximately US$150 million equivalent.
B. Project development objective and key indicators
17. The development objective of the proposed project is to enhance the living standards of
the project beneficiaries by improving their access to productive infrastructure, the productive
and institutional capacity of local governments and communities, and market linkages and
business innovations. The outcome indicators to be used to assess achievement of the project
development objective (PDO) are:
At least 60 percent of the project beneficiaries report satisfaction on the selection, design,
and implementation of project activities.
The project beneficiaries report an improvement in on-farm and off- farm income of at
least 10 percent over the life of the project.
C. Project approach and components
18. Project coverage and strategy. The project targets the poorest region in Vietnam
(Northwestern Mountains) and would cover the most remote and difficult-to-reach communes,
where the majority of project beneficiaries are ethnic minorities (between 94 and 100 percent of
total population) who are significantly poorer than other population groups.7 The project would
work in 2,366 villages, in 230 communes, and in 27 districts of the six provinces of Lao Cai, Yen
Bai, Son La, Hoa Binh, Dien Bien, and Lai Chau (of which the first four participated in the first
Northern Mountains project—NMPRP-1). All villages within selected communes will be
eligible to benefit from project support and investments.8
19. Key design features. Overall, the project would apply a community-driven development
approach to guide investments in infrastructure and services at village and commune levels. A
decentralized and participatory process refined under NMPRP-1 will be used, with greater
support provided to and resources managed directly by communes and villages under the new
project. The project would support public investments for productive infrastructure, based on the
systems and procedures developed under the first project. It will also provide small-scale grants
and other support (training, extension services, etc.) to individuals, groups of poor households,
and small producer groups to enhance their livelihood opportunities. These new private
investment/livelihood support elements of the project will first be piloted to gain a better
understanding of how the appraised framework (see Annex 4, Attachment 4.2, summary of
implementation arrangements) will work before scaling up.
7 Refer to Annex 1 for detailed poverty statistics on regions and population groups in Vietnam.
8 The total population of the targeted project communes is approximately 670,000. The total estimated number of
project beneficiaries will be a subset of this number; given the demand-driven nature of the project, however, the
number of project beneficiaries is not yet known. The project MIS will regularly track and report on beneficiary
numbers.
6
20. Project structure. The project has four components: district economic development,
commune development budget, capacity building, and project management. The first two
components represent approximately 80 percent of project funding, and would finance both
public infrastructure investments and household-based livelihood support, as described below. A
more detailed description of these components and subcomponents is found in Annex 4. The
Project Implementation Manual (PIM) drafted by the government outlines the main steps and
responsibilities for the implementation of these various components. The indicative values of the
components shown below in Table 1 reflect estimates for IDA financing only and do not include
the unallocated portion of the proposed credit (an estimated US$27 million).9
Table 1: Overall Project Costs and Financing (US$ million)
PROJECT COMPONENTS
GOV
(US$ M)
IDA
(US$ M)
Total
(US$ M)
Share of
Total IDA*
Share of
Total
1. District Economic Development 5.6 57.0 62.6 38% 38%
2. Commune Development Budget
39.9
39.9
27%
24%
3. Capacity Building 10.0 10.0 7% 6%
4. Project Management 7.9 16.1 24.0 11% 15%
5. Contingencies 1.5 27.0 28.5 18% 17%
Total Project Costs 15.0 150.0 165.0 100% 100% * Percentage calculation is for illustrative purposes, as percentage of financing sources within components varies.
21. Component 1: District Economic Development (US$57 million). The objective of this
component would be to provide investment support to the District Socio-Economic Development
Plans, focusing on productive and economic infrastructure for increased agriculture productivity,
direct local employment, and income generation, and to explore market linkages for livelihood
opportunities for the poor.
Subcomponent 1.1: Economic development investments (approximately 90 percent of the
component value) will finance commune-level infrastructure works of a scale that
requires district management of the procurement process. Identification and prioritization
of these investments will be carried out annually (based on a negative list of ineligible
investments) under the leadership of the Commune Development Board (CDB)10
with
support from Commune Facilitators (CFs). The CFs guide a participatory prioritization
and planning process (detailed in Annex 4, Attachment 4.1) at village and commune level
and help prepare the plans for review by the District Project Management Unit (DPMU)
and endorsement by the District People‘s Committee (DPC). Only those investments
prioritized by the CDB would be considered for financing under subcomponent 1.1.11
Subcomponent 1.2: Diversification of opportunities for market linkages and business
innovation support (approximately 10 percent of the component value). This
subcomponent is designed to help provincial and district project teams to develop clear
understanding of pro-poor livelihoods in the project areas and to facilitate and promote
9 This sizeable amount set aside as unallocated will allow for both increased allocation to provinces that perform well
and increased funds for livelihood investments, depending on the outcome of the pilot phase. 10
The Commune Development Board includes representatives of all villages in the commune, including at least one
woman representative per village. 11
However, the DPMU could exclude a selected district-level investment from the commune‘s annual plan based on
knowledge of the District-level Socio-Economic Development Plan and complementary inputs from other programs.
7
diversification of the livelihoods of the rural poor through piloting better market linkages
and business innovation. It will support specific efforts to link supply side, market, and
business institutions with the poor. It would initially be undertaken as a pilot scheme to
build up the project‘s knowledge base and refine implementation modalities. The
subcomponent would finance the following: research and analytical studies to identify
market opportunities and new products/services and to identify constraints to small
producer entry into available markets; partnerships with banks,12
NGOs, and the private
sector to provide dedicated linkage support to rural producers and microenterprises; and a
business innovation fund for providing grants on a competitive basis to promote
innovative business ideas and unconventional approaches to business linkages by or for
the rural poor.
22. Component 2: Commune Development Budget Component (CDBC) (US$40 million). This component builds on a particular area of NMPRP-1 success, financing small-scale public
infrastructure subprojects for which villages and communes take direct responsibility. The PIM
outlines the agreed-upon process for planning and implementing these commune-level activities,
which will have three distinct purposes: productive infrastructure such as road repair, micro-
irrigation systems, markets, etc.; livelihood support to the poor to assist them to form common
interest groups, develop necessary skills, and explore linkage with rural finance institutions and
markets; and ensuring women‘s participation in and benefits from the project through targeted
support to commune women‘s groups. As with subcomponent 1.2, the second and third
subcomponents here will be implemented initially on a pilot basis in selected districts in
partnership with NGOs. A detailed implementation plan for the subcomponents is required within
six months of effectiveness.
Subcomponent 2.1: Village infrastructure improvements (estimated 50 percent of total
component value) will finance small-scale infrastructure works, mostly at the village
level, identified through the same participatory process outlined above (and detailed in the
PIM). The average value of these investments is around US$6,000 per subproject. To
facilitate prioritization of subprojects, each village will know their overall annual budget
allocation under the CDBC component, of which up to 50 percent may be used for public
investments under subcomponent 2.1.
Subcomponent 2.2: Livelihoods support and production services (estimated 30 percent of
component value) would support: the formation of common interest groups (CIGs)
around specific activities; technical assistance and services for business development,
skills training, product design and development, bulk procurement of raw materials, and
extension services; help to gain access to finance and risk management services; the
provision of small-scale productive infrastructure (e.g., milling equipment, storage
facilities, etc.); and market linkages. The project could also consider supporting producer
groups or associations.
Subcomponent 2.3: Support for women‘s social and economic development activities
(estimated 20 percent of component value) that are specifically selected by groups of
village women for the enhancement of their economic and social status. Proposed areas
of assistance include supporting women‘s groups‘ engagement in thrift and credit
activities, literacy and numeracy training, linkages with government institutions for
12
The project does not intend to capitalize any micro-credit or finance schemes but instead to help facilitate access to
existing sources of microfinance, such as the Bank of Social Policies.
8
efficient delivery of social protection and public services, and information dissemination
in relation to relevant social issues (e.g., drug addiction, child education, child labor, and
HIV/AIDS). The project would provide subproject grants against action plans to be
prepared by women‘s groups.
23. Component 3: Capacity Building (US$10 million). This component will include
various capacity-building efforts to develop the human resource base of all project stakeholders at
central, provincial, district, commune, and village levels. The strategy builds on the successfully
run training program under NMPRP-1 that worked closely with lead provincial training
institutions (PTIs), which develop and deliver different types of training courses. Specific
training would be oriented broadly to either project management and implementation knowledge
and capacities or to specific skill areas linked to livelihood opportunities. The government‘s draft
capacity-building strategy that was appraised by the Bank is contained in Annex 12. Based on
this strategy, the government will develop a detailed 18-month capacity-building plan as a
condition of effectiveness.
Subcomponent 3.1: Socioeconomic development planning will build capacities of district
and commune staff to prepare and facilitate the government‘s SEDP process to improve
the integration of investment projects at the lowest level of government to avoid
duplication and overlap. The subcomponent is fully aligned with GoV‘s efforts to
facilitate the decentralization process by strengthening local-level planning capacities,
focusing particularly on the commune level.
Subcomponents 3.2 and 3.3: Commune and village cadre training and district staff
training for administrative staff of districts and communes and for village representatives,
covering topics such as participatory planning, subproject procurement, financial
management, subproject supervision, monitoring and reporting, etc., which will be
provided in accordance with a detailed capacity-building plan to be developed by each
province. Training will be provided by PTIs.
Subcomponent 3.4: Employment related skills training aims to enhance necessary skills
for local employment based on identified opportunities and assessment of local labor
force needs and constraints among potential beneficiary groups (particularly village youth
and young adults). This subcomponent will also be initiated on a pilot basis and only
after work under subcomponents 2.2 and 2.3 has begun to facilitate the identification of
the most likely skill needs and participants. This training may be provided by PTIs, as
with subcomponents 3.2 and 3.3, or through other (NGO or private training sector)
channels depending on the particular skills identified.
Subcomponent 3.5: Safeguarding assets of communities and households aims to build the
communities‘ knowledge of and capacity to understand and mitigate natural disaster risks
and to improve efforts to address risks in investment and subproject design and
implementation. An analysis of options for integrating disaster risk management issues in
subproject selection, design and implementation—such as reforestation, flood protection,
reinforced terracing, weather-resistant livestock housing, construction specifications, and
application of local technologies—is provided in Annex 4, Attachment 4.3.
24. Component 4: Project Management (US$16 million). This component is to ensure
effective and efficient project management through facilitation of various implementation,
coordination, communication, information sharing, learning, and quality enhancement efforts. It
9
will include a robust monitoring and evaluation system, communication and interprovincial
exchanges and lessons disseminations, internal and external supervision and auditing, overall
project coordination and guidance, provision of essential equipment, and project administration.
Project management will be based on the systems and procedures developed under NMPRP-1
and will, in many cases, involve the same staff at central, provincial, district, and commune
levels.
25. Given the pilot nature of the livelihoods subcomponents (1.2, 2.2, 2.3, and 3.4), a
thorough review of progress and performance will take place at the time of the project‘s mid-term
review to determine the scope and scale of potential expansion. Intermediate performance
indicators to be used to assess progress will include the following: the establishment of
productive partnerships between producer groups and market-based entities (rural finance
institutions, retailers, etc.) and the identification of innovative business opportunities and grants
provided under subcomponent 1.2; the formation of CIGs, the preparation of business plans and
support for them, and community-level extension workers in place for subcomponent 2.2;
women‘s groups supported with group action plans approved and linkages to commercial banks,
such as Vietnam Bank for Social Policy credit schemes, for subcomponent 2.3; and the number
of young people trained in market-oriented skills for subcomponent 3.4.
26. Technical assistance. The government has agreed that a portion of project management
costs would go toward financing international and national short- and long-term technical
advisors (individual consultants) in key areas such as livelihood support, procurement, financial
management, and internal auditing. The project will also hire consulting firms to update the
accounting software and train relevant financial management staff, conduct the baseline and end-
of-project surveys (including appropriate qualitative methods), provide independent monitoring
services to the project, establish and strengthening the capacity for internal audit procedures and
processes, and conduct the annual financial audit. Partnership with local NGOs and/or technical
agencies would also be established to provide further technical support that could be locally
available in the project areas.
D. Lessons learned and reflected in the project design
27. The Independent Evaluation Group of the World Bank rated the NMPRP-1 satisfactory on
both implementation and achievement of poverty reduction objectives. The proposed operation
will make full use of best practices and lessons generated under NMPRP-1 by building and
improving on proven successes. Experienced staff, partners, and arrangements under NMPRP-1
will be retained to capitalize on skills and knowledge developed and to ensure effective
horizontal cross-learning.
28. The proposed project incorporates the following lessons learned from the first project, as
well as from other relevant operations in Vietnam and elsewhere.
29. Importance of capacity building. NMPRP-1 demonstrated that local institutions such as
Commune Development Boards (CDBs) and Commune Supervision Boards (CSBs) are
important catalysts of local intervention. Intensive training and capacity building for these
entities, coupled with efforts to increase support capacity at the district level, played a critical role
in facilitating effective ownership of development interventions and delivery of pro-poor
10
outcomes. NMPRP-2 will follow the successful model and provide strong capacity-building
support through training and refresher courses for all the key project stakeholders.
30. Adequate communications and sensitization. These were shown to be critical under
NMPRP-1 to ensure appropriate levels of involvement and ownership by community members
and in particular among ethnic minority beneficiaries. The capacity-building component of
NMPRP-2 will include a specific information, education, and communication strategy. Particular
attention will be paid to the dissemination of information in local languages and using other
methods to overcome communication barriers (such as audio books and picture galleries) to
better engage beneficiaries.
31. Decentralized project management. The successful outcomes achieved under NMPRP-
1 were strongly related to the project‘s efforts to decentralize planning and implementation
decisions, and fund management to provincial, district and commune authorities. NMPRP-2 will
continue to promote such decentralized responsibilities and intends to increase the role and
responsibility of the communes in this process. The first project also illustrated the importance of
making appropriate adjustments to management procedures (for procurement and management
information system, for instance) to reflect commune and district-level capacities, which
NMPRP-2 will apply.
32. Mainstreaming women’s participation. Experience from NMPRP-1 suggests that a
more proactive approach to women‘s participation is needed to ensure that their priorities are
reflected in commune-level planning processes. The proposed project would provide targeted
assistance and set aside funding (approximately 20 percent of the component budget) to
exclusively support women‘s self-identified economic and social needs.
33. Attention to operation and maintenance. The Implementation Completion and Results
Report of the NMPRP-1 highlighted that O&M requirements for infrastructure financed under the
project were often not being met by communes and villages (as the users of the infrastructure),
leading to failure of services and deterioration of works. This was particularly the case in the
more remote villages where access by district service providers was constrained. In view of this
constraint and its likely negative impacts on sustainability, NMPRP-2 will establish an O&M
fund (valued at 6.5 percent of infrastructure investments) that will be managed by communes and
villages and will support the formation and training of O&M teams to help ensure continuation of
intended services from investments. It is expected that the project will clearly demonstrate the
value of such investment so that funding subsequently would become standard to all investment
operations (both government and development partners).
34. Natural disaster risk management. The project area is susceptible to natural disasters,
particularly landslides, flash floods, and severe cold weather. In order to safeguard project assets
from such risks, NMPRP-2 will ensure measures on natural disaster risk management are
incorporated in the standard design of infrastructure investments. Draft guidelines for this
purpose were prepared with provincial authorities with support from the Bank‘s Global Facility
for Disaster Reduction and Recovery (see Annex 4, Attachment 4.3). All the key stakeholders
will be trained on the concept and on practical application of the disaster risk mitigation.
11
E. Alternatives considered and reasons for rejection
35. Three alternative options for supporting the development objectives of the NMPRP-2
were considered prior to full preparation of the current proposed operation: additional financing
of NMPRP-1, financing of a repeater project, and additional policy lending support through the
government‘s P135-2, which also targets poverty reduction among disadvantaged ethnic
populations in the Northern Mountains as well as other regions. There are some advantages and
disadvantages to these three options:
Additional financing. Because NMPRP-1 closed at the end of 2007, additional financing
would have required a retroactive extension of the project or an exception to the policy.
Given the complexity and time required to manage such a process, the GoV‘s Ministry of
Justice did not recommended this option. The proposed inclusion of additional innovative
features under NMPRP-2 also made this option infeasible.
Repeater project. Similarly, while the proposed NMPRP-2 builds on the basic approach
and successful experience of the former project, it also incorporates design improvements
and innovations, in particular to focus more on livelihoods improvement and local area
business development, as well as an expansion into two new provinces, which warrant a
new project design.
Support through P135. The Bank is committed to supporting P135-2 in 2010 (assuming
adequate progress on agreed funding triggers) and will participate in discussions with the
government and partners about possible follow-on program lending from 2011 onward.
Irrespective of a Bank decision to continue supporting P135, there is a strong rationale to
support more targeted assistance to specific districts and communes along with enhanced
support around specific livelihoods issues and capacity-building needs, as proposed under
NMPRP-2, which could be constrained under a DPL.
36. Therefore the timing of the closure of NMPRP-1, the piloting of the livelihoods support
subcomponents, the testing of additional innovations (for O&M and disaster risk management
support), the desire to ensure continued targeted support in the poorer areas of Northern
Mountains, and further deepening experiences with local CDD approaches all led the Bank to opt
for a new sector investment loan for this purpose.
III. IMPLEMENTATION
A. Institutional and implementation arrangements
37. Project management. The Ministry of Planning and Investment (MPI) will take charge
of overall project coordination at the central level, while provinces will be responsible for project
implementation. At national level, the Central Project Coordination Office (CPO) will be
established at the Department of Agricultural Economics in MPI and will facilitate overall
coordination with provinces, as well as serve as the focal point in relation to the World Bank and
relevant central government agencies. In each project province, a Provincial Project Management
Unit (PPMU) will be established within the Department of Planning and Investment (DPI), and at
the district level, District Project Management Units will also be created. Commune Facilitators,
who will be recruited competitively and hired by the DPMUs, would provide vital support to the
communes in particular in the process of subproject planning and implementation. At the
commune level, a Commune Development Board will be established to oversee planning and
12
implementation. The livelihoods subcomponents will be managed through a team of technical
advisors and national project staff, including Business Development Officers at the district level
and Commune Professionals at the commune level.
38. A combination of seconded government personnel and project consultants will staff these
units (see Annex 6 for a more detailed discussion of proposed staffing and key responsibilities of
these management units). These staff will be responsible for all procurement, financial
management, project supervision, and reporting—based on successful systems and procedures
developed under NMPRP-1, modified and agreed upon with IDA, and outlined in the PIM. More
than 60 percent of the provinces, districts, and communes were involved in the first phase project,
so the establishment of the indicated management units will be a reasonably simple and rapid
task.
39. The provincial training institution in each province will oversee the various courses of
training and other capacity building activities for provincial, district and commune level staff,
village representatives and individual beneficiaries. These capacity building activities would be
organized and implemented on the basis of actual reasonable expenses following the
government‘s financial management procedures and cost norms. All training programs,
seminars, workshops, study tours, and other learning events to be financed under the project will
be subject to review by the Bank. Each year the implementing agencies will prepare and submit
a training/learning plan for review by the Bank. The training program will provide details of the
individual training/learning events, including the objective(s) of the event, the number/level of
the target group, the estimated cost, the location of the program, the duration of the event, and
other relevant details.
40. Project oversight. A Commune Supervision Board will be established at each commune
to monitor project-supported activities. CSB members would include representatives of the
People‘s Council, the Fatherland Front and other unions, and local people. The CSB and CDB
report to and get authorization from the Commune People‘s Committee. In each province, a
Provincial Project Steering Committee (PPSC) will be established to oversee the project
implementation and facilitate coordination with other projects and programs. The PPSC will be
chaired by the Chairperson or Vice Chairperson of the Provincial People‘s Committee. Director
of the DPI will serve as Standing Vice-Chair. Other members include the Directors of the
Departments of Finance, Construction, Transportation, Trade and Industry, Agriculture and Rural
Development, Natural Resource and Environment, Education, Labor, Health, Ethnic Committee,
State Treasury and chairpersons of the DPCs. Representatives of the Women‘s Union (WU) and
Farmers‘ Association will also be included. The structure for overall project management and
oversight is presented in the figure in Annex 6.
B. Monitoring and evaluation of outcomes/results
41. The design of the monitoring and evaluation (M&E) component for the NMPRP-2 is
based on the M&E system of the NMPRP-1, which was broadly considered successful. Annex 3
contains the project‘s results framework, proposed monitoring arrangements, and a description of
the M&E strategy. Regular monitoring of the project will be done through a simplified
management information system developed for the project and built to link with MPI‘s Aligned
Monitoring Tools used to track all development assistance–financed activities (inputs and
outputs) on a quarterly basis. Evaluation of project outcomes and impacts evaluation will be
13
based on a randomized sample baseline and end-of-project survey that includes a control group of
non-treatment villages. Specific follow-up surveys also will be conducted at project mid-term to
assess specific outcomes. The baseline survey terms of reference (TORs), methodology,
sampling, and questionnaire have been prepared and developed. The survey will be conducted by
the General Statistics Office (under MPI), and the analysis of the survey results will be done by
an independent technical firm.
42. Qualitative data collection and participatory monitoring methods will also be used in
monitoring of project results. This includes the application of citizen report card methods at the
mid-term and final project review, a ―most significant change‖ model to track groups of
beneficiaries (one group per district) over the course of the project, and the use of photo stories to
record community-level results.
43. Qualified M&E staff will be incorporated into the DPMUs, PPMUs, and CPO to manage
the project M&E system and ensure timely reporting on outputs and outcomes. At central level, a
dedicated information technology professional will also oversee the MIS and the project Web
page. MPI will also contract with an independent monitoring agent to conduct specialized
studies and surveys during the project to closely monitor the intermediate results of the pilot
livelihoods activities and to rapidly assess project implementation and outcome issues.
44. The intermediate indicators (and proposed targets) to be used to regularly measure
progress toward achieving the PDO are:
At least 60 percent households in the project areas report improvement in accessibility to
basic infrastructure by project‘s end
Improvement in agricultural and non-farm output by at least 10 percent by the end of the
project
At least 60 percent of villagers report satisfaction with public services delivery
At least 60 percent of women and ethnic minorities report satisfaction with public
representation and service delivery
At least 60 percent of communes integrate the NMPRP-2 into their SEDPs
At least 60 percent of villages and communes have natural disaster mitigation plans and
implement readiness exercises13
on an annual basis
The number of households involved in non-farm income-generating activity increases at
least 30 percent by project‘s end
A total of 30 percent of households report improved opportunities and public support to
start or improve businesses by project‘s end.
C. Sustainability
45. The project aims to address sustainability through three distinct elements: the application
of a demand-driven approach to much of the investments that would enhance community input
and commitment to various investments, support of economic livelihoods and the explicit effort
13
―Readiness exercise‖ is the execution (or ―demonstration‖) of the natural disaster mitigation plans available at the
villages and communes.
14
to link farmers and community groups with markets, and support of specific enabling strategies—
including integration with broader development planning (through the SEDP process), disaster
risk mitigation, and strengthening O&M investments.
46. The sustainability of the public sector investments under the project (subcomponents 1.1
and 2.1) will be improved by three specific aspects of the project. First, the application of a
demand-drive process for identifying most of these investments should, as has been shown in
other CDD programs, increase commitment to and willingness to help sustain them. Second, the
intended linkages to the overall SEDP process will enhance synergies and reduce duplication,
thus increasing available resources for sustaining those investments ultimately supported at
commune level. Last, the specific support for the O&M fund and O&M teams under the project
will help address a key constraint in sustaining these public investments. In addition, recently
approved national projects to improve road connectivity between all communes and districts will
also raise the chances that both public services and private enterprise activities will be sustained.
The support to O&M will be closely monitored and carefully assessed at mid-term review to start
phasing out project financing and phasing in local government or community financing.
47. Sustainability of private investments under the project (subcomponents 1.2, 2.2, and 2.3)
would depend on, among other factors, the economic viability of chosen activities and the
strength of the groups. The project will explore and incorporate appropriate measures that ensure
sustainability, such as financial and economic analysis of the proposals and ―milestone‖ criteria
(e.g., establishing a bank account, a business plan, etc.) to assess group capacity and maturity.
Experience from similar projects indicates that beneficiary groups and households will face a
critical test of sustainability after the project closure, when direct project support, most
importantly from Commune Facilitators, is withdrawn. Capacity-building activities would
address this aspect, and specific measures will be worked out to ensure continuity of
livelihood/business operations of groups (such as linking with microfinance institutions, support
to organize producer groups into federations, etc.).
48. In addition, increased emphasis on capacity building of, in particular, lower-level cadres
of government staff and of beneficiaries (in participatory planning and monitoring, community
execution of investments, and livelihood activities) should help strengthen the long-term
sustainability of project investments. The government‘s demonstrated commitment to the project
preparation and actions taken toward implementation readiness also suggest a greater chance of
sustainability. The strong M&E system to monitor outcomes and to undertake specialized
surveys to analyze specific project dynamics is also intended to learn lessons quickly to facilitate
management action and project adaptation as necessary. A series of thematic forums/platforms
will be organized with MPI and other stakeholders (MARD, MOLISA, CEM, etc.) to share
results and lessons from supervision missions and M&E.
D. Critical risks and possible controversial aspects
49. The table below presents the critical risks to the achievement of both the overall project
development objective and to the component results, as well as presents the mitigation measures
that have been included in the project design to address these risks. Risk is classified as either
high (H), substantial (S), moderate (M), or low (L), according to likelihood of its occurrence and
the magnitude of its potential adverse impact.
15
Risks Risk
Rating Mitigation Measures
Residual
Risk
Rating
To Project Development Objectives
Infrastructure built under the
project may suffer sustainability
problems, reducing expected
positive impacts on livelihood
opportunities for the poor
S Incorporation of natural disaster risk
management measures in the design
of civil works
Provision of O&M fund
Emphasis on productive infrastructure
with clear economic benefit
M
Preference for public infrastructure
limits impact on productive
outcomes and household
consumption improvements
S Sensitization on purpose of funds
Fixed maximum allowable funding
for public infrastructure
Mid-term review to measure
improvements and allow for necessary
adjustments in project strategy
M
Plethora of targeted poverty
programs, posing a risk to
successful implementation of the
project
M Support of integrated planning down
to commune level to ensure all
available resources are reflected in
overall development plans
L
To Component Results
Scope for innovative business
development and livelihood
improvements is limited in the
project provinces
S Situation and value-chain analysis and
research on opportunities, which will
help the beneficiaries make informed
decisions
Use of market and resource driven
approaches (top-down and bottom-up)
to identify all potential options for
market linkages
International and national expertise to
be mobilized to operationalize
component
Close monitoring of component
performance through independent
monitoring agent to adjust as needed
M
Microfinance institutions do not
support livelihoods activities under
project
S Partnerships to be developed with
other complementary efforts (e.g.,
rural microfinance)
Project to enhance linkages to
microfinance institutions through use
of minimum graduating criteria for
CIGs/stakeholder groups
M
New guidelines and limits on
training costs create disincentives
for training institutes and trainees,
undermining capacity-building
efforts
S Sensitization of provincial authorities
and training institutes regarding the
source and limits of funds
Optimizing workshop approach to
allow for higher allowances
Close review of progress under
component and adjustments to
strategy as needed
M
16
Risks Risk
Rating Mitigation Measures
Residual
Risk
Rating
Local capacity to implement the
project is limited at communes and
district level, particularly in two
new provinces
S Enhanced capacity-building activities
to be initiated at project start-up
Establishing a specific mentoring link
between old and new provinces, and
promoting regular learning and
exchange visits and events
M
Inadequate harmonization of
similar poverty reduction efforts
reduces impact through duplication,
confusion, and/or overloading of
local staff
S Project support of integrated SEDP
process
Task team participation in continued
discussions around harmonization of
poverty reduction efforts
M
Elite capture or corruption
undermines utility of investments
M Transparent subproject prioritization
procedures to be facilitated by trained
district-level staff (CFs)
Other documented procedures on
transparency, grievances, and
corruption
Fiduciary controls, including internal
and annual audits, to be applied.
M
Weak financial management (FM)
staff capacities at commune and
district levels delay or limit
effectiveness of investments
S Simplified FM procedures and
language in FM manual and early
targeted training for all fiduciary staff
Specific support of communes to be
provided by district FM staff
Internal audits (IA) to regularly
monitor and identify corrections
M
Procurement weaknesses in new
provinces/districts and contractor
collusion concerns
H Targeted training and simplified
procedures to support new staff
Mentoring of new provinces/districts
by old provinces
IA to also monitor procurement issues
and confidential grievance mechanism
to be implemented under project
S
Weak application and/or
monitoring of environmental and
social safeguards, and concerns
regarding consultations with
indigenous peoples
M Environmental Management
Framework (EMF) includes simple
checklists and clear guidelines to
ensure application
Negative list to avoid any potential
conflicts with Bank policies
Enhanced sensitization and outreach
efforts to facilitate appropriate
consultations with indigenous
peoples/ethnic minorities
M
Overall Risk Rating S M
E. Credit conditions and covenants
50. The conditions for credit effectiveness are:
17
The project implementation manual acceptable to IDA adopted by MPI
An 18-month capacity building plan acceptable to IDA adopted by MPI and Project
Provinces
Ministry of Finance (MOF)–issued circular on the project financial management
acceptable to IDA.
51. The covenants applicable to project implementation are:
CPO, PPMUs, DPMUs, and CDBs maintained at all times during project implementation
with staffing, functions, and responsibilities acceptable to IDA
Establishment of Provincial Steering Committees and Commune Supervision Boards
A combined annual work plan, including procurement plan and budget for activities
related to each project component for each province and for CPO
Semiannual progress reports in form and substance agreed to with IDA on or before July
30th and January 30th of each year, beginning in January 2011
Finalization of a mid-term project evaluation in accordance with terms of reference to be
agreed upon with IDA at least one month prior to the date of the project mid-term review
Annual audit reports and management letter submitted within six months of the close of
each project year, starting in December 2010.
IV. APPRAISAL SUMMARY
A. Economic and financial analyses14
52. Cost-benefit analysis. The estimated total investments in private goods over the course
of the project are expected to be approximately US$48 million. A large portion of the private
goods investments is expected to focus on agricultural production, both crops and livestock.
Given their current and projected market prices, sales of crops and livestock (after meeting
household consumption needs) is expected to reach a total of approximately US$122.2 million
during the entire project (see table).15
Total Project Financial Investment and Costs for Private Goods
Investments/Costs (US$) Year 1 Year 2 Year 3 Year 4 Year 5 Total
TOTAL RETURN 12,950,748$ 16,029,186$ 27,958,572$ 30,539,605$ 34,692,261$ 122,170,374$
53. It is anticipated that the total public goods investments will be approximately US$48
million over the course of the project. According to the Implementation Completion and Results
Report (ICR0000743) for NMPRP-1, completion of public goods investments varied according to
types of investments. Specifically, the following level of public goods investments were
completed during the life of the project:
14
See Annex 9 for a more detailed discussion of the economic and financial analysis for the project. 15
Revenue from livestock includes sales of chickens, eggs, hogs, and piglets.
18
Roads: 75 percent
Irrigation: 100 percent
Clean water: 80 percent
Education/training: 100 percent
54. Based on experience from NMPRP-1 and for the purpose of the economic analysis, the
following public goods investments schedule was applied (see table).
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Clean water supply 10% 15% 15% 20% 20% 80%
Latrine 15% 25% 25% 35% 0% 100%
Electricity 5% 15% 25% 30% 15% 90%
Road 5% 10% 20% 20% 20% 75%
Irrigation system 10% 15% 25% 25% 25% 100%
Small scale equipment 5% 25% 25% 20% 25% 100%
Education/training 5% 15% 25% 30% 25% 100%
Estimated Percentage of Public Goods Investments Completed
55. Unlike the private goods investments, direct financial benefits from public goods
investments are difficult to measure. However, it is assumed that such investments will
contribute to improving access to markets and market linkages as well as on-farm productivity
through the introduction of technical assistance, irrigation, and agricultural inputs. In this
context, for example, market rather than farm-gate prices for outputs (chickens, eggs, pigs, and
crops) were used for the economic and financial analysis.
56. Internal rate of return (IRR). The cost-benefit analysis of this project presents the same
limits as in all economic analyses of projects in developing countries—namely, lack of reliable
time series data required for an appropriate calculation, difficulty in finding the appropriate
shadow prices, and difficulty in precisely quantifying the economic benefits and welfare gains or
losses. Based on primary field data, however, an economic model was developed to help
calibrate the economic and financial benefits of the private and public goods investments
associated with NMPRP-2. Based on this model, the internal rate of return for the base case is
estimated to be approximately 20.1 percent for the life of the project. This IRR for the overall
project is based on the assumption that direct benefits are accrued to poor households from both
public and private goods investments, and it does not account for any indirect benefits likely to
be accrued by poor and non-poor households from public goods investments. As such, the base
case result reflects a minimum IRR.
57. Factoring in the possible impact of a doubling of the rate of animal mortality16
or an
incident of severe drought or flood, the base case IRR would be reduced to 5.7 percent and –0.6
percent respectively. The more significant drop in IRR as a result of a reduction in crop yields is
linked to the resulting need of poor households to sell livestock to meet basic food requirements.
Based on a switching value analysis, if both events were to happen, holding all other variables
constant, the IRR would fall to –11.1 percent. However, assuming that an increase in animal
16
This is not an unrealistic concern given that Vietnam has recently suffered from avian flu that wiped out entire
flocks of poultry.
19
mortality rates also leads to an increase in the market price for resulting products, the base case
IRR would actually increase to 30.3 percent.
58. The economic and financial analysis revealed that flood and drought are likely to have a
major negative impact on revenue from crops, and thus reliance on revenue from livestock is
expected to play a major role for poor households. However, the analysis also indicates that the
project is sensitive to the impact of diseases on the production of livestock and the potential
revenue stream of poor households. This suggests that access to and delivery of veterinary
support services, along with a disease prevention and containment plan, are essential for the
success of livelihood support activities.
B. Technical
59. The project builds on strategies, systems, and procedures successfully applied and found
to be technically sound under the first project, the implementation and achievements of which
were assessed overall to be satisfactory. An estimated two-thirds of the intended project
financing will be based on the same implementation arrangements and management structures
used for NMPRP-1. Four of the six participating provinces were involved in the first project, and
many previous government staff will be involved in the implementation of the second project.
As such, from both a technical and institutional perspective, the project is considered particularly
feasible, and readiness for implementation is high.
60. The pre-appraisal mission reviewed the government‘s draft PIM and found the procedures
outlined acceptable, particularly those that govern the public investment subcomponents of the
project (subcomponents 1.1 and 2.1). The government has taken into consideration detailed
comments provided by the mission, and a revised PIM has been prepared for further review. The
capacity-building component builds on the successful delivery of training support under
NMPRP-1, and the government‘s strategy document (see Annex 12) was reviewed by the mission
and also found to be acceptable. A detailed 18-month capacity-building plan will be developed
as a condition of effectiveness.
61. The four subcomponents that would support improved livelihoods opportunities for poor
households and communities represent new approaches for the project where MPI and provinces
have little previous experience. Nonetheless, these subcomponents (1.2, 2.2, 2.3, and 3.4) build
on experiences in Vietnam and on other successful models, particularly from South Asia.
Notwithstanding this, these proposed subcomponents will initially be piloted in a limited number
of districts to test strategies, implementation arrangements, and management structures. The
mission assessed and found the broad approach outlined in the government strategy (see Annex
4, Attachment 4.2) reasonable and is therefore comfortable with initiating pilot activities along
these lines. However, given the limited experience that MPI has with such market-based
approaches, it was agreed that a technical advisor would be hired at the central level to support
the operationalization of the pilot activities and that qualified national livelihood consultants
would be incorporated in the project management structure at central and provincial levels.
C. Fiduciary
20
62. Over the past few years the government has taken several important steps to strengthen its
legal framework to combat corruption and waste. A central piece to these efforts is the 2005 anti-
corruption law that clearly defines corrupt practices, the principles for handling corruption, and
the responsibilities of different ministries and agencies in fighting it. Importantly, the law also
contains provisions to raise public awareness and transparency in procurement actions, provides a
role for civil society, defines a strict code of conduct, and places responsibility for corruption
within any institution with the head of the agency. Ancillary decrees have also been issued to
guide implementation of and further strengthen the law. The Bank has been working with the
government to strengthen relevant institutions dealing with governance and anti-corruption and in
particular is providing advice and financing in support of key areas that require strengthening—
including, among others, tax, customs, and land administration.
63. To help protect individual projects from abuse and at the same time promote broader good
governance practices, the GoV and the Bank have formulated Governance, Transparency, and
Anti-corruption Action Plans (GTAPs) for specific Bank-supported projects in Vietnam. A
GTAP has been prepared and agreed to with the government for NMPRP-2 (see Annex 16). The
GTAP matrix there details the agreed-upon actions that will be undertaken by MPI, by provincial,
district, and commune officials, by civil society, and by the Bank to support increased awareness,
transparency, and disclosure; to strengthen the process controls throughout the project and
individual contract cycles; and to strengthen monitoring, oversight, and enforcement. The CPO
will hold a workshop prior to effectiveness to introduce the GTAP to stakeholders and civil
society representatives and to adjust the plan accordingly. The actions detailed in the GTAP will
be incorporated in the PIM that will be approved and adopted by MPI prior to credit
effectiveness. These actions are both linked to and will support improved performance in both
financial management and procurement under the project.
64. Financial management. Based on an assessment of systems and experiences under
NMPRP-1 and discussions with financial management personnel at the central and provincial
levels, the task team has concluded that the project meets the minimum Bank financial
management requirements, as stipulated in OP/BP 10.02. The project will maintain an adequate
FM arrangement acceptable to the Bank and, as part of the overall arrangements that the
borrower has in place for implementing the operation, provide reasonable assurance that the
proceeds of the credit will be used for the agreed-upon purposes. The overall FM risk of the
project before mitigating measures is assessed as substantial, but it would be reduced to moderate
after the proposed and existing mitigating measures described here are implemented and have
shown effective impact. A detailed assessment of FM arrangements under the project, capacities,
and issues relating to the execution of these arrangements, along with recommended actions, is
presented in Annex 7. The main actions required to address noted weaknesses are the following:
appoint chief accountants or at least one accountant at the level of CPO, PPMUs, and DPMUs;
update the FM Manual to reflect recent changes in FM and disbursement procedures by the Bank
and the government; train all FM personnel in CPO, PPMUs, DPMUs, and CDBs on updated FM
procedures; upgrade, install, and train relevant personnel on accounting software to fit the
operations and reporting requirements; issue MOF Circular on Project FM; and develop a TOR
for project internal audit and include the TOR in a circular of MOF/MPI.
65. To enhance compliance with project fiduciary arrangements, the project will institute an
internal audit (IA) function, which will be carried out by the MPI Inspectorate at the central level,
21
the Department of Finance at the provincial level, and the Finance and Planning Department at
the district and commune levels. The IA reports will be consolidated by each province and
submitted to Provincial People‘s Committee, MPI, MOF, and the World Bank within six months
of the year‘s end.
66. MPI and six project provinces have been assessed as having the capability to mobilize the
required counterpart funds. The government will establish seven Designated Accounts (DAs)
that will be maintained by the CPO and the six PPMUs. DAs will be maintained in U.S. dollars
at a commercial bank under terms and conditions acceptable to IDA. The traditional
disbursement method (applying statement of expenditures/summary sheet of expenses reporting
method) will be applied. Quarterly interim financial reports will be prepared by the CPO using
the Aligned Monitoring Tools under Decision 803 of MPI. Project Financial Statements will be
audited annually by independent auditors acceptable to the Bank in accordance with TORs
acceptable to the Bank. The cost of the audit will be funded by the project.
67. The government‘s request for an estimated US$1.5 million in retroactive financing under
the proposed credit was also considered acceptable based on OP 6.00. The funds would be used
to facilitate rapid project start-up by pre-financing the establishment of key implementation
structures and launching critical activities (e.g., recruitment and hiring of management unit staff,
preliminary staff sensitization and training, updating accounting software, training of fiduciary
staff, preparation of 18-month capacity building plan, and launching the baseline survey) prior to
credit effectiveness. The estimate also includes possible financing of early subproject and
investment activities at commune and district levels, given that the first 18 months of subprojects
have been identified. Only activities that are consistent with the project objectives and undertaken
in accordance with Bank guidelines and procedures would be eligible for retroactive financing.
68. Procurement. Procurement for the proposed project would be carried out in accordance
with the World Bank‘s ―Guidelines: Procurement under IBRD Loans and IDA Credits‖ dated
May 2004, revised October 2006, with its ―Guidelines: Selection and Employment of Consultants
by World Bank Borrowers‖ dated May 2004, revised October 2006, and with the provisions
stipulated in the Financing Agreement.
69. Implementation responsibility for project procurement under NMPRP-2 is highly
decentralized to numerous implementing agencies from central to commune levels. These
agencies include the CPO within the MPI, six PPMUs, 27 DPMUs, and some 230 CDBs. Details
of the agreed-upon procurement procedures, responsibilities, and Bank review requirements to be
applied under the project are presented in Annex 8.
70. The key findings of the procurement capacity assessment carried out for the project are as
follows:
Considerable knowledge and experiences with Bank procurement rules and procedures
exists within the CPO and project implementing agencies in the four provinces of Lao
Cai, Hoa Binh, and Yen Bai that had implemented the NMPRP-1, while personnel of the
two new provinces—Dien Bien and Lai Chau—are unfamiliar with Bank procurement
Most implementing agencies are not yet officially established and their procurement staff
are accordingly not designated pending for the GoV‘s approval of the project
22
Collusion was a serious issue under NMPRP-1, with dozens of such cases in the
procurement of small works detected.
71. Based on these findings, the procurement risk for the proposed project is rated ―high.‖
Key actions to mitigate identified risks include the following:
Recruitment of a qualified procurement specialist at central level
Documenting and disseminating project procurement procedures through the PIM
Intensive training of procurement and fiduciary staff and in particular for new provinces
Independent project procurement reviews.
72. Public disclosure of investments and subproject award, values, and expenditure data will
be standard at both commune and village levels to ensure greater local accountability. Additional
actions to mitigate the identified risks (including application of agreed-upon actions under the
GTAP) and to build and strengthen the implementing agencies‘ procurement capacity are
outlined in Annex 8. Those mitigation measures are expected to control the identified risks at
substantial or lower level.
D. Social
73. The proposed project triggers OP 4.12 on Involuntary Resettlement. However, no major
resettlement is anticipated, and only limited land acquisition will occur as the result of project
investments in upgrading small-scale infrastructure. A Resettlement Policy Framework has been
developed in line with relevant local laws, regulations, and World Bank policy to guide the
planning and implementation of mitigation measures in the case of land acquisition and
resettlement. Project provinces will prepare their respective annual resettlement plans based on
their annual work plans, which will be reviewed by IDA. Regular consultations with the target
population have been conducted and will continue through project implementation.
74. The project is designed to address the challenges faced by ethnic minority groups in
Vietnam who are the poorest segment of the population. Since the overwhelming majority of
project beneficiaries are ethnic minorities, the Bank‘s OP 4.10 on Indigenous People is triggered.
However, a stand-alone Ethnic Minority Development Plan (EMDP) is not required, as the entire
project is considered as an EMDP. Nonetheless, success of the project will largely depend on
minority groups‘ full access to project activities and their participation in identification, design,
implementation, management, and evaluation of activities. An ethnic minority review/strategy
has been developed to respond to these and other challenges (see Annex 11). The strategy
responds to the requirements of OP 4.10 and aims to ensure that ethnic minorities benefit from
the development projects and avoid or mitigate potentially adverse impacts.
75. Targeting. The project targets the poorest region in Vietnam (Northwestern Mountains)
and would cover the most remote and difficult-to-reach communes, where the majority of project
beneficiaries are ethnic minorities who are significantly poorer than other population groups.
Resources would be allocated based on the number of poor households in each commune. The
poverty rate for each selected commune would be greater than the average provincial poverty
rate, and the overall poverty rate of all selected project communes would be above 50 percent
(compared with a national average of 14 percent and a Northern Mountains regional average of
28.5 percent). All villages in selected communes would be eligible to benefit from project
23
support, and equal access to the most remote and generally more vulnerable villages will be
monitored. Each village will have two representatives (at least one female) in the Commune
Development Board to help ensure equal voice and access to allocated resources. Special
attention will be given to gender-responsive capacity building at commune and village levels to
improve the participation in subproject planning and implementation of both women and men.
76. Information delivery. Information dissemination is a key element of the overall ethnic
minority strategy and is integrated into project procedures. Language barriers and low literacy
levels make this a challenging task. Information and outreach activities will be carried out in
local languages, CFs will be hired from predominant ethnic groups in each commune (and skills
in other relevant languages a criteria in selection), and the PIM will be translated into local
languages while dissemination materials are developed to overcome literacy issues.
77. Consultations. Project preparation has been undertaken with wide consultations among
relevant stakeholders, including beneficiary groups, communes, project management structures,
and partners. Preparation included a large number of consultations with the ethnic minority
communities to better understand their needs and priorities. All communes and nearly all
villages under the project organized public meetings to discuss project activities and to prepare
village development plans to be supported by the project. By the end of September 2009, some
280 commune meetings and 2,168 village meetings had been organized to develop the first year
priority subproject list. Ethnic minority beneficiaries expressed satisfaction with the project‘s
proposed range of activities and in their intended role in subproject planning, implementation,
supervision, and M&E. A framework for participation was developed as part of the PIM to guide
the consultation activities and participatory planning in the project. The M&E system will
capture ethnic and gender disagregated data to assess actual levels of and satisfaction with actual
participation.
78. The government and the task team have been in regular contact and held discussions with
civil society organizations, NGOs, and other development partners during project preparation.
Continued contacts and dialogue are expected during project implementation, and the livelihood
subcomponents in particular intend on working closely with various partners (NGOs and private
sector institutions) in developing and implementing specific support activities.
79. Gender issues. Across all ethnic minority groups, women are worse off than their male
counterparts. The reasons for this vary across cultures but the results are the same: lower literacy
rates (in some cases, in single digits), very limited participation in Women‘s Unions and
Common Interest Groups, and a lack of representation in management of projects implemented
under NMPRP-1. In response, the project will enhance women‘s voices and actions in three
specific ways: promoting separate women‘s subproject prioritization, requiring at least one (of
two) village representatives on the CDB to be a woman (and requiring that the Deputy Chair of
the CDB be the head of the commune WU); and setting aside specific financing for women‘s
groups and activities under the commune development component.
80. Component 2.3 of the project will support the financing of specific activities for women,
which may include strengthening group structures, literacy and numeracy training, support for
livelihood improvement (including business development skills), and support for specific social
protection issues. A ―just-in-time‖ grant from the Gender Action Plan Trust Fund will support
24
efforts to understand more specifically how the project can help improve women‘s participation.
A parallel Japan Social Development Fund proposal to support NGO livelihoods initiatives with
women's groups has been submitted for approval and would facilitate further the women‘s
empowerment efforts under the proposed operation.
E. Environment
81. Overall the project is expected to have a low environmental impact since the investments
are mostly small-scale in both budget and scope and widely dispersed over the six provinces.
Hence, environmental category B has been assigned to this project. The main areas of potential
environmental concerns are: road rehabilitation or path improvements that may increase access to
protected forests/areas; potential water quality problems with wells and piped systems; potential
proliferation of disease vectors from irrigation water and borrow-pits; direct impacts from project
construction including dust, noise, erosion, drainage, worker safety, and social impacts of
laborers; and impacts on soil quality and risk of salinization. While the potential impacts are
expected to be minimal, and measures to address them straightforward, weak government
environmental training, management, and monitoring could limit efforts to address potential
negative impacts.
82. Therefore, to minimize the potential impact and to comply with GoV environmental law
and regulations and World Bank Safeguards Policy on Environment (OP/BP 4.01), an
Environmental Management Framework was prepared by the government. The EMF proposes a
two-stage environmental screening mechanism for all subprojects. Furthermore, the EMF also
provides standard mitigation measures (known as Environmental Code of Practice (ECOP)) to
minimize the potential environmental impacts during implementing the NMPRP-2. The ECOP
will be incorporated in the PIM, and relevant actions will be incorporated in subproject and
investment designs.
83. Intensive consultations with provincial authorities such as the Departments of Agriculture
and Rural Development, the Departments of Natural Resources and Environment, DPI, and
community representatives were conducted as part of the project identification and design
process. Furthermore, the English version of the EMF was disclosed at the Vietnam
Development Information Center in Hanoi and with Infoshop in Washington, DC, on October 27,
2009. The CPO and PPMUs have agreed that the Vietnamese version of the final draft of the
EMF shall be disclosed at publically accessible places at provincial and district levels prior to
appraisal. During implementation of the project, further consultations on environmental
safeguard issues will be carried out during identification of specific subproject activities.
Relevant mitigation actions to be taken in response to subproject designs and the ECOP will also
be disclosed at commune and village levels as soon as specific project sites are identified.
F. Safeguard policies
84. Among the Bank‘s safeguard policies, those regarding Environmental Assessment (OP
4.01), Indigenous Peoples (OP 4.10) and Involuntary Resettlement (OP 4.12) are triggered. The
project design incorporates the necessary mitigation measures for the adverse impacts associated
with the activities under Components 1 and 2, such as the environmental screening procedures
for investment and subprojects and the development of a participatory framework and a
25
communication strategy for the project to address ethnic minority groups‘ needs and to ensure
that disadvantaged ethnic minorities meaningfully participate in and benefit from all project
activities through improved communications, outreach, and monitoring of their participation.
85. The CPO possesses adequate capacity for implementing the project‘s Environmental
Management Framework. The safeguard staff will be responsible for implementing and
supervising the project‘s social and environmental safeguard procedures. At provincial and
district levels (PPMU and DPMU), the safeguard staff will also be assigned to take part in
environmental capacity building, monitoring, and management activities. Adequate budget will
be allocated for the implementation of environmental activities, mitigation measures, and
monitoring. The region has transferred responsibility for monitoring the application of World
Bank safeguard policies under the project to the sector, and clearance has been provided by the
Sector Manager.
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment (OP/BP 4.01) [x] [ ]
Natural Habitats (OP/BP 4.04) [ ] [x]
Pest Management (OP 4.09) [ ] [x]
Physical Cultural Resources (OP/BP 4.11) [ ] [x]
Involuntary Resettlement (OP/BP 4.12) [x] [ ]
Indigenous Peoples (OP/BP 4.10) [x] [ ]
Forests (OP/BP 4.36) [ ] [x]
Safety of Dams (OP/BP 4.37) [ ] [x]
Projects in Disputed Areas (OP/BP 7.60)* [ ] [x]
Projects on International Waterways (OP/BP 7.50) [ ] [x] * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties'
claims on the disputed areas
G. Policy Exceptions and Readiness
86. Policy exceptions. The project seeks no exceptions to standard Bank policies.
87. Readiness for implementation. The status of readiness for project implementation is as
follows:
Overall project management. Principal structures for overall project management at
central, provincial, and district levels exist within the structure of MPI. The specific
management units with relevant responsibilities were established through formal decrees
and are in place.
Implementation arrangements, which draw on procedures applied under NMPRP-1, have
been documented in a draft Project Implementation Manual, the finalization of which,
acceptable to IDA, is a condition of effectiveness.
Fiduciary arrangements documented in the PIM are based on previous project
arrangements; financial management arrangements in particular will also be reflected in a
Ministry of Finance circular, issuance of which is a condition of effectiveness.
An 18-month implementation plan and a procurement plan have been prepared by the
Requisite counterpart funds have been budgeted for 2010.
All relevant disclosure requirements for the Project Identification Document, the
Integrated Safeguards Data Sheet, the EMF, and the Resettlement Policy Framework have
been met.
Government has agreed to pre-finance the recruitment of additional project staff
(including Commune facilitators), the recruitment of a procurement consultant and an
international livelihoods consultant, the training of fiduciary staff, and the training of all
staff in the application of the PIM prior to expected project effectiveness in July 2010.
27
Annex 1: Country and Sector or Program Background
VIETNAM: Second Northern Mountains Poverty Reduction Project
Poverty in Vietnam
1. Vietnam has made remarkable achievements in economic growth over the last two
decades and is making steady progress toward middle-income country status. The broad-based
growth has been accompanied by an impressive record of poverty reduction. Poverty incidence at
the national level declined from 58 percent in 1993 to 16 percent in 2006. However, progress is
uneven. Poverty concentrates in rural areas, where one out of every five individuals is still poor.
It remains substantially higher among ethnic minorities (52 percent) than among the majority
groups (10 percent). Among the ethnic minority population, food insecurity and hunger are
widespread, with nearly 30 percent considered ―food poor.‖17
Poverty is also deeper among
ethnic minorities, with a poverty gap index of 15.4 percent compared with the national average of
3.8 percent. Among the poor rural areas of the country, the Northwestern Mountain Region has
the highest poverty incidence (49.0 percent, compared with the national average for rural areas of
20.5 percent).
Table 1.1: Poverty Trends
Poverty Indicator 1993 1998 2002 2004 2006 2008
Poverty Rate 58.1 37.4 28.9 19.5 16.0 14.0
Urban 25.1 9.2 6.6 3.6 3.9 3.1
Rural 66.4 45.5 35.6 25.0 20.4 18.1
Kinh and Hoa (Chinese) 53.9 31.1 23.1 13.5 10.3 8.5
Ethnic minorities 86.4 75.2 69.3 60.7 52.3 49.8
Food Poverty 24.9 15.0 10.9 7.4 6.7 6.1
Urban 7.9 2.5 1.9 0.8 1.2 0.6
Rural 29.1 18.6 13.6 9.7 8.7 8.3
Kinh and Hoa (Chinese) 20.8 10.6 6.5 3.5 3.2 2.6
Ethnic minorities 52.0 41.8 41.5 34.2 29.2 29.0
Poverty Gap 18.5 9.5 6.9 4.7 3.8 3.2
Urban 6.4 1.7 1.3 0.7 0.7 0.5
Rural 21.5 11.8 8.7 6.1 4.9 4.3
Kinh and Hoa (Chinese) 16.0 7.1 4.7 2.6 2.0 1.5
Ethnic minorities 34.7 24.2 22.8 19.2 15.4 14.2 Source: Based on GSO data.
2. Recent World Bank studies highlight that poverty among ethnic minorities is
multidimensional.18
Ethnic minorities are often found in remote areas where access to roads and
transportation is poor. Restricted physical mobility has been identified as a key factor in poverty.
Access to education, health care, credit, and other services is also constrained, although there
17
In Vietnam, the food poverty line is customarily set as the cost of a basket allowing a daily intake of 2,100
calories. 18
Vietnam Development Report 2008: Social Protection, December 2007 and Country Social Analysis: Ethnicity and
Development in Vietnam, World Bank, 2009.
28
have been significant improvements recently, mostly through targeted interventions. Income
increase through alternative livelihoods, however, remains a serious challenge. Although ethnic
minorities in uplands have on average larger agricultural landholdings than the majority groups,
their farmland is mostly of low quality (typically sloping land with no irrigation) and planted to
staple food and low-value crops. Limited attention is paid to upland agricultural research and
extension, reducing chances for poor minority farmers to switch to more-profitable farming
systems. Market opportunities are limited due to physical remoteness and underdeveloped market
information. In addition, people‘s livelihoods in the remote and upland region are highly
vulnerable to natural disasters and risks.
Table 1.2: Poverty Rate across Regions
Region 1993 1998 2002 2004 2006 2008
Northern Mountains 81.5 64.2 43.9 35.4 30.2 28.5
Northeast 38.4 29.4 25.0 24.3
Northwest 68.0 58.6 49.0 43.8
Red River Delta 62.7 29.3 22.4 12.1 8.8 7.5
North Central Coast 74.5 48.1 43.9 31.9 29.1 21.8
South Central Coast 47.2 34.5 25.2 19.0 12.6 13.4
Central Highlands 70.0 52.4 51.8 33.1 28.6 24.1
Southeast 37.0 12.2 10.6 5.4 5.8 3.3
Mekong Delta 47.1 36.9 23.4 15.9 10.3 11.7
Vietnam 58.1 37.4 28.9 19.5 16.0 14.0 Source: Based on GSO data.
3. Women tend to be more disadvantaged than men in terms of access to production
resources, extension services, health care, and education. Prevailing misconceptions and
stereotypes on ethnic minorities held by the majority group tend to contribute to their continued
low self-esteem. Some concerns are raised that minorities are not benefiting from the government
programs as much as the majority groups due to cultural factors, such as their poor understanding
of the policies, information dissemination methods that do not take into consideration their
language barriers, and the predominance of Kinh among government cadre.
Government policies
4. The government of Vietnam (GoV) is committed to further poverty reduction efforts. In
acknowledging that growth alone does not solve poverty in remote regions and among certain
socioeconomic groups, it has been implementing a number of pro-poor initiatives. These include,
most importantly, recently introduced budget allocations norms that favor poorer provinces
(‗equalization mechanism‘) and various national targeted programs (NTPs). Introduction of the
pro-poor fiscal transfer was accompanied by provincial governments‘ increased decision-making
powers over investment plans.19
Deepening decentralization is seen as an opportunity for more-
effective use of public resources to address poverty and underdevelopment. At the same time, it
also highlights the needs to further develop planning capacity, especially at the lower levels of
administration (districts and communes).
19
Under 2002 Budget Law, which came into effect in 2004.
29
5. Among various NTPs, the Program for Socio-economic Development in Communes
Facing Extreme Hardship in Ethnic Minority and Mountainous Areas (commonly known as
Program 135) and the National Target Program for Poverty Reduction (NTPPR) have been most
prominent in terms of coverage and budget. While NTPPR under the Ministry of Labor, Invalids
and Social Affairs (MOLISA) primarily focuses on provision of social and financial services to
poor households, including subsidized credit, Program 135—coordinated by the Committee for
Ethnic Minorities (CEM)—uses geographical targeting and provides additional resources to
remote communes and villages. The bulk of Program 135 resources finances commune- and
village-level infrastructure works. Program 135 is currently in its second phase (P135-2). P135-2
incorporated several design improvements on the basis of lessons learned from the first phase,
including better targeting, strengthened capacity building, and the introduction of production and
livelihoods support. Implementation of the latter, however, faces several challenges. What is
becoming clear is that livelihood support under P135-2 mostly focuses on provision of subsidized
inputs, such as improved seeds and fertilizer, rather than livelihoods diversification and
promotion of market linkages. This experience from P135-2 suggests that there is a significant
room for improvement in the service delivery related to livelihood support for the poor, which
would require much flexibility and more-intensive support tailored to specific local constraints
and opportunities.
6. As the P135-2 closes at the end of 2010, CEM is developing of a new follow-on program.
Coverage, program structure, and operational modalities remain to be worked out. MOLISA has
recently launched the program to support poverty reduction in 61 poorest districts (D61
Program). This will reportedly allocate relatively large resources to the districts over the next
decade. The Ministry of Agriculture and Rural Development is also developing a new national
targeted program for rural development.
7. Proliferation of NTPs on the one hand means more resources to poor communes and
households. On the other hand, it poses challenges on harmonizing approaches, coordinating
specific activities and interventions, and avoiding duplication and waste of resources, many of
which are earmarked to specific activities and inputs, in support of a coherent and effective
poverty reduction strategy. This is a particular concern in poor upland communes of the Northern
Mountains region where planning capacity is limited and where communications are constrained
by remoteness, language barriers, and other factors. This would necessitate further capacity
building support at the commune level specifically addressing integrated planning processes.
Socio-Economic Development Plan process
8. The Five Year Socio-Economic Development Plan plays a critical role in setting the
overall framework and direction for development and investments in Vietnam, with several
targets. The planning process has also seen significant changes. The former top-down approach to
planning has changed fundamentally in the last decade or so. The central authorities, the Ministry
of Planning and Investment (MPI) and the Ministry of Finance, now only provide the general
development orientation and the budget constraints (first step), and planning agents (provinces,
line ministries) prepare their detailed plans and submit to MPI (second step). In that sense, the
planning process is much less top-down than in the past. Also, the targets in the plans are no
longer binding, just indicative.
30
9. The planning process in provinces is indeed somewhat participatory, although the vision
of full participation may not be reaching its potential. With the Ordinance on Grassroots
Democracy in place, local consultations appear to take place more. Also, with improved access to
information, especially in better-off areas, local people have more say in local and regional
planning. However, participation in planning process varies greatly across regions and places.
The form of participation is also limited to voting by hand on predetermined lists of activities. In
many instances, local authorities often think that ordinary people have little knowledge to
contribute to planning and that the genuine consultations cost time and money.
10. The project could add value in contributing to capacity building and supporting for annual
development planning down at the village level to commune and district levels. The project will
facilitate meaningful participatory planning process with best practices drawn from international
experience.
31
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
VIETNAM: Second Northern Mountains Poverty Reduction Project
World Bank
Project Sector Issue Status Remarks
DPL for P135-2 Targeted support to poor
communes
Ongoing Parallel-financed by a
number of other agencies
Third Rural Transport Infrastructure Ongoing
Second Rural Energy Infrastructure Ongoing
Third Rural Finance Micro-finance Ongoing
Agricultural
Competitiveness
Livelihood Ongoing
NMPRP-1 Targeted support to poor
communes
Closed
(2007)
Rated: Satisfactory
CBRIP Targeted support to poor
communes
Closed
Other Development Agencies
Project Agency Sector Issue Status Remarks
Rural infrastructure in Lao Cai AFD Infrastructure Ongoing
Quality enhancement and
agricultural products safeness
and Biogas development
ADB Livelihood Ongoing Yen Bai and
Son La
Emergency Rehabilitation of
Calamity Damage Project
ADB Infrastructure Ongoing Yen Bai
Agricultural Sectoral Support
Program (ASPS)
DANIDA Livelihood Ongoing Dien Bien,
Lao Cai, Lai
Chau
Northern Mountains Sustainable
Infrastructure Development
Project
ADB Infrastructure Preparation 15 provinces
in the North of
Vietnam
Rural Income Diversification
Project
IFAD Rural
Development
On-going (Tuyen Quang
province)
Decentralized Program for
Poverty Reduction
IFAD Rural
Development
On-going (Ha Giang
province)
Developing Business with the
Rural Poor
IFAD Rural
Development
On-going (Cao Bang
province)
Pro-poor Partnerships for
Agroforestry Development
IFAD Rural
Development
On-going (Bac Kan
province)
32
Annex 3: Results Framework and Monitoring
VIETNAM: Second Northern Mountains Poverty Reduction Project
Results framework
1. In order to monitor and evaluate the progress and impacts of the NMPRP-2, two sets of
indicators will be measured. The first set includes output indicators, which will be measured by
the NMPRP-2 baseline survey (BLS) and updated annually using the internal reporting system of
the NMPRP-2. The second set consists of outcome indicators, which will be measured at the mid-
term review (MTR) and end of project (EOP) surveys (see table on Arrangements for Result
Monitoring). The following Results Framework describes the project development objective
(PDO) and this second set of indicators.
PDO Project Outcome Indicators Use of Project Outcome
Information Enhance the living
standards of the project
beneficiaries20
by
improvements of access to
productive infrastructures,
productive and
institutional capacity for
local government and
community, and market
linkages and business
innovation
At least 60 percent of the project
beneficiaries report satisfaction on
the selection, design, and
implementation of project activities.
The project beneficiaries report an
improvement of on- and off- farm
income of at least 10 percent.21
At MTR, the overall strategy will
be reviewed against the PDO
indicators and baseline.
Interventions and funds will be
realigned according to the
findings regarding project
performance.
Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate Outcome
Monitoring Improvement of access to
productive infrastructure
At least 60 percent of households in
the project areas report improvement
in accessibility to basic
infrastructure.22
Improvement in agricultural output
of at least 10 percent.23
Underachievement in the
indicators, if any, would be
analyzed for improving
infrastructure investment for
districts and livelihood planning.
Improvement of
productive and
institutional capacity for
local government and
At least 60 percent of villagers
report satisfaction with public
services delivery.
At least 60 percent of women and
Underachievement in the
indicators, if any, would be
analyzed for improving capacity
building strategy and training
20
The total population of the targeted project communes is approximately 670,000. The total estimated number of
project beneficiaries will be a subset of this number; given the demand-driven nature of the project, however, the
number of project beneficiaries is not yet known. The project MIS will regularly track beneficiary numbers, which
will be reported on regularly. 21
The 10 percent change reflects a 10 percent growth in addition to the underlying growth rate as measured in
comparison districts that are not program participants. 22
―Basic infrastructures‖ refers to road, irrigation, water supply, market. 23
―Agricultural output‖ means output from agriculture, livestock, aquaculture, and forest-related activities. The 10
percent change reflects a 10 percent growth in addition to the underlying growth rate as measured in comparison
districts that are not program participants.
33
PDO Project Outcome Indicators Use of Project Outcome
Information communities ethnic minorities satisfied with
public representation and service
delivery
At least 60 percent of communes
integrate the NMPRP-2 into their
Socio-Economic Development Plans
(SEDPs)
At least 60 percent of villages and
communes have natural disaster
mitigation plan and implement
readiness exercises24
on an annual
basis.
plans.
It is expected that the capacity
enhanced by the NMPRP-2 will
also benefit the implementation
of the other development projects
at the local level.
Improvement of market
linkages and business
innovations
Number of households involved in
non-farm income generating activity
increases at least 30 percent.
30 percent of households report
improved opportunities and public
support to start or improve
businesses
Underachievement in the
indicators, if any, would be
analyzed for promoting market
linkages and business
innovations.
Notes:
a) The overall development objective of the NMPRP-2 is to enhance the living standards of the project
beneficiaries. ―Living standards‖ are arguably best measured using household consumption expenditures.
However, the nature of the community-driven development (CDD) project implies a significant time lag before
perceivable improvements in consumption expenditures are observed. Therefore, income is selected over
expenditure in the second PDO to mitigate this issue.
b) These are the PDO and major intermediate outcome indicators. For a full list of outcome indicators to be
assessed when evaluating impacts of the NMPRP-2, see the monitoring and evaluation (M&E) design report.
c) The selection of these indicators was made in reference to the World Bank‘s current core indicators in the social
development theme.
2. The targets for improved income and agricultural output in this Results Framework were
determined based on trends seen in the Vietnam Household Living Standards Survey (VHLSS).
For example, agricultural input over the past five years has increased about 20 percent, so the
target of a 10 percent increase due to the effects of the project would represent an expectation of
about 30 percent total growth. However, the VHLSS is not representative at the provincial level,
and the most recent data available are from 2008. Therefore, we plan to revisit these targets after
the baseline data are collected (expected by October 2010) and make adjustments if appropriate.
Arrangements for results monitoring
Institutional issues
3. The NPRPR-2‘s management information system (MIS) will build on the experience of
the MIS established in the NPRPR-1, in which a complicated computerized MIS connecting the
Central Project Coordination Office (CPO) to Provincial Project Management Units (PPMUs)
24
―Readiness exercise‖ is the execution (or ―demonstration‖) of the natural disaster mitigation plans available at
villages and communes.
34
and District Project Management Units (DPMUs) was developed on the Microsoft Access
platform. The system was comprehensive in data requirements and professionally designed.
Though it was generally effective, this MIS was assessed to be too ambitious at the outset,
especially in terms of DPMU capacity to maintain and use the system and the large range and
volume of data required.
4. The MIS system will also draw upon the Aligned Monitoring Tool (AMT) database for
official development assistance (ODA) projects of the Ministry of Planning and Investment
(MPI), which was established by the Decision No. 803/2007/QD-BKH dated 30 July 2007
―Issuance of reporting system for ODA-funded projects, programs.‖ However, this AMT is a
very complex reporting system consisting of 21 separate forms. Our investigation reveals that the
AMT forms go far beyond the volume and types of information needed for the MIS of this
NMPRP-2. In addition, it will be very demanding to require communes to complete these 21
reporting forms every month as required by the current AMT. Therefore, we proposed to simplify
these AMT reporting forms to collect information required for the M&E system of the NMPRP-
2. MPI agreed to this proposal, and further discussions will be held to find appropriate technical
solutions.
5. Given these considerations, the MIS system of the NMPRP-2 will be considerably
simplified from that of the first project and the AMT. This will be developed on the Microsoft
Excel platform with simplified data report templates for communes to report to the DPMUs,
automated templates for DPMUs to compile the data from the communes, and automated
templates for PPMUs to combine reports sent from the districts. The data will be processed and
kept fully up and running by dedicated technical staff at the CPO.
6. The MIS system consists of two types of data:
Surveyed data tracks information mainly on outcomes and intermediate outcomes. This
information will be generated from different sources, including the internal reporting
system, independently conducted surveys (baseline, EOP), and participatory data
collection through the tool of citizen report card (CRC) and Light Survey (see below).
System-generated data tracks information on inputs and outputs of the project activities at
the commune level. The data will then be processed and aggregated to the district,
provincial, and central level. The initial values of the output indicators will be established
by a baseline survey. These values will be then updated using the project‘s internal
reporting system. DPMUs will collect this data using the standardized formats in the
Microsoft Excel environment (see Project Implementation Manual (PIM) for details of the
data report templates). This data will be then sent to the CPO for central data processing.
7. The results indicators shown in the table on the following page will be used to track
progress on the expected intermediate, component level, outcomes. These indicators will be
included in the project MIS and will be updated annually and reported on as a part of the result
framework.
35
Intermediate Outcomes Output Indicators
Improvement of access to
productive infrastructure Annual investment and subproject completion rate
Areas of newly irrigated lands
Percent of communes with operation and
maintenance teams and plans
Improvement of productive
and institutional capacity for
local government and
communities
Number of training courses organized for
commune/village staff and for communities; number
of people attend these training courses
Number of common interest groups (CIGs)
established and number of female participation in
these CIGs
Number of trained youth Improvement of market
linkages and business
innovations
Number of business proposals received by the
Commune Development Boards (CDBs), DPMUs to
support innovative business ideas/plan
Number of business partnerships established
8. A project Web page of the NMPRP-2 will be developed separately from the current MPI
website, to be maintained by the CPO. All information related to the project will be made
available through a functioning project Web site accessible to all key stakeholders. All project
staff will be trained on how to use the system for their M&E activities. It is also proposed that an
anti-corruption hotline at the CPO will be available 24/7 for any reports from the targeted areas
of the project. Guidance on using the MIS will also be included in the PIM.
Data collection
9. The M&E data will be collected through several different mechanisms including: a
baseline survey (BLS), and end-of-project survey, regular input/output data through the project
management information system, citizen report cards, discrete ―light‖ surveys to measure specific
key indicators to support the mid-term review, and qualitative methods including ―most
significant change‖ model and photo stories.
10. Baseline data survey. Before the expected starting date of the project, baseline indicators
will be collected through the BLS. The BLS is a tool to collect data on performance indicators at
the outset of the project, especially the information related to the project outcomes. In addition to
providing the baseline data on the project areas, the BLS also collects information on the
―control‖ group of communes. These are not targeted by the NMPRP-2 and will be selected in a
way to ensure that they are as similar as possible to the targeted (or treated) communes. This data
collection will be part of the impact evaluation framework of this project. Comparing the
outcomes between the treatment and control groups across time reveals the impact of the project.
The BLS will be commissioned for qualified independent parties.
11. Sampling procedure for the BLS is chosen to reflect the participating district and
commune selection process of the NMPRP-2, which follows two stages. The first stage involves
selecting districts, and then communes from the selected districts are chosen. The selection was
pursued on the following criteria:
36
Being the NMPRP-1 districts (for Hoa Binh, Son La, Lao Cai, and Yen Bai). For the
former NMPRP-1 provinces, between four to five NMPRP-1 districts were selected for
the NMPRP-2.
Communes are then chosen from the selected districts using poverty rate of more than 40
percent and other criteria, including distance to the district centre and number of villages.
The selection also took into account:
Provincial Socio-Economic Development Plans. Districts and communes were chosen in
line with the Provincial Five Years Socio-Economic Development Plans for the 2006-
2010 period.
Other existing resources available for poverty reduction in the potential project areas (e.g.
other poverty reduction programs, hydropower plants in some provinces).
12. Based on our current understanding of the selection process, the most appropriate method
for impact evaluation is therefore the difference in difference method. At this stage, a sample size
of 120 communes is proposed for the BLS. Of this sample, 60 communes are selected from the
targeted communes to form the treatment group. The remaining 60 communes will be selected
from the other communes that are not selected into the NMPRP-2 but are as similar to the
NMPRP-2 communes as possible. The selection of communes for both control and treatment
groups will be based on the poverty rate and other criteria mentioned above. A score matching
method will be used to select matching communes between control and treatment communes, and
then 60 pairs of matching communes will be randomly selected. In each selected commune, three
villages will be randomly selected and then eight households in each selected village will also be
randomly selected. Of these eight households, five will be officially selected for interview and
the other three are reserved for replacement. This process will result in a sample of about 1,800
households for the BLS.
13. The end-of-project survey will repeat the BLS. The survey will be implemented on both
the targeted communes and the control communes selected for the BLS. The BLS and EOP
surveys are essential instruments for impact evaluation. These surveys will be implemented by
qualified independent parties. It should be noted that a MTR survey is not proposed for this
project. We believe that given the design of the NMPRP-2, a MTR survey will not add much
value to either monitoring or impact evaluation. Sound BLS and EOP should be sufficient for
impact evaluation. And thus the resources should be allocated to the BLS and EOP surveys. The MTR will consist of several smaller assessments of satisfaction and other qualitative studies aimed at assessing the pace and quality of project implementation.
14. Periodically updated data. Data on inputs and outputs of the project will be updated
quarterly through the internal reporting/management information system, as described in
paragraphs 5, 6 and 7 above.
15. Citizen Report Cards (CRC). CRC is a participatory data collection mechanism which
is proposed for use under the NMPRP-2 given the importance of community participation in both
project identification and management. While participatory M&E (PM&E) methods such as
CRC have a number of advantages over the conventional M&E, developing a fully fledged
PM&E may not be practical, given the widely recognized weaknesses of district and commune
37
staff who would be required to facilitate such a process. PM&E involves a change in mindset
throughout the M&E system if it is to be effectively adhered to, and this takes both time and
resources. Therefore, a CRC is proposed as a tool to add ―participatory content‖ to the M&E
approach developed for the NMPRP-2. This will involve a template at the village level to collect
mainly qualitative information on the satisfaction level of villagers on selection, implementation,
O&M, and impact of the project activities as well as the areas that need further support. This
information will be collected and verified through village-level participatory meetings. The CRC
tool will be incorporated into the MTR and EOP for a selected number of 24 communes (around
10 percent of the targeted areas).
16. Light survey. In addition to the CRC tool, a Light Survey is proposed to collect the key
indicators in order to measure the changes compared with the baseline. The CRC and this survey
are proposed for after the first half of the Project. In this regard, the data collected will serve as
tools for mid-term review.
17. Qualitative assessment tools. The NMPRP-2 will also make use of the Most Significant
Change model. This is a dialogue and story-based technique to find out the most significant
changes in the project areas from some designated groups of beneficiaries. There will be at least
one designated group of beneficiaries per district in the targeted areas. The significant changes
reported will facilitate program improvement by focusing the direction of work to explicitly
valued activities and away from less valued directions. Photo story is another approach that is
proposed to enhance the impact evaluation process. Each commune will be equipped with digital
camera and instructed to use this camera to take photos of the project sites at different stages of
the intervention.
18. As noted, all information related to the project will be made available through a
functioning project Web page accessible to all key stakeholders. The MIS will regularly transmit
information on progress, process, and results to the PPMUs, DPMUs, and particularly to CDBs
and Commune Supervision Boards, to enable continuous or periodic assessment, reflection, and
refinement of the project activities. This is to ensure adequate feedback of information from
M&E studies and MIS data to lower management levels and to project beneficiaries.
19. Results and lessons from supervision missions and M&E will also be shared and
disseminated through a series of thematic forums/platforms to be organized with MPI and other
stakeholders (the Ministry of Agriculture and Rural Development; the Ministry of Labor, Invalids
and Social Affairs; the Committee for Ethnic Minorities, etc.) to influence policy dialogue and
policy-making processes.
Capacity issues
20. The results monitoring requires both internal and external M&E activities. As most of
external M&E activities will be conducted independently by qualified technical assistance
parties, capacity building is an issue for internal M&E activities.
21. The NMPRP-2 has a large target area of 2,366 villages in 230 communes of six
provinces. Coordinating the result monitoring represents a considerable challenge. In addition,
the local capacity at the target areas, especially at the commune and district levels, is generally
38
low. Therefore, one key activity of the M&E system proposed for this project is to provide M&E
support services. The focus of these support services is to prepare guidelines and provide training
to assist PPMUs to more fully analyze and utilize MIS data in project progress reports, to train
project staff at all level on the use the MIS, and to pilot and demonstrate new methods for M&E,
such as participatory assessment methods and data analysis. It would be more effective to plan a
draw-down contract basis for consistent and regular technical assistance over the life of the
project for this M&E support services. It is estimated that the cost this draw-down contract,
together with other M&E activities, will account for nearly 1 percent of the total project budget.
22. Particularly, given the MIS proposed for this NMPRP-2, the information technology
capacity of the CPO needs to be enhanced. In addition to M&E coordinator, there would be
dedicated information technology staff to ensure that the MIS is fully updated and operated as
well as to provide support for PPMUs and DPMUs in data collection and processing. Training on
the uses of the MIS system will cover both technical aspects and how to use the system for
continuous or periodic monitoring, assessment, reflection, and refinement of project activities. It
is expected that the training activities for capacity building in this project will have positive
spillover effect on the capacity of the other ongoing development projects at the local level.
39
Arrangements for Results Monitoring
Target Values Data Collection and Reporting
Project Outcome Indicators Baseline YR1 YR2 YR3 YR4 YR5 Frequency and
Reports
Data Collection
Instruments
Responsibility
for Data
Collection
At least 60% of the project
beneficiaries report satisfaction on
the selection, design, and
implementation of project activities.
0 10% 60% Impact
assessment at EOP
BLS, EOP surveys;
CRC
Internal and
external agency
Project beneficiaries report an
improvement of on- and off- farm
income at least by 10%
0 5% 10% Impact
assessment at EOP
BLS, EOP surveys;
CRC
Internal and
external agency
Intermediate Outcome Indicators
Improvement of access to productive
infrastructure
At least 60% of households in the
project areas report improvement in
accessibility to basic infrastructure
0 10% 60% Impact
assessment at EOP
BLS, EOP surveys;
CRC, LS
Internal and
external agency
Improvement in agricultural output
at least by 10%
NA 5% 10% Impact
assessment at EOP
BLS, EOP surveys;
CRC, LS
Internal and
external agency
Improvement of productive and
institutional capacity for local government
and communities
At least 60% of villagers report
satisfaction with public services
delivery.
NA 30% 60% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
At least 60% of women and ethnic
minorities satisfied with public
representation and service delivery
NA 30% 60% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
At least 60% of communes
integrate the NMPRP-2 into their
SEDPs
NA 30% 60% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
At least 60% of villages and
communes have natural disaster
NA 30% 60% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
40
mitigation plan and implement
readiness exercises25
on annual
basis.
Improvement of market linkages and
business innovations
Number of households involved in
non-farm income generating
activity increases at least 30%.
NA 20% 30% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
30% of households report improved
opportunities and public support to
start or improve businesses
NA 20% 30% Impact
assessment at EOP BLS, EOP surveys;
CRC, LS
Internal and
external agency
Notes: As the BLS has not been conducted, some initial values, denoted by ‗NA‘, are thus not available
25
―Readiness exercise‖ is the execution (or ―demonstration‖) of the natural disaster mitigation plans available at villages and communes.
41
Annex 4: Detailed Project Description
VIETNAM: Second Northern Mountains Poverty Reduction Project
Scale and targeting
1. The project targets the poorest region in Vietnam (Northwestern Mountains) and would
cover the most remote and difficult-to-reach communes, where the majority of project
beneficiaries are ethnic minority groups (approximately 94 to 100 percent of total population)
who are significantly poorer than other population groups. The proposed project would work in
2,366 villages and 230 communes in 27 districts of the six provinces of Lao Cai, Yen Bai, Son
La, Hoa Binh, Dien Bien, and Lai Chau. The first four participated in the first Northern
Mountains Poverty Reduction Project (NMPRP). All villages within selected communes will be
eligible to benefit from the project‘s support and investments.
Project approach
2. The project will build on the success and experience from the first NMPRP to further
promote and strengthen the community-driven development (CDD)-type operation and to
support further decentralization processes to local government. The project‘s activities are
designed to be organized in four components. The nature of investments is through public
investments (in key basic productive infrastructure) and private assets (in livelihoods and market
linkage supports through common-interest group formation and development).
3. Public investments are notably concentrated in subcomponent 1.1 (economic
development investments) and subcomponent 2.1 (village infrastructure improvements). The
rationale of designing public investments in two separate subcomponents is that public
infrastructure of subcomponent 1.1 is of a larger scale and more technically complicated, which
required districts to be investment owners, while investments under subcomponent 2.1 are of
smaller scale (subprojects of value ranging up to US$6,000 only), which focus on investment
needs at that village or hamlet level that bigger subprojects usually fail to reach or cover
adequately. And these small investments (subproject) are managed by communes as investment
owners. Therefore, the mechanism and procedures for investments under subcomponent 1.2 and
subprojects under subcomponent 2.1 are different. Investment ownership at commune level
marks an important step in the decentralization process and lies at the heart of the CDD nature of
this project.
Pilot livelihood support
4. The project‘s support to the poor's private investments (―livelihood support‖) first will be
piloted before being scaled up. The overall approach to livelihood support and proposed
activities and implementation arrangements of the relevant subcomponents are presented in
Attachment 4.2 (Livelihood Approach Paper). Building upon the successes of current initiatives
in Vietnam and elsewhere, the project would apply a two-track approach to developing
livelihood opportunities and building market linkages: a ―resource-based approach‖ and a
―market-led approach.‖ Both of these would seek to bring the producers and buyers closer. The
resource-based approach (demand-driven, components 2.2 and 2.3) emanates from the logic of
organizing project activities around dominant pro-poor livelihoods in local areas and creating
42
opportunities for the poor to move up the value chain. The market-led strategies (components 1.2
and 3.4) induce aggregation around select subsectors/products having high growth potential with
comparative advantage for poor producers. New products and innovating business linkage
models with rural producers will be encouraged in addition to supporting employment-linked
skills training for youth in an attempt to diversify livelihood sources. These mutually reinforcing
approaches will bring synergies in resource and business linkages and allow flexibility in
targeting livelihood strategies in different geographical locations, taking into account local
situations.
5. A detailed implementation plan for the subcomponents is required within six months of
effectiveness. Around mid-term review, an assessment will be made on whether the government
has been successful in putting in place operational arrangements that allow enhanced market
participation of project clients and increased private sector engagement in the last mile. Given
that the outcomes will take some years to show (most likely year three or four), objective
verifiable outputs are proposed to use to help seeing if the livelihood component is moving. Such
indicators could include, for example, the following: two productive partnerships established and
five innovations26
identified, provided with grants and showcased for subcomponent 1.2; 200
common interest groups (CIGs) formed, 80 business plans taken up for support, and 100
community-level extension workers in place for subcomponent 2.2; 200 women‘s groups
supported and with group action plans approved and 50 women‘s groups linked to Vietnam Bank
for Social Policy credit schemes for subcomponent 2.3; and 200 young people trained in skills
for subcomponent 3.4.
Project description
Component 1 - District Economic Development
6. This component aims to provide investment support to the District Socio-Economic
Development Plans (SEDPs), focusing on productive and economic infrastructure for local
employment and income generation. In addition, the component will facilitate and promote
diversification of the livelihoods of the rural poor through piloting better market linkages and
business innovation. This component will have two subcomponents.
7. Subcomponent 1.1: Economic development investments. The project will finance small
and medium-sized productive and economic infrastructure investments that are in harmony with
the new District SEDPs for the period of 2011–15. The infrastructure schemes supported under
this subcomponent will directly benefit the project communes, but in view of larger scales of
required investments, districts will be the investment owners. Priority will be given to those
types of infrastructure that will provide local employment either directly through construction
and operations and/or through creating an enabling environment for the development of local
businesses. These would include intra-commune roads, small-scale irrigation schemes, terracing,
drinking water supplies, and rural markets. A list of ineligible investments (a ―negative list,‖ see
Attachment 4.1 for a draft list) will be developed to serve as the basis for selection. It is
26
A livelihood activity is considered to be innovative if it involves the creation of a new product, it brings to the
market a product that has never been sold before or brings a product to a new market, it involves a new production
technology (or technique), it involves a new method of marketing or distribution, or it creates a partnership among
groups/entities that have not partnered before.
43
imperative that project-supported schemes have sound disaster risk mitigation measures
incorporated in the design.
8. Initial identification of the investments will start at the commune level as part of the
overall commune participatory planning process that takes place at the onset of the project
implementation. The process will be facilitated by a Commune Facilitator (CF). The Commune
Development Board (CDB) will submit to the District Project Management Unit (DPMU) a list
of priority subproject proposals that are included in the plan but that are beyond the scope of the
Commune Development Budget Component (CDBC) (see Component 2 below). The DPMU
will consolidate proposals from all the communes and select priority investments in light of the
respective District SEDP. Upon approval from the District People‘s Committee, the DPMU will
submit the proposals to Provincial Project Management Unit (PPMU) for endorsement. The
DPMU will work with the Department of Planning and Investment and other relevant provincial
agencies for inclusion of commune proposals into the annual work plan. This will be then
followed by a public announcement to the relevant communes. The DPMU will take charge of
detail designing (including operation and maintenance (O&M) arrangements) and
implementation. Completed schemes will be handed over to respective communes, which will
have O&M responsibilities. The project will provide O&M funds to the communes in order to
ensure the sustainability of the investments.
9. Subcomponent 1.2: Diversification of opportunities for market linkages and business
innovation support (5 percent of total project cost). This subcomponent would support specific
efforts to make supply side and market institutions work for the poor. The assistance from this
subcomponent will be used for research and analytical studies to identify market opportunities,
new products/services, and measures for creating enabling environment, for partnerships with
banks, NGOs, and the private sector to provide dedicated linkage support to rural producers and
microenterprises, and for a business innovation fund to provide grants on a competitive basis to
promote innovative business ideas and unconventional approaches for business linkages for the
rural poor:
Research and analytical studies: At the outset, situational assessments will be undertaken
by qualified institutions/consulting firms for each of the project provinces. These studies
will help the project scan market opportunities, identify pro-poor value chains, review
access to finance and livelihood initiatives in the province and identify best practices,
map key service providers, and scope out potential partners from among banks, NGOs,
and public and private sector enterprises. Where current literature is unavailable and
knowledge is undeveloped, the project will commission subsector/value chain studies to
identify critical gaps and formulate feasible intervention strategies for enhancing market
participation of the poor.
Productive partnerships: The project will develop productive partnerships with the public
sector, private firms, cooperative enterprises, and/or NGOs to support business linkage
initiatives in two or three strategic subsectors/products. Each partnership is expected to
provide bundled service provision in two or more of the following segments: improved
access to credit; productivity and quality enhancement support; technical support and
technology extension; logistics infrastructure and information services; packaging,
labeling, and branding; and marketing support, including formal buyback arrangements.
Contracted production, outgrower schemes, and contracted service provisioning typically
fall within this realm.
44
Innovation grants: The project will organize annual provincial level ―innovation fairs‖ to
identify, celebrate, and encourage business innovations. Grant support will be extended
on competitive basis to innovative business ideas/models that include, but are not limited
to, the following: aggregation of small producers into activity/trade clusters; private
provisioning of livelihood support and business linkage services; technology, product, or
service innovations; quality enhancement and cost competitiveness of small producers;
fair trade initiatives; and enterprise models for market-linked skill enhancement.
Component 2 - Commune Development Budget Component
10. This component will extend the success of the CDBC under NMPRP-1. Increased
funding to this component will maintain the momentum to build the capacity of the communes
and local communities to directly manage small-scale investments (communes as investment
owners) and activities for local area development. Greater emphasis on livelihood-related
activities and better targeting of women‘s needs will be prioritized initially as a pilot. Subproject
selection will be made through a participatory planning process conducted by the CDB with
facilitation from CFs. The planning exercise will be carried out annually, and the CDB will
submit a list of selected subproject proposals to the DPMU each year for its appraisal and
subsequent approval by the District People‘s Committee. This component will have three
subcomponents.
11. Subcomponent 2.1: Village infrastructure improvements. This subcomponent will finance
new construction and upgrading of village infrastructure (such as village pathways and inter-
village roads, minor bridges, improvements to small-scale irrigation and water supply systems
etc.). A list of ineligible subprojects (a ―negative list‖) will be provided to guide the commune‘s
selection. A funding ceiling of around USD6,000 per scheme will be maintained to distinguish
the scale of infrastructure investments under this component from those under subcomponent
1.1.
12. Subcomponent 2.2: Livelihood support and production services. This subcomponent will
facilitate improvements in livelihoods of the project beneficiaries by making investments in
economic organizations of the poor and enhancing their access to assets, credit, skills,
technology, and markets. The support will be provided for the following: organizing CIGs
around specific livelihood activities; arranging technical assistance and support services like
business orientation and skills training, product/design development, bulk procurement of raw
materials, extension services, etc.; facilitating access to finance and risk management services;
provision of small-scale value chain infrastructure for value addition, storage, quality control,
and packaging; and market linkages. Group formation will be encouraged around pro-poor
livelihood activities suitable to local conditions and market potential.
13. Subcomponent 2.3: Support for women‘s social and economic development activities.
This subcomponent will support activities that are specifically selected by groups of village
women for the enhancement of their economic and social status. The project will help commune-
level Women‘s Unions (WU) to expand their activity profile to provide a range of financial
services, effectively complemented by a battery of public and social services for vulnerability
reduction and risk management.
45
14. The project will strengthen savings and credit activities. It will organize basic orientation,
business planning, and technical skills development for enterprise promotion among women. It is
proposed that Commune Professionals (CPs) will be engaged to support poor households in
financial literacy and planning the livelihood investments of member households. The WU will
also be linked to the commercial banks to enhance the resources that allow them to finance
livelihood needs of women. The WU will be encouraged to anchor information, education, and
communications campaigns in commune/village levels on social issues, such as drug addition,
children‘s education, child labor, and HIV/AIDS. The project will facilitate their linkage with
government institutions for efficient delivery of social protection and public services. Local-level
initiatives like grain banks, community health services, etc. will address food shortages, health,
nutrition, and education needs. This will be complemented by investment in social accountability
mechanisms that enable the WU to demand and access better-quality public services and
entitlements.
15. The project will facilitate formulation of women‘s action plans by WUs and women‘s
groups by aggregating socioeconomic needs prioritized by their members. It would provide
subgrants for women action plans that could include a wide range of activities, including
emergency support for food and health purchases by extremely poor and vulnerable poor, asset
accumulation, retiring high cost debts, community enterprise initiatives like grain banks,
medicine depots, etc.
Component 3 - Capacity Building
16. This component includes various capacity-building efforts to develop the human recourse
basis of the project stakeholders during implementation and beyond. It aims to augment the
capacities of the district- and commune-level project stakeholders and beneficiaries to make
them fully equipped to participate in the project and to undertake related tasks. In addition,
specific capacity-building supports will be provided to complement and/or enhance the quality of
some Component 1 and 2 activities. It has five subcomponents.
17. Subcomponent 3.1: Socio-economic development planning. This aims at building the
capacities of districts and communes to conduct the development planning process in a holistic
and integrated manner by raising awareness and creating knowledge-sharing opportunities. Such
capacities are essential for avoiding duplication and overlapping and for encouraging
coordination and synergy among different projects and programs.
18. Subcomponent 3.2: Commune and village cadre training. This will provide various
trainings to CDB members and other stakeholders at the commune level. It has been proposed
that an 18-month Start-up Capacity Building Plan be developed on the basis of an already
prepared capacity-building strategy and in reflection of the lessons and experience from the
capacity-building efforts of the first NMPRP. This will be followed by the preparation of a more
comprehensive capacity-building plan by each province. The trainings will be provided by
provincial training institutes (PTIs).
19. Subcomponent 3.3: District cadre training. This will focus on district-level training
activities, primarily for DPMU staff, also to be conducted by PTIs. The same capacity-building
plans mentioned above will provide the details of the trainings at the district level.
46
20. Subcomponent 3.4: Employment-related skills training. This is a pilot with the aim of
enhancing employability of unemployed and underemployed youths from poor households in the
project communes by providing them with market-linked skills in partnership with public and
private vocational training institutions. More details are provided in Attachment 4.2.
21. Subcomponent 3.5: Safeguarding assets of communities and households. This aims to
build the communities‘ capacity to understand and mitigate natural disaster risks and to integrate
risk management into the project- supported subprojects. A matrix on integration of disaster risk
management has been prepared.
Component 4 - Project Management
22. Under this component (which is 10 percent of the total project cost), the project will
undertake various measures to ensure effective and efficient project management and
implementation. It will support establishment and operational costs of the project units at
different levels (the Central Project Coordination Office (CPO), PPMUs, and DPMUs).
Commune Facilitators will be competitively selected and hired as members of DPMUs. As a
norm, one CF will take care of one to two communes in the four provinces that were included in
the first NMPRP, whereas in the two new provinces each CF will cover only one commune.
23. Project monitoring and evaluation will build on the best practices of the first NMPRP,
combining a management information system to track outputs and an external evaluation to
assess impacts. Measures to prevent any incidences of fraud and inappropriate use of fund will
be ensured by adherence to the Governance, Transparency and Anti-Corruption Action Plan.
24. The project will promote quality communication and information dissemination at all
levels in order to ensure transparency and informed participation of various stakeholders. Special
attention will be paid to information dissemination at the commune level in view of high level of
illiteracy in the national language (Kinh) among ethnic minority populations, especially women.
The project will make it mandatory to translate or orally communicate all project-related
information wherever necessary.
47
Attachment 4.1: Commune Planning Process
Integrated planning process and SEDP
1. Coordination and synergies among government as well as externally supported projects at
the commune level are currently a key challenge because of the poor information flow and a lack
of systematic approach to the planning process. To address this issue, the project promotes
integrated participatory planning process at the commune level. The process is ―integrated‖ in
two senses: all the investments and subprojects under the NMPRP-2 will be identified and
proposed in the single annual planning process, and anticipated supports by other projects and
programs (such as P135-2 and P61) will be taken into consideration in order to avoid
overlapping and duplication and to promote coherence and synergy among the financed
activities. The project support for the integrated planning process aims at both ensuring the
quality of commune subproject proposals and gradually building the planning capacity of
commune and district players during the relevant SEDP period (2011–15).
2. The planning exercise will take place annually at the commune level with the CDB as the
key actor. Prior to this, DPMU will review and identify pipeline proposals of other projects and
programs that would involve the NMPRP-2 communes. According to the current government
planning cycle, district preparation of proposals for government-financed projects and programs
is undertaken around July/August and would precede the start of the annual planning process of
the NMPRP-2. District-level activities to facilitate information sharing and coordination among
different units will be supported by the project under subcomponent 3.1 (capacity building for
socioeconomic development planning). A list of such pipeline proposals prepared by the DPMU
will be shared by the CFs working in the district.
Commune planning process
3. The commune-level process is guided and facilitated by a CF. S/he will provide the
information regarding pipeline proposals to the CDB for its review. This will be followed by the
CDB‘s passing the information to village leaders. The process includes the following key steps.
Step 1- Meetings in villages
4. The leader of each village or WU branch will organize meetings with villagers to propose
and select subprojects. Both men and women, especially the poor and the most vulnerable groups
in the village, should be invited to the meetings. CDB members and the CF are also invited to
assist in facilitating and clarification. The meeting would pay attention to the following aspects:
The ethnic language should be used if it is preferred by the participants.
In case the meeting uses the national language, an interpreter should be arranged for
those in need of translation.
The invitation should be provided well in advance to give villagers time to think it
through, and the subject should be clearly presented.
Both wives and husbands should be invited.
If the village has a large population, two or three meetings should be organized to
maximize the effectiveness of consultation.
48
The meeting time needs to be adequate for people to discuss fully and make proposals.
The meeting will also discuss and agree on O&M tasks for the proposed subprojects.
Step 2- Proposal preparation and submission to CDB
5. Heads of villages/WU branches are to prepare the subproject proposals, with support, if
necessary, from CFs or members of CBD. The proposals could be handwritten, but they need to
be clear, strictly following the sample. Each subproject has its own proposal document, which
includes:
Estimated number of beneficiaries
Estimated investment budget for subproject, including costs for O&M (if needed)
Name of the person(s) in the village who will be responsible for supervising the
subproject implementation (individual or group of people)
Implementation method (community group with technique or the group of households,
etc.)
Types of local contributions (labor force, materials, or cash) and estimated value.
Step 3- Screening of subprojects at commune level
6. Steps of the screening process are as follows. First, after receiving the subproject
proposals of villages and WU branches, CDB checks and reviews the proposed subprojects to
identify the following issues:
Whether the proposed subprojects are in conformity with general guidelines and are
under the scope of the project
Whether there is no overlap with the proposals under other projects/programs
Whether the subprojects are feasible in specific conditions of that village
Whether costs are reasonable (compared with local costs, with the similar works,
subprojects, etc.)
Whether subprojects are targeting the poor and vulnerable groups
For CDBC, proposals should be within the allocated budget, and proportions among
different subcomponents should be followed.
7. The CDB will adjust the proposed subprojects that do not meet the above criteria. In the
reviewing process, adjustments will be made: packaging proposals together from different
villages if they are interrelated, so making one investment makes sense (such as different
stretches of roads); reducing the number of subprojects; changing the investment categories;
increasing or reducing investment scales; increasing or reducing the budgets; changing the
number of beneficiaries; or even rejecting infeasible subprojects. In the process, the CDB should
discuss adjustments with the heads of villages/WU branches, and a field survey or reassessment
should be conducted if necessary.
8. Second, having completed the above steps, the CDB summarizes all the selected
proposals, prepares two separate Commune Subproject Proposals: one for 1.1 and the other for
CDBC. Once completed, the CDB will make a public announcement of the proposals and make
modifications if necessary. Then the proposals will be sent to the DPMU. The CDB should make
a list of standby subprojects in case one of those submitted is rejected by the DPMU (see step 4).
49
Step 4- Appraisal and Approval by DPMU
9. The DPMU will check whether these subprojects fulfill the criteria, whether the proposed
fund for each activity is reasonable as compared with that in the locality, whether the proportions
of subcomponent budgets meet the requirements, etc. DPMU will inform and provide guidance
to CDBs for necessary corrections/modifications, if needed. Unsatisfactory subprojects may be
replaced by those on the standby list five to seven days after getting the notice.
50
Attachment 4.2: Livelihood Approach
Livelihood situation
1. The high economic growth achieved by Vietnam during last decade has been a key driver
to poverty reduction. Some regions and communities have, however, remained poor due to
structural constraints imposed by quality of information, resources, infrastructure, and market
development. The agrarian nature of the local economy in the Northern Mountain regions has
prevented the poor from benefiting from high growth opportunities in manufacturing and the
services sector, which grew respectively at 10 percent and 7 percent, compared with 4 percent in
agriculture sector. The Vietnam Household Living Standards Survey 2006 shows that income
from crops and agriculture-related wage labor contributes 55 percent of the income earned by the
poor in the project provinces. The food expenses account for nearly 53 percent of expenditures
by the poor. Food shortages and winter conditions force the poor to borrow money or food,
which is usually repaid with high interest rates (between 40 and 50 percent), tied labor, and/or
the sale of standing crops.27
Drug addiction in remote and isolated communities compounds the
problem further. Inefficient public service delivery and market failures challenge the livelihoods
of the poor in the project area. Access to financial services from formal financial systems is also
lower than the national average, both in terms of client coverage and per capita access. Only one
third of the population has access to reliable transport and daily access to markets. Furthermore,
the poor in the Northern Mountain region remain vulnerable to different types of shocks to
livelihoods and well-being. These include life cycle events (i.e., illness, old age, death, etc.) and
covariate shocks (floods, disease outbreak, climate change, etc.). Inefficient public service
delivery and market failure challenge livelihoods of the poor in Northern Mountains regions.
Project approach
2. The project aims to improve employment and income-earning opportunities for rural poor
households in targeted communes. A core element of the project strategy is to organize small and
marginal producers into common interest groups around common livelihood activities and
increase their share in key pro-poor value chains, including agriculture, livestock, forestry,
fisheries, and handicrafts. The project will build partnerships with government agencies, banks,
extension systems, and other input/service providers to enable CIGs to increase their access to
information, finance, technical expertise, inputs, and services for productivity enhancement and
to increase production. It will also establish market linkages with public, private, and/or
cooperative enterprises for enhancing participation of poor people in value chains.
3. Building upon the successes of current initiatives in Vietnam and elsewhere, the project
will undertake twin approaches—a ―resource-based approach‖ and a ―market-led approach‖—for
developing livelihoods of the poor and integrating them with markets. Both these approaches
endeavor to bring producers and buyers closer together. The resource-based approach (demand-
driven –subcomponents 2.2 and 2.3) emanates from the logic of organizing project activities
around dominant pro-poor livelihoods in t local areas and creating opportunities for the poor to
move up the value chain. The market-led strategies (subcomponents 1.2 and 3.4) induce
aggregation around select subsectors/products having high growth potential with comparative
27
Data obtained during field visits in Dien Bien and Lao Cai provinces.
51
advantage for poor producers. New products and innovating business linkage models with rural
producers will be encouraged in addition to supporting employment-linked skills training for
young people in an attempt to diversify livelihood sources. These mutually reinforcing
approaches will bring synergies in resource and business linkages and allow flexibility in
targeting livelihood strategies in different geographical locations, taking into account local
situations.
Project Approaches for Developing Livelihoods of the Poor
4. The project will actively incorporate gender strategies in the project activities by
strengthening women‘s collectives and providing them with technical and financial resources to
support their comprehensive micro plans in a demand-driven manner. These collectives help
poor households to smooth consumption, to address food, nutrition, and health needs, and to
meet other social and economic development aspirations.
Component Description
5. During the first two years, the project will pilot livelihood initiatives building on existing
experiences in Vietnam, particularly those from the Northern Mountain Region. It will use this
opportunity to create an enabling environment, to build the knowledge base and skills, and to
evolve organizational arrangements for supporting the livelihoods of the poor. Viewed in this
context, the following description of the subcomponents suggests possible strategic directions for
developing replicable models of community institutions and business linkage practices for full-
scale implementation.
Subcomponent 1.2: Diversification of market opportunities and business linkages innovations
6. This subcomponent (estimated US$6.2 million) is designed to help provincial and district
project teams develop a clear understanding of pro-poor livelihoods in the project areas and to
explore market opportunities for diversified livelihoods. It will support specific efforts to make
supply side and market institutions work for the poor. Accordingly, the assistance from this
subcomponent will be used for research and analytical studies to identify market opportunities
and new products/services and to address measures for create enabling environment; for
partnerships with banks, NGOs, and the private sector to provide dedicated linkage support to
Market-Led Approach
Component 1.2
Diversification of Market
Opportunities and Business
Linkage Promotion
Productive partnerships
Value chain development
Business innovations
Component 3.4
Market-linked skill trainings
Formal sector jobs
Skill Upgrading
Resource-Based Approach
Component 2.2
Livelihoods Support and
Production Services
Organizing CIGs
Access to finance and services
Market linkages
Component 2.3
Support for women’s social and
economic development
Strengthening women‘s union
Enhanced Market
Participation
Inclusive Growth
Social Protection
52
rural producers and microenterprises; and for a business innovation fund to provide grants on a
competitive basis to promote innovative business ideas and unconventional approaches for
business linkages for the rural poor.
7. Research and analytical studies. At the outset, situational assessments will be
undertaken by qualified institutions/consulting firms for each of the project provinces. These
studies will help the project to scan market opportunities, identify pro-poor value chains, review
access to finance and livelihood initiatives in the province and identify best practices, map key
service providers, and scope out potential partners from among banks, NGOs, and public and
private sector enterprises. Where current literature is unavailable and knowledge is undeveloped,
the project will commission subsector/value chain studies to identify critical gaps and formulate
feasible intervention strategies for enhancing market participation of the poor. The project will
recruit two consultants for technical assistance support until such time as in-house expertise is
developed within the Ministry of Planning and Investment (MPI). These professionals will have
relevant knowledge and skills for implementing private sector strategies for livelihood
development, inclusive business, and making ―markets work for the poor‖ approaches. These
consultants will assist in drafting terms of reference for the situational assessments and value-
chain studies, recruiting institutions and firms to undertake studies, and reviewing the progress
and quality of studies and developing strategic actions plans from them.
8. Productive Partnerships. The project will also seek to develop productive partnerships
with the public sector, private firms, cooperative enterprises, and/or NGOs to support business
linkage initiatives in two or three strategic subsectors or products. The box immediately below
illustrates one type of approach for a given area of potential livelihoods support.
Value Chain Development in Apiculture (Honey Production)
Apiculture, an important livelihood source for poor and marginalized population groups, was
chosen for value chain development under the GTZ-supported project for Sustainable
Management of Natural Resources in Quang Binh province. The intervention entailed
strengthening beekeeping clubs, organizing district apiculture associations, and improving
business linkages and cooperation among the local beekeepers, input suppliers, and service
providers. The project facilitated a series of technical trainings by ―master beekeepers‖ and
launched a marketing campaign supported by improved packaging and brand building efforts.
The average productivity of bee hives increased by 50 percent, and the average additional
income from apiculture and the number of bee keepers doubled from 2004 to 2008.
9. These collaborative arrangements will attempt to aggregate producers and link them with
firms in a cluster of communes or districts, depending on economies of scale and viability
considerations. These efforts aim to reduce technical, commercial, financial, and/or social risks,
to increase productivity, and to produce income gains in a value chain in ways that benefit all
parties. Each partnership is expected to provide bundled service provision in two or more of the
following segments: improved access to credit; productivity and quality enhancement support;
technical support and technology extension; logistics infrastructure and information services;
packaging, labeling and branding; and marketing support, including formal buyback
53
arrangements. Contracted production, outgrower schemes, and contracted service provisioning
typically fall within this realm.
10. The project will also explore strategic partnership arrangements with commercial banks
to facilitate smoother financial access for the poor. The project will support banks in creating
dedicated staff resource for supporting project clients, for business process re-engineering, and
for product/channel innovations. Similarly, the project will partner with resource
institutions/NGOs to strengthen commune/village savings and credit groups to make them
creditworthy clients of the commercial banks.
11. The project will engage in stakeholders‘ consultations for developing guidelines for
partnerships in livelihoods sector. It will organize annual Partnership Forums to bring together
the market participants, such as input suppliers, service agencies, large buyers, and small
producers. The project will constitute an Expert Committee at CPO (consisting of technical
experts drawn from MPI, the Ministry of Agriculture and Rural Development (MARD), the
Ministry of Labor, Invalids, and Social Affairs (MOLISA), banks, trade associations, etc.) for
screening and approval of partnership proposals. The technical consultants recruited at CPO will
provide secretarial support to the expert committee and help in developing public-private
partnerships (PPP) guidelines. These forums are expected to be held at the central level in the
initial years. Based on the experience gained, provincial forums will be held. The PPMUs will
dedicate staff resources for handling tasks related to productive partnerships, like undertaking
due diligence of proposals, participating in negotiations, drafting memorandums of
understanding (MoUs), and reviewing implementation of partnerships.
12. Innovation Grants. The project will also organize annual provincial level ―innovation
fairs‖ to identify, celebrate, and encourage business innovations. Grant support will be extended
on a competitive basis to innovative business ideas/models that include, but are not limited to,
the following: aggregation of small producers into activity/trade clusters; private provisioning of
livelihood support and business linkage services; technology, product, or service innovations;
quality enhancement and cost competitiveness of small producers; fair trade initiatives; and
enterprise models for market-linked skill enhancement. The technical consultants will support
CPO to develop guidelines for innovation fairs and innovation grants. They will also assist
PPMUs to implement this aspect of the subcomponent. A committee of national and provincial
experts will be constituted for screening and selecting innovations. The innovations will be
reviewed against key criteria like inclusion of the poor, livelihood impacts, scalability,
replicability, and sustainability.
Subcomponent 2.2: Livelihood support and production services
13. This subcomponent (estimated US$15.8 million) will facilitate improvements in
livelihoods of the project clients by making investments in economic organizations of the poor
and enhancing their access to assets, credit, skills, technology, and markets. The support will be
provided for the following: organizing CIGs around specific livelihood activities; arranging
technical assistance and support services like business orientation and skill trainings,
product/design development, bulk procurement of raw materials, extension services, etc.;
facilitating access to finance and risk management services; provision of small-scale value chain
infrastructure for value addition, storage, quality control, and packaging; and facilitating market
54
linkages. Group formation will be encouraged around pro-poor livelihood activities suitable to
local conditions and market potential.
14. Networking of CIGs will be encouraged at the commune/district level to achieve
economies of scale and attract private sector interest. The project will facilitate value chain
analysis and annual business planning at the network level (aggregation of annual plans of
CIGs). Marketing training (on themes like cost effectiveness, quality addition, value addition,
grading, packaging, and marketing) and assistance for implementing business plans will be
provided to all CIGs. However, the project will also support, on a selective basis, technical
assistance to CIGs/producer associations in the form of technical counseling, project
identification support, market surveys, feasibility studies, business plan development, strategic
consulting for technology, and market access. Such support will include market linkage
facilitation, value chain coordination, and hand holding. Since not all the commune population
can receive the project support, group formation needs to be conducted in a transparent manner
with the involvement of CDB. Wherever producers‘ groups or associations exist, the project will
also consider extending similar services in coordination with their promoter agencies.
15. In view of the limited experience with this type of livelihood support among the key
project stakeholders, this subcomponent will be first piloted with the technical and
implementation support of local NGOs in selected districts before detailed modalities are
elaborated and ready for replication on a wider scale. The initial set of pilot communes will be
selected based on criteria that include the following: commitment to the government programs;
potential for livelihood development activities; availability of institutional support in the form of
women‘s/farmers‘ unions, cooperatives, banks, etc; and market location advantage. On the
project side, planning and implementation of this subcomponent will be primarily facilitated by
Business Development Officers (BDOs)28
with the support of CFs. Each BDO will support 10–
12 communes. The CFs will be responsible for formation of CIGs, their registration with CDBs,
livelihood analysis and micro-planning, and the formulation of subgrant proposals. The project
will build a network of trained Commune Professionals29
as service providers to rural producers
such as business accountants, community extension workers, livestock activists, marketing
logistic providers, etc. They will be linked to public/private providers of technology extension,
inputs, services, etc. These ancillary services create enterprise opportunities for young people as
they are rendered on a fee-for-service basis. For an initial period of two years, the project will
finance the services of CPs out of subproject grants. The payments will be made by CDB upon
review by user groups.
Subcomponent 2.3: Support for women’s social and economic development activities
16. This subcomponent (US$10.5 million) will support activities that are specifically selected
by groups of village women to enhance their economic and social status. The core strategy of the
program is to partner with commune-level Women‘s Union (WU) and make specific efforts to
develop them as inclusive institutions. The project will help these unions expand their activity
28
Business Development Officers will specialize in arranging technical trainings and facilitating financial,
technology, and market linkages. 29
Community Professionals will be selected out of best practitioners and educated youth who have penchant to
acquire technical skills and provide enterprise service support to rural producers.
55
profile to provide range of financial services, effectively complemented by battery of public and
social services for vulnerability reduction and risk management.
17. The project will strengthen their savings and credit activities. This entails improving their
financial management and governance systems, building capacity to develop business expansion
plans, and strengthening community-based mechanisms for monitoring and supervision. The WU
largely extend loans to their members for meeting immediate consumption needs, particularly
health care and food purchases, thereby reducing vulnerability of the poor. The project will
organize basic orientation, business planning, and technical skills development for enterprise
promotion among women. CPs will be engaged to support poor households in financial literacy
and to plan livelihood investments of member households. The WU will also be linked to the
commercial banks to enhance the resources that allow them to finance livelihood needs of
women. The WU will be encouraged to anchor information, education, and communications
campaigns at the commune/village level on social issues, such as drug addition, children‘s
education, child labor, and HIV/AIDS. The project will facilitate their linkage with government
institutions for efficient delivery of social protection, public services, and local initiatives like
grain banks, community health services, etc. to address food shortages, health, nutrition, and
education needs. This will be complemented by investment in social accountability mechanisms
that enable the Women‘s Union to demand and get access to better-quality public services and
entitlements.
18. The project will facilitate formulation of women‘s action plans by WU and women‘s
groups by aggregating socioeconomic needs prioritized by their members. It would provide
subgrants against women‘s action plans that could include a wide range of activities, including
emergency support for food and health care purchases by extremely poor and vulnerable poor,
asset accumulation, retiring high-cost debts, and community enterprise initiatives like grain
banks, medicine depots, etc.
19. The project will enter into formal MoU with provincial/district-level WU. Again, the
project will pilot this subcomponent with the technical support of local NGOs having experience
in implementing programs in themes relating to microfinance, livelihoods, gender, and social
development. The project activities at the commune level will be primarily anchored by
specialist Commune Facilitators (women), each of whom will support about two communes on
an average. CFs will get support from BDOs for facilitating bank and market linkages.
Subcomponent 3.4: Market-linked skills training and employment linkages
20. The objective of this subcomponent is to promote inclusive growth by enhancing the
employability of unemployed and underemployed young people from poor households for jobs,
particularly in high-growth sectors,30
by providing them with market-relevant skills. It will
particularly encourage private provisioning of high-quality livelihood support services by
developing technical and market linkage skills in Commune professionals. The project will also
support higher-order skill upgrading in the rural enterprise sector, having defined market
linkages. The formal sector employment (job) for one person in a poor household brings in stable
30
The economic growth in north Vietnam is driven by strong performance in construction, garment making, agro-
processing, and travel and tourism.
56
and higher levels of income, often associated with social security benefits.31
Accordingly, the
project aims to offer a complete ―jobs‖ solution to the rural young people from project
communes by integrating various elements of the jobs value chain. The project will use CDBs to
identify the unemployed rural young people in a transparent manner, helping them acquire
employable skills, placing them in apprenticeships and jobs, providing post-placement support,
and instituting follow-up mechanisms.
Public-Private Partnerships for Vocational Training
Close cooperation between training centers and enterprises is encouraged under the National
Target on Education and Training. The biggest advantage of this model is that the trainees are
likely to find jobs immediately after completing the course, because the local firms training them
will hire them. The vocational training establishments have training contracts with Vietnam
National Coal and Mineral Industries Group, the Vietnam National Textile and Garment Group,
the shipbuilding industry, and a few other private players.
21. The technical consultants at CPO will initiate this subcomponent, which will be
essentially driven from the province/district level. The project will encourage public-private
partnerships to provide market orientation to the training efforts and improve the quality of
vocational education programs. The project will systematically engage with trade associations,
potential enterprises in public and private sector, and hiring agencies in the private sector to
develop customized courses and curricula at vocational education centers. This entails secondary
research and scanning market reports to identify growth sectors and potential partners to
understand their entry-level employment needs and manpower specifications. The project could
also support technical partnerships between vocational training centers in project provinces with
initiatives such as Know One Teach One in Hanoi, the Vietnam Tourism Certification Board,
etc. for both accreditations and franchise development. In order to improve the chance of
selection of poor students, support measures like counseling and intensive coaching camps for
developing soft skills will be organized. This flexible model will allow the project to resonate
over a wide canvass of job market with diverse industry partners on the one hand and the poor,
with a range of skills, on the other. The PPMUs will be closely coordinated and supported in
project implementation and follow-up activities. The CDBs will play an active role in
information, education, and communication activities related to job programs and identification
of potential candidates for employment related skills trainings.
22. PPMUs will anchor comprehensive training of Commune professionals by linking up
with providers of high-quality technical trainings in the public and private sectors. Technical
assistance will also be provided by the project to such institutions to upgrade their training
contents, training materials, etc.
31
Market-based social security route to poverty reduction allows ―human capital public interventions‖ that help
individuals, households, and communities better manage life cycle risks.
57
Summary of Implementation Arrangements for
Livelihoods Component under Northern Mountains Region Poverty Reduction Project – 2
No. SubComponent Elements Outputs Who will deliver?
What needs to be
done?
Building Technical
Capacity
1.2 Diversification of Market
Opportunities and
Innovative Businesses
Situational
Assessments for each
province
(This activity will be
initiated at MPI level)
a. Provincial Reports
b. Strategic action plans
Consulting firm a. Drafting TORs
b. Procurement
c. Supervision
d. Review of Outputs
e. Finalization of
strategic action
Technical Consultant at
CPO for a period of two or
three years to anchor this
component and build in-
house capacities
Partnerships with
a. Banks
b. Input firms
c. Large buyer
d. Service providers
(These partnerships
will be initiated at MPI
level in first two years
of the project but
regional partnerships
are likely to be forged
at provincial level from
third year onwards)
a. Output based contracts
with partner agencies for
creating value for project
clients.
(For e.g.
a. Financial inclusion of
XXX households
b. XXX amount of bank
credit extended
c. XXX volume of inputs
provided
d. XXX value of services
provided
e. XXX volume of output
purchased)
Technical Committee
at CPO (comprising
MPI, MARD,
MOLISA, Banks,
Trade Associations,
etc.) for screening and
approval of PPP
A few partnerships
could emerge at
provincial level from
2 or 3 onwards for
which similar
committees could be
established.
a. Stakeholders
Meeting
b. Partnership
guidelines
c. Call for proposals
d. Due diligence
e. Partnerships Forum
f. Negotiations with
potential partners
g. MoU with partners
h. Review of
partnerships
Technical Consultant at
CPO to help develop
guidelines and provide
secretarial support to
Expert Committee for a
period of two or three
years and build in-house
capacity.
However, PPMUs will
dedicate staff resources for
PPP to undertake due-
diligence of proposals,
participate in negotiations,
MoU and review of
partnerships.
Innovations Fair
(This is a provincial
level activity)
a. Identification and
celebration of livelihood
innovations
b. Business innovation
Panel of national
experts to be
constituted for each
province
a. Guidelines for
innovations fund
b. Disseminating
guidelines and
scouting innovations
c. Due diligence of
innovation proposals
d. Selection of
innovative
Technical Consultant at
CPO to help develop
guidelines and create
capacities in PPMUs to
anchor innovations fairs at
provincial level.
58
No. SubComponent Elements Outputs Who will deliver?
What needs to be
done?
Building Technical
Capacity
business/livelihood
solutions
e. Grant support for
innovators
f. Review of grant
activities
2.2 Livelihood support and
production services
Formation of groups
and capacity building
(This is a commune
level activity)
a. Organizing project clients
into Common Interest
Groups
a. Business
Development Officer
b. Commune
Facilitators
a. Village meetings
b. Formation of
Groups
c. Capacity building of
groups and trainings
(group management,
basic business
orientation, finance,
book keeping,
specialist skill
trainings, etc.)
d. Livelihoods/value
Chain analysis and
preparation of annual
calendar of activities
d. Review of
groups/activities
Technical assistance
support from local NGOs
for initial group
mobilization and trainings
Access to financial
services
(This is a
district/commune level
activity)
a. Financial inclusion
b. Access to livelihood
finance
c. Remittance services
a. Business
Development Officers
b. Commune
Facilitators
a. Training and
exposure to bank
officials
b. Joint identification
of clients
c. Documentation
support for banks
d. Post credit
supervision and credit
recovery support
Technical assistance from
partner bank for training
BDOs and CFs on banking
products, guidelines and
procedures.
Service provision
(This is a
district/commune level
activity)
a. Access to public services
b. Private provisioning of
production services
a. Business
Development Officers
b. Commune
professionals
a. Selection of CPs
b. Training and
exposure of CPs
c. Linkage with
public/private
Technical assistance
support from
NGOs/Resource
Institutions
a. Policy for CPs
59
No. SubComponent Elements Outputs Who will deliver?
What needs to be
done?
Building Technical
Capacity
providers of
technology extension,
inputs, services, etc.
d. Review of CPs by
user groups at CBD
e. Building network of
CPs
b. Training of CPs
Market linkages
(This is a
district/commune level
activity)
a. Collective purchase of
inputs
b. Collective marketing
initiatives
a. Business
Development Officers
b. Commune
Facilitators
a. Networking of CIGs
at Commune level
b. Value chain analysis
and annual business
planning at network
level (aggregation of
annual plans of CIGs)
c. Marketing trainings
to CIGs (cost
effectiveness, quality
addition, value
addition, grading,
packaging and
marketing)
d. Implementation of
business plans
Technical assistance from
local NGOs/resource
institutions for bottom-up
marketing activity and
developing best practice
sites
Subgrants to groups
(This is a commune
level activity)
a. Raising resources for
CIG for implementing
business plans
a. Business
Development Officers
b. Commune
Facilitators
a. Identification of
investment/financing
gaps for implementing
annual business plans
b. Development of
subgrant proposals
c. Appraisal and
approval of proposals
d. Utilization of
subgrants
e. Review of subgrant
implementation
2.3 Support for Women
Economic Development
Strengthening WU
a. Enrolment of left-over
women into union
a. Commune
Facilitators (women)
a. MoU with Women‘s
Union
Technical assistance
support from local
60
No. SubComponent Elements Outputs Who will deliver?
What needs to be
done?
Building Technical
Capacity
Activities
(This is a
district/commune level
activity)
b. Strong thrift and credit b. Training needs
assessments
c. Capacity building
(leadership and
governance, thrift &
credit management,
MIS, etc.)
NGOs/resource
institutions for
strengthening Women‘s
Union
Facilitating financial
access
(This is a
district/commune level
activity)
Credit access from
commercial banks
a. Business
Development Officers
b. Commune
Facilitators (women)
a. Training and
exposure to bank
officials
b. Business planning
for Women‘s Unions
c. Planning for bank
linkage for WU
d. Monitoring and
supervision of bank
linkage
e. Financial literacy
and counseling
Enterprise development
among women
(This is a
district/commune level
activity)
Women enterprises a. Business
Development Officers
a. Basic business
trainings
b. Skill and
entrepreneurship
development programs
Technical assistance from
NGOs/Resource
Institutions
Social initiatives
(This is a
district/commune level
activity)
a. Participation of women
for effective delivery of
public services
b. Vulnerability reduction
services
a. Commune
Facilitators (women)
a. IEC on social
development aspects
b. Trainings for
community level
initiatives like food
security, health,
nutrition, education,
etc.
Technical assistance from
NGOs/Resource
Institutions
Subgrants
(This is a commune
level activity)
Resources for WU for their
women‘s action plans
a. Commune
Facilitators (women)
a. Development of
women action plans
b. Development of
subgrant proposals
c. Appraisal and
approval of proposals
61
No. SubComponent Elements Outputs Who will deliver?
What needs to be
done?
Building Technical
Capacity
d. Utilization of
subgrants
e. Review of subgrant
implementation
Market linked skills
training and employment
linkages
Training of rural youth
for private
service provisioning for
livelihoods sector
(This is a
province/district level
activity)
Trained Commune
professionals in different
livelihood disciplines
a. Resource
institutions
a. Identification of
Commune
professionals
b. Follow-up activities
Market linked skill
trainings for
employment
Employment for rural youth a. Resource
institutions
a. Meetings with trade
associations, lead
private sector and HR
firms
b. Technical assistance
for vocational
education institutes
(curriculum, training
pedagogy, MIS,
placement)
c. Partnerships with
public and private
training institutions d.
IEC for employment
of youth in communes
e. Training and
placement of youth
f. Follow-up activities
Technical partnership with
expert institutions like
VTCB for accrediting
provincial vocation
education institutions
62
Attachment 4.3: Proposed Approach to Integration of Disaster Risk Management
SubComponent
Activity Work
Possibility of integrating
disaster risk mitigation Procedures Stakeholders
1.1 & 2.1 Upgrade and newly construct: - inter-commune roads, bridges and gullies. - irrigation works: drainages, small dams - water supply system & sanitation: water containers for household or groups of households (plastic, cement containers, etc.), wells, two-compartment latrine, etc. - projects that provide clean & renewable energy: biogas trenches, small hydroelectric stations. - rural markets - inter-hamlet roads, small-scale irrigation, small bridges, public sanitary projects, cattle-sheds, interior field canals.
Site selection
for
constructing
infrastructure
Appropriate site selection can
reduce and mitigate hazard
impacts
Based on economic, social criteria and advantage level (table 2) to select site for constructing infrastructure. In case the site is affected by potential hazard, consider to shift to a new site with fewer risks.
Project Management
Unit (PMU)
Women‘s Association
Youth Union
Community people
Design The infrastructure will be
hazard-safer if the design
solutions take full advantage
of the natural topography
Take advantage of terrain and
landscape characteristics to
reduce implicit impacts of
natural hazards (places which
can drain water quickly or
which can change the
direction and speed wind).
Reduce digging, banking volume which intervenes into the nature, do not narrow or block natural flows and do not worsen the site‘s geological conditions (the stability and loading intensity of land, the covering vegetation layer). For construction of rural roads: - When banking the road-bed on the natural surfaces with the slope equal or over to 20%, it is needed to create terrace under the road-bed in order to make it stable and not slipping. - It is necessary to built retaining wall at the places where the natural terrain slope is more than 40% to make the road‘s surface stable - It is needed to keep the horizontal slope of the road‘s surface exact 4% from center toward two sides of the road. Along the road‘s sides must have drainage ditches with minimum longitudinal slope of 1%. On slope terrain where the water flows too much onto the roads, the drainage ditches cannot discharge all the water; it is needed to build sluice gate to let the water flow to other direction.
32
Consultant experts
PMU
Assessing
capacity of
contractor/
local labor and
local people
Assess the capacity of
contractor and local labor in
order to choose suitable
construction time and
methodologies
Assess contractor‘s financial ability and construction skills Assess the technician‘s or the local people‘ ability and level of construction supervision or inspection. Assess the local sources of materials supply in each of the six mountainous provinces
PMU
Choosing
construction
Choose the suitable
construction time basing on
Safe construction time for the six mountainous provinces is from September to March. Avoid
PMU
Contractor/ local labors
32
About detailed design method, refer to ―Guidelines for construction of road and bridge for transportation in rural and mounta inous areas,‖ Transportation
Publishing House 1999.
63
SubComponent
Activity Work
Possibility of integrating
disaster risk mitigation Procedures Stakeholders
time the statistics of natural hazards
in the construction location
(time of occurrence,
frequency, magnitude)
constructing from April to August due to high frequency of flash flood and whirlwind. For rural roads, the construction period can be divided into different phases according to the financial ability and local transportation demand
Choosing
construction
methodologies
Appropriate construction
methodologies will ensure that
the construction works will
reach the designed operation
and safety goals
Choose simple construction methodologies that have
little affects the society and the environment.
Choose the construction methodologies (for new
constructions) and reinforcement methodologies ( for
retrofitting constructions) without stagnating other
usual activities in project location
PMU
Contractor/ local workers
Training in
construction
and
supervision
skills
Training in construction and
supervision skills for local
labor and local people is
important for applying
building code and seeking
safety goal
Hire consultant experts or skilled workers to train the
local labor and local people in required skills and basic
techniques of construction and disaster mitigation.
Address any skill training issue necessary for the
implementation of the proposed construction
methodologies and solutions (e.g. possible on-the-job
training included in the implementation process)
PMU 33
,
Consultant expert
Construction
/implementati
on
Construction conforming to
the design intent to ensure that
the infrastructure works can
avoid or reduce the damage in
the case of the natural hazards.
Ensure that the quality of the construction is conformed
to requirements of the design.
Contractor/Local labour
Supervise the
construction
quality
Supervise the construction
quality to ensure that the work
is constructed conforming to
the design intent.
- Establish a cycle of inspecting and testing technical
specifications of the works during the construction
stage.
- Divide the construction process into construction
stages, each stage encompasses of several activities.
When completing each activity, check and take-over
the qualified work, then move to the next
activity/stage.
- Check the materials and the conformation to the
design intent.
PMU
Women‘s association
Youth Union
Local People
Operations and Operate and maintain - Provide guidelines and set up plans, management and PMU
33
Training construction skills for workers is the contractor‘s responsibility; however, in the conditions of the six mountainous provinces, hiring local workers is
encouraged to create jobs and increase the income, so the Board of project management should also be in charge of training work.
64
SubComponent
Activity Work
Possibility of integrating
disaster risk mitigation Procedures Stakeholders
maintenance conforming to the required
process and norm can increase
the safety level of the works.
funding structure for operation and maintenance to
keep the safety level in conforming to the design‘s
criteria/ intent of natural hazard resilience.
- Define a procedure to be followed for the approval of
any structural alteration carried out through the design
life of construction works.
Women‘s association
Youth Union
Local people
2.2 & 2.3
Support:
- agriculture, forestry
and fisheries
production activities
and veterinary
medicine for group of
households.
- activities specifically
selected and
implemented by group
of village women in
producing handicraft
and traditional
products (improving
livelihood with the
priority for women).
Analyze the
existing
livelihoods
(occupations,
crops and
domestic
animals)
The lessons learn from
damage caused by natural
hazards to the existing
livelihoods are important
information to find out the
solution
Indicate the advantages and disadvantages ( in making
hazard-resilience and adapting to changes of the
natural and social environment) of the existing
livelihoods in the locality (e.g. cassava cultivation
quickly impoverishes the soil)
PMU
Consultant expert,
Women‘s association,
Youth Union
Local people
Select and
introduce new
livelihoods to
the local
people
Provide solutions to help the local people increase resilience and adaptation abilities to natural hazard of the existing livelihoods: - Afforesting, growing cardamom and acacia - Utilizing all opportunities to reclaim and develop the terraced field. - disseminating knowledge/way of adequate livestock housing: to cover or build semi-floating (half underground half on-the-ground) livestock- house to protect livestock from cold weather. Introduce new and appropriate livelihoods which can increase income as well as resilient and adapting to the natural hazards: - growing rubber trees - Implementing the pilot afforestation by reclaiming slopes of hills and mountains into co-level belts same as terraced fields but protected by Vetiver grass
34
which is capable of keeping water, preventing erosion for forest trees.
PMU
Consultant expert
3.2 & 3.5 Training for the
Analyze the
existing ability
The existing ability of cadres
and local people in reducing
Indicating shortcomings of the ability of the cadres at
all levels and local people in implementation, PMU
34
Use of the grass Vetiveria zizanioides as a hedge planted on the contour to prevent erosion, conserve water, and supply foodstuff for cattle is described. Vetiver
grass is inexpensive, durable, and adaptable over a range of climates. It has been used successfully in Fiji, India, and Nigeria and is being adopted by many other
countries, including Vietnam. This technology could replace high-cost/high maintenance conservation systems based on contour bunds and terraces. (Vetiver
Grass: The Hedge against Erosion, World Bank, Agriculture Publishing House, 1998).
65
SubComponent
Activity Work
Possibility of integrating
disaster risk mitigation Procedures Stakeholders
commune and hamlet‘s cadres as well as local people in: - community supervision of infrastructure construction - fundamental technical skills at operating and maintaining the infrastructure works - knowledge for raising awareness and making the communes and hamlets‘ cadres and local people to actively build disaster reduction plans - Identifying the locations susceptible to risks - making disaster preparedness and response plans for hazard prone locations. - planning scenarios for evacuating local people to safe places. - Protective methods and reproduction of households.
of cadres and
local people.
natural hazards is the
fundamental information to
develop the training program
and content.
supervising and operating and maintaining
infrastructure works.
Indicating insufficiency of the previous training
courses, capacity building programs and projects.
Develop
program for
new training
courses for
capacity
building
The courses can reduce the
vulnerability of rural
communities by raise
awareness of and skills of
disaster reduction and equip
the learners with knowledge of
new livelihoods which can
help improving incomes,
resilient and adapting to
condition of natural hazards.
Outline theme, objects and the number of participants in each training course of capacity building. Select objects which are given top priority for training: cadres at all levels, representatives of Women‘s Association and Youth Union, change agent/champion of the community. Develop the content of the course having knowledge of: the preparation of community disaster preparation and response plans to cope with events such as flash flood and livestock epidemics; measure to safeguard productive assets (adequate livestock housing and veterinary health care).
Consultancy expert
PMU
Carry out the
training
courses for
capacity
building
Organize classes
Print and deliver the leaflets
(using approaches: from lower to upper and ―both
studying and working‖, the training methods are simple
and easy to understand; the motto ‖Put hands to work‖
is the skillful combination between theory and practice)
PMU
Consultant expert
66
Attachment 4.4: Operations and Maintenance (O&M)
1. The legislative framework in Vietnam allocates all aspects of operation, management,
and maintenance of small scale infrastructure to the Commune People‘s Committees (CPC).
However, there is little documentation or practical guidance to support CPCs in fulfilling their
responsibilities in this regard. State budget allocations (recurrent budget overseen by the
Ministry of Finance) to CPCs are generally only sufficient to cover basic salaries and running
costs of the CPC itself, with no funding left for infrastructure operation and maintenance. At the
same time, the investment budget (overseen by MPI) has no budget line to cover essential O&M
needs at local levels. Therefore, funding for O&M depends on the contributions mobilized from
local communities. The level of funds that can be mobilized from poor rural communes is often
very limited and insufficient to cover these costs.
2. In addition, poor rural communes tend to be located far from provincial and district towns
where difficult travelling conditions restrict access to the services provided by such
administrative centers and deter technical field staff of line agencies from providing effective
services. CPC staff are often responsible for several different sectors, are poorly trained,
generally overstretched, and unable to provide sufficient time and attention to all aspects of
infrastructure O&M despite their best efforts. As a result of these practical difficulties, a number
of rural infrastructure assets have suffered from inadequate O&M, which has meant the
infrastructure provided has not sustained the full potential benefits, with many utilities quickly
falling into disrepair.
3. One of the lessons learnt from NMPRP-1 is that without O&M resources many basic
rural infrastructures invested under the first project are falling into disrepair and related services
are deteriorating. Provincial feasibility studies show that many infrastructures are in need of
quick repair and that routine maintenance is required to keep them functioning in normal
conditions.
4. Increasing investment in the basic infrastructure needs of rural communes is also shifting
the focus to making the benefits of such infrastructure more sustainable through the prioritization
of O&M systems as an investment and to more-equitable strategies that support the
government‘s move toward improved community participation and management of their
infrastructure.
5. The project will support the establishment of the O&M Fund and O&M teams at
communes and villages levels. The O&M Fund is calculated at 6.5 percent of the total
investment for any infrastructure and is provided to communes as owners of the fund. The fund
is kept in a bank account and will be used to cover O&M needs (mostly routine maintenance and
small just-in-time repairs). During the project‘s life, the O&M Fund will be funded 100 percent
from IDA sources. Also, the fund is open for contributions from local people, enterprises, and
any other resources. The O&M Fund will be maintained by Commune People‘s Committees.
O&M teams will be set up at communes and will be supported by training on technical issues
(routine maintenance), planning, and management of the funds. At the mid-term review, the
performance and functionality of the O&M funds and overall O&M support will be carefully
reviewed and assessed to outline strategic steps to ensure the viability of the initiative and find
67
ways to institutionalize them at later stage. The approach of phasing out of project‘s financing
and phasing in of local government and/or people‘s financing will be considered and decided
then.
6. The O&M Fund could be used for a wide range of operations and maintenance—from
routine maintenance (cleaning school grounds and buildings, replacing light bulbs, clearing
drains or waterways, weeding sideways for inter-village roads, etc.) to basic repairs and upkeep
(broken drain pipes, broken window panes, roof repair, re-plastering or painting, site stabilization
of inter-village roads, etc.). The latter set of activities that require small but important external
inputs (basic supplies, cement, paint, etc.) that help to prolong the useful life of infrastructure
will be a key area focus for the O&M Fund. At present, these activities are often left undone as
communities cannot afford even the small amounts of cash required, there are inadequate funds
from the recurrent budget of the communes, and yet the activities are too small to seek district
support.
7. Beside the establishment of the O&M Fund under the project‘s scope of works, an O&M
Awareness Campaign will be included to increase the awareness of not only authorities but also
local people who are the main users of the rural infrastructure utilities. During the project‘s life,
local people will participate in O&M activities. By doing this, people could have income, but it
is more important that they be equipped with knowledge and skills to perform O&M as daily
activities. This would also help maintain O&M practices after the project‘s life, making them
sustainable. Depending on different types of infrastructure, relevant user groups (such as parent-
teachers associations or water user groups) will be promoted and trained to advocate for and
oversee O&M activities. Capacity building for O&M teams at villages and communes will be
provided. Village conventions and regulations regarding the O&M of basic infrastructure are
also facilitated to be developed and to be contextually and culturally relevant.
8. The key thing in supporting and establishing the O&M Fund is to improve the awareness
of CPCs and people of the need to ―operate and maintain‖ the O&M activities along with their
investment in infrastructure. This initiative under the project hopes to contribute more to the
growing body of knowledge of what other projects/programs are doing, such as routine
maintenance work under Rural Transport 3 project. And the O&M Fund established under
project scope of works could be considered as the basis for sustainable O&M activities even after
the project is completed.
68
Annex 5: Project Costs
VIETNAM: Second Northern Mountains Poverty Reduction Project
