Rural Road Development and Poverty Alleviation in Lao P.D.R.

In general, organizations have their own particular project appraisal methods based upon their own transport management strategies. Cost-Effectiveness Analysis is the most popular method used for rural road projects. International organizations report diverse socio-economic impacts of their road intervention. However, when it comes to empirical evidence regarding the relationship between road and poverty, they have relied on inference and political implications due to regional contextual differences and political and organizational constraints. The existing research does not quantify the impact or specify the relation between road development and poverty.

The Community Road Model (CRM) is a management system used at the district level to develop and maintain rural transport infrastructure using Participatory Rural Transport Planning (PRTP). PRTP was designed as a simple, inexpensive and appropriate tool for rural road development planning based on ILO’s Integrated Rural Road Planning (IRAP). However, the CRM still is in need of development to adjust to a more sustainable perspective. There remain questions as to how well CRM affects sustainable poverty alleviation, how the approach is related to poverty alleviation and what particular indicator evaluates impact on poverty.

Mrs. Emi Doyle made a study that uncovered the factors, in the analytical relation between road development and poverty, and identify the indicators needed to evaluate the impact of rural road projects on poverty through CRM. Her objectives are as follows:

1. Develop an analytical framework to identify the indicators of project intervention on poverty alleviation;
2. Capture the CRM approach and issues in the Lao PDR;
3. Examine the impact of rural road development on poverty alleviation.

Conclusions

Public investment in the Lao PDR largely depends on Official Development Assistance. The ODA ratio is 18 percent of total GNP and 80 percent of total public investment.
The Lao-Swedish Road Sector Project II (LSRSP-II) also faced funding issues; funding finished in October 2004. After that, the project had to lay off two out of the four local consultants. The local consultants acted as key coordinators between the project office and the communities. Because of the lay-offs, the project assessment team could not access project sites in Luang Prabang and Khammouan Provinces. The project assessment was thus temporarily put on hold after October 2004. This highlights how funding and donor policies can strongly affect rural road development projects in the Lao PDR.

According to the country profile, accessibility and road conditions are related to the poverty gap and severity. However, the fiscal budget for rural roads is much smaller than that for national roads. Nevertheless, rural road development is one of main sectors in the Government’s Poverty Reduction Strategy Paper. Unfortunately, local governments do not have enough financial capacity to continue with rural road construction projects if the donors pull out. Rural road interventions are thus uncertain and unsustainable. Funding needs to be more sustainable and requires a long term commitment.

Answers for the three hypotheses proposed in the questionnaire design
First, do roads influence poverty reductions or not? The villagers spend their saved transport time on agriculture activities and education. This shows that the road itself influenced poverty reduction. The regression model of impact on poverty reduction assumes there is a relation regarding the distance from the project site. This hypothesis could not be examined because all respondents were living in a community within 0-10 minute walk from the site. Therefore, the identification of this critical impact on poverty reduction was not defined. However, this hypothesis can be tested using GIS and GPS technology in the future.
Secondly, was the road project design effective or not? Each stakeholder has positive and negative impacts. The project is considered successful when the net impact is maximized amongst all stakeholders. The survey result revealed that the degree of impact were immeasurable. Also, many of the impacts cannot be converted into monetary terms because the value of money was different for local communities and donors. In conclusion, the total net impact is positive.

Through the impact matrix, we can see that the CRM approach proved not to be an effective intervention for poverty reduction economically. It is more related to the sustainability and the ownership of the road development project.

Finally, do road construction projects equally benefit the poor and the non-poor groups? Road interventions are supposed to be designed to give equal opportunity to all community members, especially for poor, ethnic minorities and vulnerable groups.

The rural road projects produced a benefit for accessibility and travel time reduction and other impacts: intensive employment, technical transfers, local economy and community participation. Rural road development using CRM is considered a direct intervention for poverty reduction compared with national and provincial road projects. However, the impact of small community level projects had a slight difference between poor and non-poor groups.

This leads to doubt whether international organizations can properly evaluate the impacts of large-scale infrastructure projects between poor and non-poor at the micro level. Socioeconomic development could bring a larger gap between the poor and non-poor groups. The gap creates a larger gap between the poor and non-poor in the community.

Therefore, the project team must consider equality carefully. Also, rural road projects need collaboration with other sector projects such as income generation or agriculture projects which offer more explicit impacts on poorer groups regarding sustainable poverty alleviation.

Her thesis abstract is copied and posted.

ABSTRACT

The Lao PDR falls within the category of Least Developed Countries. The percentage of the
population living in poverty is the highest in Mekong Sub-Region. The population is only 5.1 million, with 83 percent living in rural areas. Rural accessibility is poor, with half of Lao villages inaccessible during the rainy season. Accessibility and road conditions are related to the both the poverty gap and severity.

Rural road development is one of main sectors in the Government’s Poverty Reduction Strategy Paper. However, the fiscal budget for rural roads is much smaller than that for national and provincial roads and mainly relies on donors. International organizations report various socio-economic impacts of their road intervention; however, existing research rarely quantifies the impact or focuses on the community impact.

This research hypothesizes that road development is a pre-requisite for poverty reduction through the development of an analytical framework.
Consequently, a community survey found that there were gaps between the impacts on poor and non-poor groups even through a community level project such as the Lao-Swedish Road Sector Project-II. The research also found rural road projects require community cohesion, consideration of transport modes for the poor and collaboration with other sector projects.