Community-Based SME For Road Maintenance

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1 Community-Based SME For Road Maintenance Insights from the W.B and IADB-Peruvian Rural Roads maintenance contracts Project & Poverty Reduction Presented by Jacob Greenstein (EGAT)

2 Scope of Presentation Snapshot of project objectives and its focus on poverty; Key strategies/elements: Participation and social inclusion during project preparation and implementation Pro-poor components: micro-enterprises and NMT About beneficiaries and benefits: assessing project impacts. Reflections and lessons for furthering rural accessibility impact on poverty Linkages to other sector and productive activities

3 Project Goal and Objectives Goal: improve road access to social services, markets, and income generating activities with gender equity, to help alleviate rural poverty and raise living standards of rural communities Specific Objectives: integrate poorly accessible areas to markets and economic drivers; generate employment and stimulate further income-earning earning activities in rural areas; strengthen local institutional capacity to manage rural road networks. Phase 1 ( ) US$250 million WB & IADB loans US$90 m each one. Phase 2 ( ) 2006) US$150 million WB& IADB loans US$50 m each one. Phase 3 (2007- ) US$150 million WB& IADB loans US$50 m each one.

4 Focus on poverty: targeting the rural poor 12 departments that rank highest in rural poverty POVERTY LEVEL BY GEOGRAPHIC DOMAIN (%) (Poverty line criterion) Total Northern Central Southern Jungle Highland Highland Highland Jungle TOTAL Total Poor Extremely Poor Not Extremely Poor Non Poor Center Southern Northern Jungle

5 Focus on poverty: emphasis on integration Integrate communities with markets and economic centers through: rehabilitation of networks networks of (gravel) rural roads (12,600 km) and key secondary roads (2,400 km) to complete links; rehabilitation of informal network of non- motorized (NMT) paths (3,000 km) to reach the poorest; followed by 670 maintenance contracts performed by community-based organizations (micro-enterprises).

6 Participation and social inclusion during project design and implementation Consultation & participatory workshops to: assess transport needs, understand poverty links as perceived by communities; confirm with beneficiaries priority of works and commitment to their t maintenance; validate designs and include local solutions; mobilize local government support for road maintenance and institutional building; provide local governments with necessary information about project and their roles; build-up up ownership of key stakeholders on strategies/actions. Critical in, , with incipient decentralization Increasingly through representative entities (governmental, civil society), with decentralization in place since 2002

7 What participation accomplished Better understanding of the transport needs as perceived by communities Woman groups keen in picturing how lack of transport services impacts their day-today lifestyles. Role of project in poverty alleviation and participation of beneficiaries /local governments became a fully shared objective

8 Creating opportunities: micro- enterprises (ME) for road maintenance-2007 Community-based organizations engaged in labor-intensive contracts for maintenance: legal status; contractual relationship, not welfare program! 670 MEs,, 15,000 km of roads & 3000 km of trails

9 Who are the new entrepreneurs? People from communities along road. On average, 36%, years old; and 46%, years old. A balanced education level: 60% primary education; 3% are illiterate. How are the M.E financed? Contract payments, which they allocate to wages (89%), tools, rentals, transportation and a saving investment fund.

10 Creating opportunities: micro- enterprises for road maintenance Outcome 1: Cost effective solution to provide year-round round accessibility on gravel roads: 570 ME maintain 12,900 km ( members for km), at about US$700/km/year Outcome 2: Catalysts for local development by creating entrepreneurial eurial capacity in community: e.g., 27% of M.E. engaged in productive activities bringing new services and stimulating labor markets in their communities; munities; members of micro-enterprises have subsequently become leaders of their communities Outcome 3: Generation of long-term, direct employment for ME members, and indirect for others in community through complementary activities. ities. Focal point for community work to ensure continuous support from community.

11 Reaching the very poor: The NMT component Tracks serve transport needs of most isolated, impoverished communities; and of women in particular for whom most trips may not be along formal road system. Participatory planning essential: only communities able to set priorities among ample number of alternative routes that fulfill similar trip purposes. Villagers appoint members to Road Committee, which undertakes works. In some cases consist of entire community; in others only those chosen or willing to participate.

12 NMT component (2) Assisted by an NGO, Road Committees elect their authorities, approve charter and operation procedures. Authorities assume their responsibility before the community. Traditional community structures demonstrated capacity to assign tasks, wages, and contribute with free labor (faenas). Payments are reinvested in other community initiatives. Villagers value technical, organizational skills. NGOs with credibility among villagers enhance social side effects.

13 Comprehensive Impact Survey completed at end of Phase 1 and at mid-term of Phase 2 74 rural roads and 16 tracks improved under project (+same number control roads) About 370 villages visited; in each, one focus group with 5+ people interviewed per village About 2,000 households interviewed To keep panel data, the number of households reduced to 1,300 in Phase 2 Use method of the double differences for the estimation of impacts Comparison of roads under the program with control group not under the program (but that might have been rehabilitated under other programs)

14 Outcomes Impacts Impacts Measured in First Survey Impact at Sector Indicator Term Hypothesis end Phase I TRANSPORT Travel time Short Decrease High Traffic rate Short Increase High Passenger fares Short-Medium Decrease Moderate-High Freight tariffs Short-Medium Decrease High Road closure Short Decrease Moderate Reliability of public. transp. Short-Medium Increase Moderate-High ACCESS TO Nº School Registered Children Medium-Long Increase Low SERVICES Nº of Health Consultations Short-Medium Increase Moderate Nº of Judicial Causes Short-Medium Increase Null Nº of Police Interventions Short-Medium Increase High PRODUCTIVE Farmed Land Area Medium Increase Low ACTIVITIES Land value Medium Increase Null Productivity Medium Increase Null Livestock ownership Medium Increase Moderate Farm prices Short-Medium Increase High Crop allocation Medium-Long Variation Null Market-oriented produce Medium Increase Null Access to the marketplace Short-Medium Increase Moderate Access to credit Medium-Long Increase Low Nº and income of com. estab. Medium Increase Low Income structure Medium-Long Diversification Low EMPLOYMENT Type of occupation Medium-Long Variation Low Occupation category Medium-Long Variation Null Productive activity Medium-Long Variation Null Agricultural Day's Wage Medium Increase Moderate Labor Force structure Medium-Long Variation Low MIGRATION Nº of migrants Medium-Long Decrease Null Nº of returning migrants Medium-Long Increase Low POVERTY Poverty Levels Medium-Long Decrease Low INSTITUTIONAL Nº of new institutions Short-Medium Increase Moderate NEGATIVE IMPACTS TRANSPORT Nº of traffic accidents Short Increase Low ENVIRONMENT Use of soils Medium Increase Null Use of chemicals Medium Increase Null Deforestation Short-Medium Increase Low High Moderate Low Null

15 Outcomes (Transport) Measured in Second Survey Impact at Sector Indicator Term Hypothesis end Phase I TRANSPORT Travel time Short Decrease High Traffic rate Short Increase High Passenger fares Short-Medium Decrease Moderate-High Freight tariffs Short-Medium Decrease High Road closure Short Decrease Moderate Reliability of public. transp. Short-Medium Increase Moderate-High

16 Impacts (Economic) Measured in Second Survey Impact at Sector Indicator Term Hypothesis end Phase I PRODUCTIVE Farmed Land Area Medium Increase Moderate ACTIVITIES Land value Medium Increase Low Productivity Medium Increase Null Livestock ownership Medium Increase Moderate Farm prices Short-Medium Increase Moderate Crop allocation Medium-Long Variation Null Market-oriented produce Medium Increase Null Access to the marketplace Short-Medium Increase Moderate Access to credit Medium-Long Increase Low Nº and income of com. estab. Medium Increase Low Income structure Medium-Long Diversification Moderate

17 Impacts (Socio-Economic) Measured in Second Survey Impact at Sector Indicator Term Hypothesis end Phase I ACCESS TO Nº School Registered Children Medium-Long Increase Low SERVICES Nº of Health Consultations Short-Medium Increase Moderate Nº of Judicial Causes Short-Medium Increase Moderate Nº of Police Interventions Short-Medium Increase High EMPLOYMENT Type of occupation Medium-Long Variation Low Occupation category Medium-Long Variation Low Productive activity Medium-Long Variation Null Agricultural Day's Wage Medium Increase Moderate Labor Force structure Medium-Long Variation Low MIGRATION Nº of migrants Medium-Long Decrease Null Nº of returning migrants Medium-Long Increase Low POVERTY Poverty Levels Medium-Long Decrease Low INSTITUTIONAL Nº of new institutions Short-Medium Increase Moderate

18 Output Access improved Outcome Reduction travel time/cost Reliability services Impact on living stds. & poverty Access services Access to markets Increase income & productive assets Impact of intervention High Medium Low Base line time 0 3? 8 Basic Access Base line changes due to external factors achieved Economic Recession El Nino (flooding, drought)

19 Expanding opportunities: empowering women Activities rehabilitated roads have enabled women to do (percent distribution) Women responses YES NO N/A Travel to farther places Travel more frequently Travel safe Travel secure (assaults, violations, etc.) Obtain additional income Access new tools, domestic artifacts Access temporary employment Source: Impact Survey, 2000 Women s interactions outside homestead facilitated acquisition of skills, knowledge, and the confidence that such interactions bring about

20 Impacts of availability of infrastructure services number of infrastructure services available three or more two one number of infrastructure services available three or more two only one none increase of % of households active 0% 20% 40% 60% 80% 100% proportion of time devoted salaried non-agriculture non-salaried non-agriculture agricultural activities non-agricultural activities number of worked hours per week only one two three or more % change of rural households' income water + electricity water + electricity + telephone water + electricity + telephone + allweather road number of infrastructure services available with interactions without interactions The whole is greater that the sum of its parts in isolation

21 Impacts of availability of infrastructure services Access as a pre-requisite for higher impacts

22 Reflections: Rural Accessibility & Empowerment Mobility brings opportunity for enhancing peoples capabilities: not only what we do but how we do it matters: build capabilities that transform people into agents of change; community focus good but without loosing perspective of links outside village, network effects ; community participation gives voice to vulnerable groups and expose those who have influence to realities.

23 Rural accessibility more effective if complemented with other interventions An integrated strategy to coordinate complementary actions: confluence of activities produces synergies, enhances probability of sustainable success; poverty is multi-faceted, so coordination around regional/local problems rather than sectors; coordination easier at local level: build-up up local capacities.

24 Elements under Implementation (1) Borrower: buy-in of broader interventions for enhancement of development impacts learning organization Local Development Window (LDW) for strengthening rural communities and households capacity to create and engage in social and economic development opportunities as network of NGOs working in partnership for the implementation of project 34 private projects for about US$2.8 million 110 public projects for about US$3.6 million

25 Elements under Implementation (2) Gradual Gradual development of Provincial (Municipal) Road Agencies 38 provincial road institutes created and responsible for road management within their jurisdiction (out of about 100 provinces where the project is operating) Engendering actions: (a) women participation and training of stakeholders; (b) as members of micro-enterprises and in LDW women participation in micro-enterprises increased from 5% in cohort of Phase 1 to 23% in cohort of Phase 2 Phase Phase 3: multi-sector infrastructure project $ 50M IADB, $ 50 M WB & $50 GOPE

26 Thank you

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