Principal CPRE recommendations

Strategic

The CPRE broadly confirmed the validity of IFAD strategy in Vietnam with its clear emphasis on targeting the poorest of the poor through the development of participatory processes and enabling institutions. Decentralisation and empowerment, rural financing, commercialisation and marketing, gender mainstreaming, and protection of the environment have emerged during the CPRE as key policy issues that require joint consideration by IFAD and the Government. Within the Policy Dialogue, the Government will be requested to

Consider:

• Transferring to communities the responsibility for a number of services including community development projects and primary health and sanitary care i.e. schools, heath centres, wells and domestic water, etc. to ensure more efficient use of resources, reduce government budgets (apart from operation and maintenance costs communities can contribute with labour and local materials to investment costs) and promote ownership, empowerment, transparency, accountability and sustainability.
• Giving greater delegation of financial powers to Commune Development Boards (CDBs) (like issue of contracts) with respect to village level micro-schemes and handing over all implementation responsibility for project components to the activity managers of the technical departments mainly at the commune level.
• Promoting the development of fee-based and self-financing extension (plant and livestock) nurseries, animal breeding, clinical and other field veterinary and ancillary services (government maintains its regulatory, control and supervisory animal and public health functions), at the commune level. Part of the investment could be made as loans to the Commune Workers as it is the case in Tuyen Quang where Commune Veterinary Workers own refrigerators, motorcycles and have stocks of medicine.

• Abandoning below-market interest rates, which prevail in much of the formal credit operations. Very poor households would still need a transparent programme for a targeted safety net support for meeting their consumption and production needs as part of a social fund type package.
• Improving access of small poor farmers and small entrepreneurs to the financial market through the development of rural finance institutions on the model of village-based Savings and Credit Associations (SCAs) promoted by IFAD in several other countries for servicing the financial inter-mediation needs of the poorer income groups through the mobilisation of savings. Strengthening of these institutions would involve appropriate incentives, accompanying measures in the field of training, institution building and development of the appropriate legislative and regulatory framework.
• Reorienting public investments to address effectively those factors that limit the opportunities for the poor to participate in the benefits of market reforms, including lack of physical and institutional infrastructure (roads, credit, land and water), isolation from trade and market network, and information on price and market potentials.
• Issuing land and housing titles to the names of women or in the joint names of men and women; (ii) encouraging increased representation and greater influence of women in public institutions; and (iii) ensuring that ethnic women have equal and adequate access to education and health services.
• Modernising its environmental legislation, formulating environmental standards and controls and developing a national environmental action plan to arrest deforestation, further soil erosion and degradation, and preserve land productivity. (ii) Enhancing efforts to develop participatory forest protection models including formation of participatory soil conservation associations and issue forest protection contracts to farmers.

Project design

Future projects should include in their design provisions for:

• Empowerment and participatory features such as the creation of community-based organisations, resource management and co-management committees, forest protection models and soil conservation associations, user groups around specific project activities, etc. to promote ownership, transparency, accountability and bottom-up approach to development. Enhanced community mobilisation may be facilitated through the coalition with experienced mass organisations and international NGOs.
• Community-programmes to be carried out on the basis of flexible Community Development Funds to allow for the community expressed needs, as identified by Participatory Rural Appraisals, to be met.
• Strengthening the demand-driven participatory research and extension system through adequate investments in training of staff and essential infrastructure particularly roads, development of market initiatives including information on prices and market potentials and requirements, improved access to micro-credit at market interest rates, and clear land-use rights to stimulate investment and uptake of improved technology.
• Development of a comprehensive livestock strategy to cater for both feed resources and number and type of livestock used. Due emphasis to small stock, particularly smallholder poultry production.
• Development of veterinary infrastructure to ensure adequate outreach and preventive vaccinations and secure investments in livestock.
• Gender-focused components, including micro-credit, drudgery reduction, and access to fuel, and (ii) mainstreaming of gender concerns into all components.
• Assistance to farmer groups, associations or members of groups for establishment via credit of (i) packaging plants and co-operative marketing of agricultural produce or units for the co-operative purchase of agricultural inputs, and (ii) assembly points for raw milk for purchase cooling tanks and quality testing equipment so that milk could be delivered to processing plants.
• Assistance to entrepreneurs via credit for establishing and initial operation of private small and medium scale processing plants for agricultural produce or milk processing plants.
• Exit plan to cater for the consolidation and maintenance of achievements during the post-project period.

Operational

Ongoing and future projects should ensure that:

• Community-based organisations and activity user groups receive significant amount of support and training including dialogue and communication amongst extension staff, credit delivery institutions (Banks), target beneficiaries and other involved institutions.
• PRAs are conducted separately for women and men and pay greater attention to the participation of the poorest in separate groups, the analysis of causes of poverty, and to the development of village plans including food security plans for poor households.
• Communes are involved in periodic participatory monitoring and impact assessment.
• The rules of the activity user groups regarding membership fees, user charges and contributions are designed in such a way that they are pro-poor.
• The research and extension service is strengthened through training of staff and adequate investments in essential infrastructure. Farmer groups or members of groups receive training in simple bookkeeping, home economics, nutrition, processing and marketing skills, etc.
• VBARD and VBP improve the lending programmes to smallholders to support technical diversification and alleviate poverty. Link the implementation of extension messages for improved agricultural and livestock practices directly to a credit package tailor-made to suit the needs and capacity of smallholders. Veterinary Health Workers could work closely with the micro-credit programmes.
• Apart from the purchase of buffaloes and pigs, credit is used for other cash and income generating activities in production and services or where the poor have a comparative advantage and for which a market exists such as cash crops and small agricultural equipment, petty trade, tailoring and knitting, etc. particularly in the uplands where there is widespread unemployment and very low income.
• Gender concerns be included in all stakeholder training and capacity building programmes, including integration of women's groups into regular extension programmes, adult literacy and education, Village Health Workers, nutrition and other vocational training programmes, etc.

Introduction

Background. To date, IFAD has funded four area-development projects in Viet Nam: the Participatory Resource Management Project (PRMP) in Tuyen Quang Province; Agricultural Resources Conservation and Development Project (ARCDP) in Quang Binh Province; Ha Giang Development Project for Ethnic Minorities (HGDPEM); and Ha Tinh Rural Development Project (HTRDP). Total IFAD lending in Viet Nam amounts to USD 60.7 million. The United Nations Office for Project Services (UNOPS) is the cooperating institution for all four projects.

IFAD strategy in Viet Nam. The Fund's strategy in Viet Nam is to support the Government's poverty alleviation drive and programmes for improving the living conditions and welfare of rural people. Its assistance is particularly directed to the Northern Uplands, North Central Highlands and Central Highlands Regions (identified as the poorest areas) and ethnic minorities, upland farmers and women-headed households (identified as the most vulnerable target groups). IFAD's strategy focuses on: (i) building local institutional and managerial capacities; (ii) enhancing the participation of local stakeholders in project design and implementation; (iii) giving priority to rural employment and income-generating activities; (iv) investing in the construction and rehabilitation of rural infrastructure; (v) providing support to ethnic minorities while protecting their cultural identity; (vi) supporting the rehabilitation and diversification of agriculture in areas hitherto neglected or prone to natural disasters; (vii) directing the Fund's resources to the poorest provinces; and (viii) helping the country to develop sustainable financial mechanisms for lending to the poor.

Project design and objectives. The primary objectives of all the IFAD-supported projects are to improve the incomes and living standards of poor rural households and to increase their participation in the development process. Project activities have focused on agricultural production; rehabilitation of essential infrastructure, such as roads, bridges and irrigation schemes; environmental conservation and management; agricultural extension; animal health services; aquaculture development; the provision of microfinance; and support for income diversification. Health and education activities are also being undertaken under HGDPEM.

Implementation. Projects have been implemented under the overall responsibility of provincial people's committees (PPCs). The implementation arrangement envisaged for PRMP differed somewhat from that of the other three IFAD-financed projects in that a project management unit (PMU) was established for this purpose. The PMU was to be supported by a working group at the provincial level, comprising representatives of various provincial technical departments. In the other three projects, project coordination units (PCUs) were created to coordinate implementation at the provincial level. Actual implementation is the responsibility of provincial technical departments, which operate through district-level structures. However, during implementation, IFAD altered the management structure of the PRMP by transferring implementation responsibility from the PMU to provincial implementation agencies.

Country programme review and evaluation (CPRE). In close consultation with the Government, the Asia and the Pacific Division (PI) and the Office of Evaluation and Studies (OE) of IFAD undertook a joint CPRE in Viet Nam in 2000. The aim was to: (i) develop a series of lessons learned and recommendations for improving IFAD's present and future programmes in the country; (ii) identify policy issues to be raised with the Government for its consideration; and (iii) provide inputs for reviewing, as appropriate, IFAD's country strategic opportunities paper (COSOP) for Viet Nam.

The CPRE was conducted in a highly participatory manner, in line with the Fund's new approach to evaluation, and was the first PI/OE exercise of this nature. The rationale for the joint approach was based on the consideration that since all four projects financed by IFAD in the country were still ongoing, the undertaking of a CPRE by OE alone would not appropriately address some of the implementation-oriented issues requiring immediate follow-up to ensure better execution, impact and sustainability of activities. In short, a joint CPRE was deemed more suitable as it would not only draw lessons from experience to provide inputs for updating the COSOP and improve the design and performance of future activities, but also support the streamlining and amelioration of current operations.

The exercise was planned and implemented to promote maximum local participation and ownership. To start off the process, a brief reconnaissance mission was undertaken to Viet Nam in May 2000 to assess the expectations and priorities of the counterparts vis-à-vis the CPRE. That was followed by the commissioning (in June 2000) of internal self-evaluation implementation assessment studies by each project, offering project staff the opportunity to express their perceptions about the opportunities and constraints of the Fund's intervention. The results of these studies were discussed with the CPRE mission during a stakeholders' workshop organized at the outset of the mission's fieldwork (July 2000). The World Bank's recently established Global Distance Learning Network was utilized to organize a video conference (Rome-Hanoi) in mid-September 2000 to provide interim feedback to stakeholders and discuss the first draft CPRE report and lessons learned. The video conference brought together in Hanoi some 25 persons from the four provinces, including representatives of mass organizations (Viet Nam Women's Union (VWU) and farmers' associations), government staff, provincial district authorities, other donors, cofinanciers and project staff. It also provided a unique opportunity for IFAD to listen to the comments and suggestions of a range of stakeholders prior to finalizing the CPRE report.

The Fund's New Approach to Evaluation demands that an in-country workshop be held at the end of each Country Programme Evaluation in order to finalise an ‘agreement at completion point' (ACP)¹. The formulation of an ACP would therefore mark the completion of the Vietnam CPRE exercise. Therefore, a CPRE workshop was held in Hanoi on 13 March 2001. The principal objective of the workshop was to engage in a discussion with a broad range of IFAD partners in Vietnam so as to derive an understanding on the key lessons learned and recommendations from the CPRE. The Workshop was also a forum for exchange of recent experiences among the four IFAD-supported projects in Vietnam, the Government of Vietnam, as well as various other partner organisations. The workshop was held at the Ministry of Planning and Investment (MPI) and approximately forty people participated in the session, including representatives of the four IFAD-supported projects, several ministries from the Government of Vietnam, Provincial Peoples Committee, Vietnam Bank for the Poor, Farmers' Association, Vietnam Women's Union and others.

The methodological structure of the workshop took the form of plenary presentations and discussions, as well as deliberations in two working groups. IFAD had requested the Asian Institute of Technology (AIT)² to facilitate the workshop discussions, and to prepare a summary of the day's main observations and suggestions. Full interpretation (English – Vietnamese – English) was necessary throughout the plenary session as well as in the working groups. The background documentation had been translated into Vietnamese by the Government, and distributed before the session together with the English version. In this regard, the workshop revealed the importance of cross-checking the quality of documents, as a number of misunderstandings on concepts and content arose during the discussions due to inaccurate translation.

There was a general consensus on the five lessons learned and recommendations proposed in the draft ACP. However, the ACP was revised to include the productive set of comments generated during the workshop. The five lessons learned and related recommendations concern the following topics:

• Rural Financial Services
• Gender Mainstreaming
• Decentralisation and Bottom-up Development
• Forestry and Environment Protection
• Participatory Adaptive Research and Extension

Each lesson learned also includes a short personal case story captured by the CPRE mission. These provide the reader with an opportunity to benefit from the perceptions and opinions of the beneficiaries about the interventions supported by the Fund.

The CPRE's ACP contains three main recommendations that have a wider policy implication and need to be addressed to ensure more efficient and effective poverty reduction and rural development efforts. The first policy recommendation concerns the elimination of the subsidisation of the rural financial sector. The CPRE concluded that below-market interest rates and related subsidies are not financially sustainable, nor do they provide for an operationally effective means of reaching ethnic minorities, women and other most underprivileged people. Concurrently, the CPRE recommends that the government extend operations of the Vietnam Bank for Agriculture and Rural Development and of the Vietnam Bank for the Poor in support of the poorest people in rural areas. The second policy recommendation concerns the need to issue land titles in the names of both husband and wife. This will contribute to the empowerment of women and give them an incentive to make greater investments on their land and engage more actively in development initiatives, such as those related to micro-enterprise development or other income generating activities. The CPRE also recommends that the government promote increased representation of women at all levels in key decision-making positions in rural development public institutions. The third policy issue relates to the need for the government to delegate greater financial authority to provincial, district and commune levels for rural development programme planning, implementation and disbursements. This will not only enhance efficiency, but also increase ownership, transparency and accountability at the lowest levels. There are also other policy recommendations, but these are considered the most pressing ones.

Implementation performance

Financial matters. In all four projects, delays in disbursement have been common, resulting occasionally in a shortage of funds to meet payments for goods and services and thereby delaying implementation. The main cause of the delays are the complex and lengthy disbursement procedures.

Infrastructure. Progress in the construction of roads and small-scale irrigation schemes has been good, despite constraints attributed to the remote location of construction sites and cumbersome administrative and procurement processes. In PRMP, supervision and review of construction are contracted out. District implementation units and commune technical workers are responsible for the supervision and assessment of construction in Quang Binh and Ha Giang provinces. In general, there have been problems with cumbersome bidding procedures and with the overloading of technical units.

Crops and extension. The PRMP was the first province-wide project to use the participatory rural appraisal (PRA) tool to determine the appropriate contents of extension activities in each commune. The same approach was later extended to the projects in Quang Binh, Ha Giang and Ha Tinh. Previously, however, top-down ‘technology transfer' programmes dominated most extension activities and there was little funding for adaptive research.

Livestock. In PRMP, the Mong Cai pig breeding programme has been particularly successful, with 1 264 households provided with breeding animals; and the training and equipping of commune animal health auxiliaries has meant much wider coverage of preventive veterinary vaccinations. A poultry model for poor households has been successfully promoted by the provincial extension service, but more needs to be done in maintaining the on-farm, pro-poor and participatory perspectives of the model. In Ha Giang, the increasing number of cattle and pigs has put extra pressure on fragile environments. None of the reports on implementation in Ha Giang demonstrate any clear understanding of the integrated nature of the problem or address the related question of fuel supply. The main achievement in the Quang Binh livestock sector has been the establishment of two artificial insemination stations and one pig breeding station. A team from Hue University of Agriculture and Forestry has assessed the status of livestock at the household level and made a number of recommendations with regard to on-farm trials and demonstrations.

Aquaculture. In Quang Binh, five hatcheries for shrimp and fish have been rehabilitated for local production of juveniles and fingerlings, with 1999 production meeting 70% of demand in the province. Ten tiger prawn model demonstrations and ten for fish cage-rearing have been implemented, with training programmes for key staff and beneficiaries in 75 communes.

Forestry. The forestry component of HGDPEM aims to support existing forest programmes in critical watershed areas, principally by developing participatory protection models and the issuance of forest protection contracts for a planned 20 000 ha of critical forests. Main activities to date have been the procurement of vehicles and equipment, staff training and the preparation of an environmental impact assessment study. Protection contracts for 11 000 ha of forest have been issued, and 200 ha of new forest have been planted, the latter activity having been added in 1999. Under the sand-dune fixation component of ARCDP, 2 700 ha of casuarina have been planted in 12 southern communes in the dune area, where all planting and maintenance were carried out by farmers. About 70% of local farmers, most of them women, benefited from employment opportunities. Seedlings are being produced by the farmers themselves, and a self-management board for maintenance and protection has been set up in each commune.

Credit. All credit programmes are implemented with the close support of the VWU, although the actual flow of credit is through the Viet Nam Bank for Agriculture (VBA) or the Viet Nam Bank for the Poor (VBP). The credit programme aims to respond to the credit needs of rural people and to build up the capacities of different institutions involved in the programme. However, microcredit activities have not been sufficiently successful, with the exception of the PRMP in Tuyen Quang, where the credit component started before the operation of the Government's preferential credits through VBP and VBA. The VBP (VBA branch) that implements the government-sponsored credit programmes has not been very successful in reaching the poor or in developing economically viable programmes with a significant and sustainable impact on the poor. Some of the main reasons are: frequently the targeting procedures have been poorly applied through mass organizations, particularly the VWU; poor planning and lack of technical support for activities financed through loan funds; and inadequate institutional capacity to sustain microfinance operations for the poorest.

In Quang Binh, the VBA is reluctant to channel credit to the poor, in particular to those without land titles. In Ha Giang, administrative problems initially delayed the flow of credit, but the VBA has now agreed to channel credit from its own resources. Even in Tuyen Quang, where the flow of credit to the poor from VBA has been good, group capital is not enough to meet short-term consumption needs or the medium-term production and consumption credit needs of members on a sustained basis. Very few group members have obtained repeat loans either from the groups or from the banks. Finally, institutional capacity strengthening with regard to credit has been achieved only partially in all four projects, mainly due to delays in technical assistance.

Decentralization. Provincial and district authorities have budgetary and administrative responsibilities, but communes are not directly included in the consolidated budget and almost all public services are delivered through the formal government administrative system. The Central Government negotiates with each province annually to determine levels of expenditure and subsequent revenue transfers for poor provinces. District and commune revenues are also based on approved expenditure, but there is no standard system for assigning revenues to districts and communes. For delivery of public services at the commune level, revenue allocations reaching the communes are barely adequate to meet their administrative costs. Local contributions, with the help of national programmes, must finance virtually all non-salary recurrent costs of public services, such as agricultural extension, animal health services, education and health. Project provinces are practising certain innovative approaches to decentralization, with mass organizations forming an important link between the local people and implementing agencies through the formation of user groups and self-help groups (e.g. for irrigation management, drinking water management, forestry protection, health and education, etc.). However, participatory decision-making does not sufficiently involve key stakeholders, such as poor farmers and women.

Impact and sustainability

Poverty. As all four projects are still operational, any assessment of impact would be premature. However, the CPRE was able to obtain some indication of expected impact. For instance, the second round of PRA in Tuyen Quang indicates that in 51 selected communes the number of better-off households has increased by 10.5% and poor and very poor households have decreased by 12%. However, microlevel analysis suggests that the very poor derived less benefit from the project than the poor, particularly with regard to the irrigation and infrastructure components. A participatory evaluation in Le Thuy district of Quang Binh revealed a 10% decline in poverty as a result of the rice-regeneration interventions over a period of two years, but the impact was higher among those with larger landholdings and has excluded the handful of very poor landless people. In the sand dune area, employment in project activities has helped the poor to increase their livestock base, meet agricultural credit requirements and repair their houses. Monetary gains to the poor have also been noted in the case of forest protection activities. Incremental income has largely been invested in livestock, particularly in pigs. Better access to natural resources with the help of rural infrastructure built by the project is contributing to diversification of rural production and narrowing the gap between the poor and the well-off in some localities. However, the sustainability of the favourable poverty impact of the projects depends both on the sustained flow of credit to the poor and on social security measures being put in place to help the poor cope with contingencies like ill health, death of a family member and disaster. These mechanisms need to be strengthened in all projects. Finally, poverty alleviation will be sustainable only when the poor are represented in institutions at the national level that they can use to assert their interests and to organise access to resources.

Targeting. The targeting of the provinces has been good. More than 12% of the poorest communes, as identified by the Government's Hunger Eradication and Poverty Reduction (HEPR) programme, fall within the four project provinces. Within provinces, the targeting of poor districts has been fairly good in Tuyen Quang and Ha Giang, but needs better focus in the poorest districts of Quang Binh. In Ha Giang, the targeting of poorest communes has been most effective, not just because there is a greater number of poor communes but also because of the conscious effort made to reach them. In Tuyen Quang, targeting of poorest communes is strong with the exception of animal husbandry and irrigation. In Quang Binh, such targeting needs to be strengthened in all programmes, in particular micro-credit, irrigation and animal husbandry. In Tuyen Quang, only members of poor and very poor households can derive benefits from the credit programme; in Quang Binh, considerable leakage to non-poor was noted.

Beneficiary participation. While different groups living in poverty are consulted during project desigh, there is still little active participation of the poor in identifying needs and shaping project design. This is particularly true for the irrigation and road components, which are often pre-targeted. IFAD's main contribution has been the promotion of PRA as a tool for operational planning, for which the multi-component PRA conducted in Tuyen Quang proved more effective than the sectoral PRA used in other projects. Primarily, PRA methodology was used to determine the content of research and extension priorities in instituting a problem-solving and demand-driven approach to agricultural extension. PRA methodology was also employed for wealth ranking in the project area as a targeting instrument, whereby poorest households are identified by the villagers themselves through classifying households into four or five categories based on their own criteria. Integrated participatory evaluation exercises have been institutionalised in Tuyen Quang, with monitoring of poverty status and village work plans. A variety of self-help groups have been formed which are involved in planning and managing micro-irrigation and drinking water schemes, access to credit, road programmes, sand dune fixation, forest protection and agricultural extension activities. Water user groups function successfully and the sense of ownership by beneficiaries is real. There must be self-reliant and well-trained labour crews, or in their absence device an alternative arrangement, to operate and maintain project schemes to ensure post-project continuation of benefits. Participatory processes can be sustained beyond the project period only if they are institutionalised within existing structures.

Gender mainstreaming. An explicit commitment to address gender-specific causes of women's poverty and to mainstream gender concerns is absent from project objectives. However, the key role of women in agriculture, livestock and rural marketing is recognized, and gender concerns are mainstreamed to some extent in the credit/income diversification components, especially in the case of Ha Tinh. The degree of access of poor women to project resources has been higher for credit and income diversification, followed by agricultural extension and sand-dune fixation, and lower for other programmes. A broader implementation issue is the gender and ethnic composition of staff and workers. Women's representation in the PPC/PCU ranges from 18% in Ha Giang to 26% in Quang Binh, with more representation in administration and accounting than in project management. In all projects, representation is lower at the district level than it is at provincial level. The Tuyen Quang project has been the most successful in terms of expanding the independent asset base of poor women, increasing their status within the family and strengthening their ability to cope with poverty through the credit and savings programme. Joint titles to land and houses are particularly important for the sustainability of gender impact, and this needs to be pursued at the central government level.

Financial Services. The credit programme faced serious structural and procedural problems that restricted its impact on project beneficiaries significantly. The cumbersome processing procedures, the high cost of making small loans, the collateral requirements and the perceived high risks of small loans inhibited the involvement of commercial or state banks in lending to poor farmers at a large scale. Even in Tuyen Quang, where the flow of credit to the poor from VBARD has been good, the group capital was not enough to meet the short term or medium term consumption/production credit needs of their members on a sustained basis. Attempts to satisfy more households have resulted in a thin spread of credit and only very few beneficiaries have been able to obtain a second loan. Despite high repayment rates, there was very little mobilisation of savings and very little in the diversification of investments, most credit being used to purchase pigs and/or buffaloes. Over 70 percent of rural households depend on informal sources for credit, paying interest rates that are two to three times higher than those charged by formal financial institutions. Apart from limited presence of formal banking institutions in rural areas, inability to offer collateral explains limited access to formal finance by the rural poor. There is a widely acknowledged need to build up a basic structure of rural financial services responsive to needs of local communities.

Participatory adaptive research and extension. Based on the use of participatory rural appraisal (PRA) and training of extension staff, the IFAD supported project in the Tuyen Quang province developed the most comprehensive extension system in the country that provided a model for other provinces. The other projects are pursuing the PRA methodology to give concrete research and extension agenda to extension services that are still in the process of being organised. Extension activities have contributed to increased agricultural production and forest cover with more forest areas remaining intact. In Tuyen Quang, average yields of maize and paddy increased from 2.15 to 3.01 t/ha and from 3.12 to 4.2 t/ha, respectively. The total area under cultivation has also increased, notably for sugar cane (1 185 to 7 219 ha) and fruit trees (965 to 3 266 ha). Improved veterinary outreach has reduced mortality in pigs and poultry and led to improved growth rates. The 62 000 loans sanctioned by VBP in Tuyen Quang are also likely to have supported an increase in animal numbers, especially pigs. Under ARCDP,close attention is being given to appropriate and efficient feeding of shrimps, thus limiting the build-up of unwanted nutrients in the ecosystem. However, only better-off households have the necessary capital and labour for shrimp culture. Fish culture, in contrast, offers opportunities and benefits for all farming households and complements traditional agricultural activities. Strengthening of the demand-driven research and extension system requires: additional investments in training of staff and essential infrastructure, improved access to micro-credit at market related interest rates, and provide clear land-use rights to stimulate investment and uptake of improved technology.

Environment. There is no forestry component as such in the Tuyen Quang project, but its work complemented and aided the process of re-greening by contributing to food security and thus reducing pressure on the forests. In Ha Giang, conditions in the mountainous regions of the east and northwest require urgent attention on the part of both the Government and international donors. However, the ambitious afforestation targets, to which part of project activity has been attached, mean that it is more important to be seen to be expanding the area of forest (in whatever district) than to address the crux of the matter i.e. the acute shortage of combustible material. In Quang Binh, the destruction of the young casuarina plantations in the sand dune areas was caused mainly by de-branching for fuelwood. Such is the shortage of combustible material in the coastal region that unless alternative sources of cheap fuel are made available, the depredations will certainly continue in all areas except where existing trees are understood by local villagers to be performing a vital role as a physical barrier against sand. Thus, for the new plantations to survive, it is imperative to address, as a matter of urgency, the fuel situation. The anticipated impact of project road components has generally been achieved, with focus on inter-commune roads where improvements have a high economic return.

Capacity building. The capacity, expertise and awareness of project staff have discernibly improved in Tuyen Quang and Quang Binh during project implementation. In Ha Giang, there is now a better understanding thanks to intensive training in participatory approaches, monitoring and evaluation (M&E) and management of rural development projects, and also to the presence of international and national advisers. The quality of planning, implementation, coordination, supervision and reporting has improved considerably and there is a better appreciation of the need for transparent procurement procedures and record-keeping for foreign assistance projects. The selection of village health workers and commune veterinary workers for HGDPEM during 1999/2000 followed a much more rigorous selection procedure and the new staff proved to be excellent.

Project design. The IFAD-supported projects are generally cost-effective, the technical designs are appropriate and additional unsustainable institutional layers have not been created. There is need for the implementing agencies to elaborate detailed project exit plans incorporating expected financial and human resource allocations for operations and maintenance for the post-project period. In future, specific provisions for exit plans should be included in the project design.

Lessons learned

Targeting. Unless there is a clear focus and provisions in project design to working towards household-level food and nutritional security, the poorest may derive less benefit from the projects than the poor in general. For poverty alleviation, rural development projects should aim to improve the livelihood prospects and living standards of targeted groups of poor people through social mobilisation, improving access to productive resources, services, and markets needs. The ultimate objective should be sustainable livelihoods rather than optimising land-based production in a short-term time horizon. Targeting instrumentalities need to be conceived as being part of an "inclusive" approach to fostering of local institutions. The poor clientele can not be reached through narrowly targeted interventions which view such households as "enclaves" rather than as an integral part of rural communities. In the context of Vietnam, poverty eradication strategies can best succeed with the full involvement of the Peoples' Committees and Peoples' Councils. Within each province, the focus should be on the HEPR districts and communes, and the poorest villages and households should be identified through a combination of Ministry of Labour, Invalids and Social Affairs (MOLISA) and PRA criteria. Due attention should be given to women headed households and young farming families.

Social Mobilisation and Capacity Building. The IFAD supported projects have been particularly successful in involving the poor communities though PRA methodology to determine the content of research and extension priorities and in classifying households into wealth categories that provided the main targeting instrument in the project areas. The Projects have also been successful in forming a variety of self-help groups, which apart from promoting efficient and sustainable management of resources have created opportunities for the poor to participate in decision making processes. The establishment of Community Development Funds to meet the communities' expressed needs gives flexibility in the area of poverty reduction and nutritional security, empowers local communities and provides an effective instrument for decentralised allocation and participatory control mechanism. A very important lesson learned is that unless mechanisms for the participation of the poor are in place at the project appraisal and design stage, participation will be merely token in nature. Similarly, PRA can be an important tool for strengthening the participation of the poor in the planning, monitoring and evaluation of poverty alleviation projects only when capacities, will and resources are made available and Government institutionalises PRA methods within the overall provincial, district and commune level planning. Given that the most vulnerable groups do not as yet occupy decision making positions in existing organisations, it is important to continue the present strategy of empowerment through the creation of self-help groups around specific sectors. However, it is important that both the traditional and new forms of popular organisation come together through the VDBs and CDBs for participatory planning, monitoring and evaluation.

Participatory research and extension. The successful integration of agro-forestry and livestock into cropping systems in the uplands by the participatory extension service has validated the relevance of both the PRA methodology and multi-disciplinary and farming systems approach to developing sustainable livelihoods, rather than optimising land-based production in the short-term. Experience shows that the extension system, backed by a system of applied and adaptive research, has been effective in generating appropriate technical packages and messages and in interacting closely with farm households that provide to both researchers and extension workers local knowledge and feedback on the effectiveness of the innovations and technologies being tested. This is highly important in orienting research and extension to development activities that are relevant and acceptable to people living at the grass-roots level. It is recommended that Projects press for the strengthening of the demand-driven participatory research and extension system through additional investments in training of staff and essential infrastructure, improved access to micro-credit at market related interest rates, and clear land-use rights to stimulate investment and uptake of improved technology. The improvement of traditional feeding systems is an area that deserves more attention, with greater focus on local feed resources and collaboration over extended periods with research institutions. There is need for the development of a comprehensive livestock strategy to cater for both feed resources and number and type of livestock used.

Gender mainstreaming. Gender mainstreaming is essential if poor women's food and nutritional security is to be addressed by IFAD in a sustainable manner. Gender concerns should be explicitly woven into all aspects of IFAD's strategy, and the gender-specific causes of women's poverty be identified. A two-stage strategy may be considered for mainstreaming gender in the Viet Nam context: (i) the formulation of gender-focused activities; and (ii) mainstreaming of gender concerns into all components including the need that all land and housing titles to be issued in the joint names of men and women. Experience shows that in households where land and house titles are held jointly, the role, decision-making capacity and overall well-being and status of women is much better.

Financial Services. Rural poor communities in Vietnam have accepted widely the savings and credit concept and have overcome the barriers of working jointly in-groups of trust for mutual financial benefit. The social pressure as a guarantee for small loans is proven to be so strong that it has not only made it possible for poor households to access credit but also provided collateral and, practically, a hundred percent loan recovery. However, there seems to be a certain lack of clarity in Vietnam's approach to micro-credit. Credit to the poor is conceived as a kind of social safety net and is provided at subsidised rates of interest. Experience has shown that cheaper micro-credit runs the risk of being rationed and availed of largely by clients with easy access to VBARD and VBP branch network that does not always extend into remote areas. The solution for such remote areas lies in credit retailing by financial intermediaries, but below market interest rates do not provide the necessary spread margin to such intermediaries to cover even their operating costs, much less the costs of social intermediation, such as group formation and training of beneficiaries. Thus, subsidised credit effectively reduces, rather than enhancing the access of the poor to micro-credit. It implies also low deposit rates that discourage savings mobilisation and promotion of sustainable rural financial services. The financial autonomy of micro-finance organisations and financial intermediaries, i.e. their independence from external subsidies, constitutes a key ingredient for broad-based poverty reduction. It is recommended that Government improves access of small poor farmers and small entrepreneurs to the financial market. Emphasis should be given to the promotion of rural finance institutions on the model of village-based Savings and Credit Associations (SCAs) for servicing the financial inter-mediation needs of the poorer income groups through the mobilisation of savings. Strengthening of these institutions should involve appropriate incentives, accompanying measures in the field of training, institution building and development of the appropriate legislative and regulatory framework. It is also recommended that apart from the purchase of buffaloes and pigs, projects promote the use of credit for other cash and income generating activities in production and services or where the poor have a comparative advantage and for which a market exists such as cash crops and small agricultural equipment, petty trade, tailoring, knitting, etc. particularly in the uplands where there is widespread unemployment and very low income.

Infrastructure. The rehabilitation/construction of roads and irrigation schemes had a positive impact on the development of both poor households and rural communities. Lack of inter-commune and district roads would affect provision of health services linked to medical centres, inaccessibility of communities to centres of education and an overall reduction of the exchange economy's performance due to reduce access to traded commodities. However, improvement of intra-commune or intra-village roads without prior improvement of inter-commune or district roads is uneconomic. Main roads should be constructed/rehabilitated by Government and their maintenance be institutionally guaranteed and be carried out by the central or provincial authorities Targets and site selection for infrastructure development activities should be based on the findings of PRAs conducted periodically during implementation rather than pre-targeted as defined during the project design process. Greater resources and efforts need to be expended in social mobilisation and user group formation to support infrastructure construction, supervision and maintenance.

Forestry and environment protection. Efforts in recent decades to use tree planting to counter the intrusion of sand dunes into areas of cultivated land in Quang Binh have met with little success because young trees have been destroyed primarily by de-branching for fuel wood. A lesson learned is that for as long as there is such an acute shortage of fuel, the depredations will continue in all areas except where existing trees are understood by the local villagers to be performing a vital role as a physical barrier against the sand or in the creation of micro-climatic enclaves. Guided by experience, Casuarina saplings under the IFAD supported project have been planted in a partnership arrangement with the communities on the basis of a plan aiming to enable the emergence of micro-climates that would allow both cultivation and settlement In Ha Giang, urgent measures are required to reverse the deforestation of the upper slopes in the highland areas, where the pernicious cycle of deforestation, flash floods and drought is already far advanced. It is recommended that the Government enhances its efforts to develop participatory forest protection models including formation of participatory soil conservation associations and issue forest protection contracts to farmers. Specific provisions for such participatory forest protection models and soil conservation associations should be included in the design of all future development interventions. Incentives may be necessary for reforestation activities, against the direct cost of the accelerating cycle of flooding and drought in the region. It is also recommended that the Government develops a new or modernises (with the support of IFAD) its environmental legislation, formulates environmental standards and controls and develops a national environmental action plan to arrest deforestation, further soil erosion and degradation, and preserve land productivity for the benefit of both present and future generations.

Project management. For reasons of efficient use of limited trained manpower and financial resources, and for the sustainability of project services in the post project era, the use of in-line Government institutions for project implementation has proved valid and sound. The capacity, expertise and awareness of project staff have discernibly improved with time in all projects. For most technical training, local institutions, such as Hue University for ARCD and HTRDP and Hanoi University for HGDPEM and PRMP, can provide a team of experts in various disciplines. Also, the staff of on-going projects can be used for the training of trainers in PRA, social mobilisation, management, and monitoring and evaluation for other projects. It is recommended that the Government (i) promotes effective co-ordination among the donors involved to ensure streamlined planning and operations, and (ii) develops a common framework for national staff and consultant salaries, incentives and related allowances. It is also recommended that projects develop more focused M&E indicators for impact assessment and introduce further improvements in the feedback mechanism from communes and villages to the district, provincial and central levels. A pressing challenge for IFAD is the need to assist the Government to prepare project exit plans to cater for the consolidation and maintenance of achievements during the post-project period. In future, specific provisions for exit plans should be included in the project design.

Decentralisation and project implementation. IFAD's programme in Viet Nam has contributed to changing attitudes and approaches to development planning, budgeting, implementation and monitoring. Decentralisation has been a key feature introduced in all four IFAD-funded projects. Experience accumulated to date illustrates that better results are achieved when implementation responsibility is handed over to the operational level using activity managers of the technical departments, mainly at the commune level. This results in ownership, commitment and accountability at the lowest levels. As a general rule, greater autonomy in terms of planning and financial management is desirable at the district and commune levels to facilitate and improve the development process.

From area-based rural development projects to funding institutions. A participatory approach was adopted during project formulation that culminated into designing integrated, area-based, rural development projects with a strategic focus towards institutional development. By creating institutional structures and targeting concurrently social and technical components, the IFAD supported projects have validated the modern view that in poverty alleviation the major problem is not the scarcity of resources but access to resources. In addition to asset formation, supply of inputs, provision of credit, development of infrastructure, extension of forests and protection of the environment, tangible benefits included formation and strengthening the capacity of community-based organisations as a medium for self-mobilisation for development purposes, and emphasis on decentralisation and bottom-up approach that provided development models to other poverty alleviation programmes. A lesson learnt is that the bottom line is the development of participatory processes and enabling institutions that empower the poor to take part in defining the rules that determine their lives. Not organised poor are powerless and remain excluded from the political and economic system.

Key policy issues

The CPRE broadly confirms the validity of IFAD strategy in Vietnam with its clear emphasis on targeting the poorest of the poor through the development of participatory processes and enabling institutions. Given the profile and the nature of rural poverty in Vietnam, there is need for an enhanced focus in development co-operation towards institutional development. A number of key policy issues that have emerged during the CPRE require joint consideration by IFAD and the Government. These include:

Decentralisation, participation and empowerment. Under the IFAD supported projects, decentralisation and participation have emerged as crucial issues in developing local ownership and capacity. IFAD experiences and insights have led to completely new approaches. IFAD is already providing support to strengthen the capacity and authority of sub-provincial level i.e. commune and village based institutions and their relations with the rural private sector, and it will continue to do so, both within the context of the ongoing projects and under any new intervention. Participation and empowerment are of importance both to communities, to enable them to identify, plan and manage their development works and activities; and to small-scale producers, to assist them to more effectively manage their resources, interact with markets and influence policy towards the sector. The bottom line must be the local institutions that empower the poor to take part in defining the rules that determine their lives. Yet, local empowerment and the development of institutions of the poor alone will not be sufficient. Only when the poor and their interests are represented in institutions at the national level will there be a policy for the poor.

Financial services. It has been widely recognised that the main problem for rural development is not the lack of credit funds or the level of interest rates. It is rather one of organising access to financial resources, and establishing conditions of production that allow savings and make investments profitable. The conventional approach usually implied the design of credit-line projects, executed by state banks that generally dictated to the borrower the conditions and purposes and the use of funds, often incorporating obligatory input packages into the terms. The new way paved by the institutional development approach aims at helping the poor mobilise their own resources and establish local savings and credit systems. It empowers the poor to take their own decisions concerning the terms and designated use of credits, and it facilitates their link with commercial financial institutions. Issues for policy dialogue include: (i) support and consolidation of the existing SCG network and its further development into village-based finance institutions for servicing the financial inter-mediation needs of the poorer income groups; (ii) strengthening of these institutions through accompanying measures in the field of training, institution building and development of the appropriate legislative and regulatory framework; (iii) vision for the development and consolidation of a long term sustainable micro-finance system, capable of extending financial services to the poorest target groups in the country; and (iv) below-market interest rates which prevail in much of the formal credit operations.

Gender mainstreaming. There still exists in Vietnam significant inequality in the distribution of power within the household in terms of decision-making, work load, representation in institutions, access to productive assets, such as land and credit and education for some ethnic women. Gender mainstreaming is not an issue of policy bias but rather a function of traditional cultural values and constraints. Gender mainstreaming is essential if poor women's food and nutritional security is to be addressed by the project on a sustainable basis. Gender concerns should be explicitly woven into all aspects of project design and the gender-specific causes of women's poverty be identified. Issues for policy dialogue include: land titles to women farmers as otherwise women may be getting disenfranchised of their land use rights; increased presence of women and greater influence in public institutions; ethnic women have unequal and inadequate access to education and health services.

Marketing and commercialisation. An area of great strategic importance is commercialisation of production systems and the development of enhanced commercial linkages between small-scale producers and private markets for inputs, produce and production support services. Starting point is the recognition that continued exclusive emphasis on food crop and livestock production will not have a major impact in reducing rural poverty. Rather, increased rural incomes and broad-based economic growth depend upon the ability of smallholder producers to participate better in the rapidly expanding market complex. They are constrained from doing so by a number of factors, including their lack of relevant skills; weak infrastructure, particularly roads; low production levels; the lack of an intermediary level rural trade network; and inadequate services and information on price and market potentials and requirements. All these elements are essential constituents of an enabling economic environment for rural producers and can be created and influenced mostly by the work of institutions. Appropriate policies need to be developed and implemented to allow both the smallholders and the private sector to develop together in a manner that is efficient and equitable. In the age of economic globalisation, the vision and primary task of public investment in poverty alleviation, including development aid, is to create conditions that guarantee the poor access to the formal private sector. This intermediary and linking function should enable not only the access to the national and international markets, but mainly the creation of an institutional and environmental framework allowing the poor to exploit the development potentials of the private sector. This strategic approach should remain central and provide the basis for any new IFAD intervention in Vietnam.

Role of mass organisations and NGOs. Mass organisations, such as the Vietnam Women's Union (VWU) and the Farmers' Association (FA), have developed strong implementation capacity and have been closely associated with IFAD projects providing assistance in training and group formation of rural women and men. Essentially, the relationship has been one of perceiving the Women's Union or the Farmers Association as "service providers". Mass organisations, which originated in the centrally planned era as front organisations, have the infrastructure and outreach to transform themselves into genuine NGOs. An important area of policy dialogue is the promotion of a greater role for civil society in the development process through formation of community-based groups/organisations that would operate in remote upland areas in close association with mass organisations and with capacity building support from local or international NGOs. The coalition with mass organisations and suitable NGO's, with hands-on experience in mobilising and empowering rural communities and women specifically, could generate added value in a cost-effective manner, for the benefit of rural poor. Experienced NGOs could supply technical support and provide a link between the private sector and the rural communities in terms of inputs and marketing opportunities and facilitate the use of modern technologies with the view to optimising costs and promoting sustainability of services.