IFAD to Support Community Initiatives Project in Lao Peoples Democratic Republic

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IFAD to Support Community Initiatives Project in Lao People's Democratic Republic

Press release number: IFAD 33/02

Rome, Wednesday 17 July 2002 – A USD 21.14 million project in the Lao People’s Democratic Republic – the ‘Oudomxai Community Initiatives Support Project’ – will receive a USD 13.41 million loan from the International Fund for Agricultural Development (IFAD). A loan agreement was signed today at the Fund’s Headquarters by HE Mr. Soutsakhone Pathammavong, Ambassador of LAO PDR to France and Mr. Lennart Båge, President of IFAD.

The project area comprises seven districts containing 728 villages. There are several reasons that have determined poverty in these villages among which are: lack of access to sufficient paddy land for cultivation and other productive resources; lack of access to improved technology or capital required for investment in income-generating opportunities; engagement in shifting cultivation and opium production and consumption; lack of access to government support services, social services and rural access roads. Project beneficiaries will include about 29 000 households who live below the national poverty line in the province of Oudomxai. Most of the households targeted belong to ethnic groups living in the midland and upland areas who practise shifting cultivation and opium production. Women are an important part of the target group because of the major role they play in on and off-farm activities.

The Oudomxai Community Initiatives Support Project’s overall goal is sustained reduction in poverty and improvement of the economic and social conditions of the targeted population. Specific objectives are increased income, food security and returns to land and labour based on sustainable farming practices, natural resource management and improved living standards of the target population. Presently, crops are grown under shifting cultivation systems which account for almost one third of the cultivated area. Opium poppies are widely grown in the northern uplands, and in 2000 the estimated total production was 167t from 19 000 ha. The project will assist beneficiaries to diversify their crops.

The project will support the target group’s initiatives, adapting participatory development as its basic approach to ensure their participation in and ownership of the project and therefore its sustainability. The project will have the following five components: community development, agriculture and natural resource management, rural financial services, rural infrastructure development, institutional support.

With the programme, IFAD will have financed 8 projects in the LAO PDR, for a total loan amount of about USD 47.50 million.

IFAD is a specialized agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.