JFPR: CAM 34207

PROPOSED

GRANT ASSISTANCE

(Financed by the Japan Fund for Poverty Reduction)

TO THE

KINGDOM OF CAMBODIA

FOR

COMMUNITY-BASED LIVELIHOOD ENHANCEMENT

FOR THE RURAL POOR

To be implemented in conjunction with the approved loan

Northwestern Rural Development Project (Loan 1862-CAM)

June 2002

CURRENCY EQUIVALENTS

(as of 30 April 2002)

Currency Unit – riel (KR) KR1.00 = $0.00026 $1.00 = KR3,835

For the purpose of calculations in this report a rate of $1.00 = KR3,835 is used, the rate generally prevailing at the time of appraisal of Loan 1862-CAM.

ABBREVIATIONS

ADB – Asian Development Bank AVI – Australian Volunteers International BRAC – Bangladesh Rural Advancement Committee CBO – community-based organization ha – hectare IA – implementing agency JFPR – Japan Fund for Poverty Reduction MFI – microfinance institution MRD – Ministry of Rural Development NRDP – Northwestern Rural Development Project NGO – nongovernment organization PAM – project administration manual PMO – project management office SSC – Social Services of Cambodia TPO – Transcultural Psychosocial Organization UNICEF – United Nations Children’s Fund UNIFEM – United Nations Development Fund for

Women VDC – village development committee WB – World Bank

NOTES

(i) The fiscal year of the government and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars.

CONTENTS

Page MAP ii I. INTRODUCTION 1 II. BACKGROUND AND RATIONALE 1 III. THE PROPOSED PROJECT 2 A. Objectives 2 B. Scope 2 C. Costs and Financing 4 D. Implementation Arrangements 4 E. Impact Assessment 7 F. Risks, Assumptions, and Assessment 9 IV. THE PRESIDENT’S RECOMMENDATION 9 APPENDIXES 1. War-Related Trauma and Consequent Poverty

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2. JFPR Project Framework 133. Community-Recognized Categories of Poverty 174. Description of JFPR Project Beneficiaries 185. Nongovernment Organization Selection Criteria 20

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I. INTRODUCTION

1. The Asian Development Bank (ADB) approved the Northwestern Rural Development Project (NRDP) loan for Cambodia on 27 November 2001.1 The loan project will extend the rural road network to the four isolated northwestern provinces of Banteay Meanchey, Battambang, Oddar Meanchey, and Siem Reap. It will also fund other physical infrastructure at the district and village levels such as schools, health facilities, markets, water supply and sanitation schemes, rice drying and storage facilities, and community buildings. The beneficiaries will be involved in the loan project, from identifying and prioritizing pro-poor investments to the construction, maintenance, and operation of civil works. The project area is one of the poorest in Cambodia, having been affected by civil war for many years. The war has caused major material and psychosocial difficulties for families and communities, such as lack of basic economic and social services, lack of social connectedness, lawlessness, selfishness, and violence. These, in addition to powerlessness, have strongly affected the capacity of the poor to improve their livelihood and to participate actively in the development process of their villages and communities. The loan does not address the low level of participation from the most vulnerable people of the rural villages. Hence, a Japan Fund for Poverty Reduction (JFPR) Project is proposed to provide (i) production support to raise the income of the poor; (ii) community-based conflict resolution through joint training and capacity-building activities; and (iii) confidence building through counseling, to make livelihood projects fully sustainable in the context of poor people who have lost trust and energy because of so many years of civil war. This JFPR Project was designed after discussions with the government agencies and nongovernment organizations (NGOs) involved in livelihood support and mental health. It was appraised in July 2001, and the Government concurred with it on 1 August 2001.

II. BACKGROUND AND RATIONALE

2. Poverty. Cambodia is one of the poorest countries in the world. An estimated 36% of the population live below the poverty line, of whom almost 90% live in rural areas. A large proportion of the people are clustered around the poverty line. Rural poverty is a multidimensional phenomenon, largely related to the 3 decades of war and to the damage this has done to the population and their living environment, such as (i) disability and displacement; (ii) inadequate opportunities in agriculture and other rural activities; (iii) poor quality of land due to land mines and natural calamities; (iv) lack of access to education, health, safe water, and other services; (v) lack of access to good quality seed, fertilizers, irrigation, and credit; (vi) underdeveloped markets, remoteness, and poor communications; and (vii) permanent sense of insecurity, vulnerability, and dependence. Poverty is concentrated in the rural areas, and poor villages tend to be located where there is less productive land and in areas more vulnerable to natural disasters. About 90% of poor households rely on subsistence agriculture as their primary source of income. Weak property and land rights compound the problem of inadequate productive resources for the rural poor. Damage to the infrastructure, and land mines have contributed to low agriculture production. Poverty is accompanied by substantial income inequality. 3. Postconflict Causes of Poverty in Cambodia. A major reason for persistent poverty in Cambodia is the long period of destructive conflict and instability. Appendix 1 provides background information on war-related trauma and consequent poverty in the country. Most of those who were displaced, maimed, orphaned, or widowed by the conflict live in the JFPR 1 ADB 2001. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to

Cambodia for the Northwestern Rural Development Project. Manila.

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project area of northwestern Cambodia. They are still severely affected by the trauma of the past, and because of this are less able to make use of development potential. Therefore, emphasis on improving the standard of living of the most vulnerable groups is essential but not fully sufficient to improve the quality of life of the poor in northwestern Cambodia. It is for this reason that an integrated approach of material and psychological support is needed to help the vulnerable groups to benefit from and to participate actively in the development of their communities and to give the poor the opportunity to heal the psychological wounds in their communities. The counterpart loan provides opportunities for the poor to access markets and social services. It does not provide for direct income support, community-based conflict resolution, or psychosocial support. The JFPR Project will complement this loan project through targeting those groups particularly suffering from war-related experiences by enabling them to participate in village development and then to benefit more from the NRDP. It will assist with production support, capacity building at the beneficiary level, psychosocial counseling, and confidence building.

III. THE PROPOSED JFPR PROJECT

A. Objectives 4. The long-term goal of the JFPR Project is to reduce rural poverty in northwestern Cambodia on a sustainable basis. Its purpose is to enable the most vulnerable groups of the villages to contribute more effectively to the development of their communities and to share equally in its benefits. The very poor are otherwise excluded or exclude themselves from these activities because they have the urgent need to feed their families every day and they have to think how to survive another day. The project objectives are to (i) improve the food security and income status of the poor through production support and skill training, and (ii) raise confidence and initiative to overcome the emotional and social legacy of the war. The Project Framework is given in Appendix 2. B. Scope 5. Components. The JFPR Project has four main components: (i) support for livelihood development, (ii) support for community-based conflict resolution and capacity building counseling for victims of trauma, (iii) benefit monitoring and assessment, and (iv) project management and support. Under component 1, the following activities will be undertaken: (i) livelihood development through training; (ii) production support for income generating activities; (iii) formation of rice and cow banks for improved access to production resources by the poor, (iv) support to horticulture, animal husbandry, and other diversified agricultural activities; (v) training to communities in fruit tree raising, home gardening, improved livelihood production including poultry, setting up and management of rice and cow banks, and veterinary care; (vi) supply of veterinary medicines; (vii) training in numeracy and literacy; (viii) participatory short-term planning exercises; and (ix) awareness creation for VDCs. Under component 2 activities will aim at community-based conflict resolution and capacity building, and will provide support to the victims of trauma who may remain excluded from economic opportunities on account of their isolation. Activities to be supported by the Project under this component include (i) training of health staff and community resource persons in counseling and mental health education; (ii) mental health education sessions at community level (video education, house-to-house visits, group discussions, school presentations, pamphlets, and posters); (iii) counseling of trauma victims and their families; (iv) facilitation of participatory desertification and self-help group formation among persons with similar problems; and (v) group therapy. Component 3 will

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consist of benefit monitoring and poverty impact assessment, and under Component 4 support will be included for overall project management and administration. 6. Under Component 1, production support for individual households and self-help groups will be provided on a revolving fund basis.2 This is similar to the experience of the Bangladesh Rural Advancement Committee (BRAC) under its Income Generation for Vulnerable Groups Development program in Bangladesh. This program was developed on the basis of findings that indicate that the poorest, who suffer chronic food shortages and endemic insecurity, cannot be reached by conventional microfinance programs. To deepen the outreach of microfinance, it becomes necessary to combine subsidized assistance with skills training, and savings and credit services, to enable them to graduate to “normal” microfinance services over time. To begin with the interest rate was a flat 15%. It was found to work and helped to target the hard-core poor and bring them within the ambit of BRAC’s microfinance activities. 7. Under the second component, rural development NGOs will provide training and capacity building services (video education, house-to-house visits, group discussions, school presentations, pamphlets, and posters) to target groups under the Project. 8. The intervention will significantly contribute to the improvement of their relationships, economic situations, and livelihoods, and will help the groups deal with their perceived and real insecurities in their everyday life. 9. Under component 3, a community-based participatory monitoring will be carried out using simple indicators identified by the communities (Appendix 3). External poverty impact evaluation will be done. 10. For component 4, overall project management and administrative support will be provided by designated NGOs, which will ensure a highly participatory management approach that will involve the beneficiaries. 11. Geographical Concentration. The northwestern region is the most war-affected part of Cambodia and one of the poorest. The Project will be implemented in areas identified by the World Food Programme as having more than 40% food-insecure households in the six districts of the four northwestern provinces of the NRDP: Svay Check in Banteay Meanchey, Rattanak Mondol and Samlot in Battambang, Samraong and Banteay Ampil in Oddar Meanchey, and Varin in Siem Reap.3 The total project area population is 183,206, spread across 34 communes and 243 villages. The JFPR Project will focus only on very poor (15% of the population) and poor households (45% of the population), as identified under the social assessment of the counterpart loan.

2 The solidarity group lending method will be applied. Loans of about $22 will be made for a period of up to 12

months, depending on the type of income-generating activity in which the household is going to get involved. Loan size may increase in the second and third year, depending on the repayment rate, which is expected to be between 96 and 98%. Interest on loans will be charged at 2%, one point lower than the interest charged by microfinance institutions (MFIs). This will be the minimum interest rate, which may be raised to the prevailing rate of 3% charged by MFIs once the groups have reached the necessary level of financial viability that would enable them to do so.

3 The districts included in the JFPR project area have been selected according to the following criteria: (i) they are remote and poorly linked to the rest of the country; (ii) they have a high percentage of recent land mine victims and, therefore, disabled people; (iii) they include a high percentage of recently settled communities compared with older, established communities; and (iv) they have at least one NGO operating in the field of mental health and counseling.

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12. Targeting Affected People. The target group of the JFPR Project will be female-headed households, war widows, the disabled, and displaced soldiers. The characteristics of these targeted groups are given in Appendix 4. Indirectly, families and children of the vulnerable groups will benefit from the increased household income and the rebuilding of trust and confidence of the traumatized members of families. NGOs will work with the poor to identify homogenous groups for training, and psychosocial support activities. This will help to reduce social exclusion and improve integration. Smaller groups of the poor will identify members among themselves to work together for livelihood development and support activities. To identify the poor, NGOs will look at food security of the household, material assets, and economic variables. C. Costs and Financing 13. The total project cost is estimated at $3,380,500 equivalent, of which $1,800,000 will be financed on a grant basis from the JFPR, funded by the Government of Japan. It is estimated that about 43% of the project cost will be for production support; 20% for training; 26% for confidence building and counseling; and the remainder for project management, impact assessment, and contingencies. The cost estimates and financing arrangements are presented in Table 1.

Table 1: Estimated Cost-Sharing Arrangements Per Component

Contributions

Production

Support

Training

Confidence

Building

Impact

Assessment

Overall Project

Management

Total JFPR-Financed Project Costs

770,320 354,240 462,640 25,000 187,800 1,800,000

Poor 800,000 60,000 600,000 500 0 1,460,500a

Civil Society 0 0 50,000 10,000 10,000 70,000

Government 0 0 0 0 50,000 50,000

Total Project Costs 1,570,320 414,2400 1,112,640 35,500 247,800 3,380,500 JFPR=Japan Fund for Poverty Reduction. a The beneficiary contribution will be almost entirely in kind in the form of rice contributions to the replenishments of the rice banks, as well as the replacements to the cow banks, which will continue to run even after the project, with the beneficiary contributions. Similarly, trained beneficiaries will contribute by exchanging tree saplings and seeds with, providing veterinary advice and guidance to, etc. members of the community. Source: Asian Development Bank estimates. D. Implementation Arrangements

1. Executing and Implementing Agencies

14. Executing Agency and Coordinating NGO. The Executing Agency of the JFPR Project will be the Ministry of Rural Development (MRD), which is also the executing agency of the counterpart loan project. An international NGO working through local NGOs (CARE Japan through CARE Cambodia has expressed interest) will be selected as a coordinating agency for the whole JFPR Project. This coordinating agency will set up, within one month of project inception, a JFPR project management office (PMO) and will provide project coordination, overall operational guidance for JFPR project implementation, grant management for and funds channeling to the implementing agencies (IAs), technical backstopping, resolution of conflicts that may occur during implementation, and reporting to the Government and ADB.

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15. Implementing Agencies. Qualified international, national, and provincial NGOs will be contracted as IAs through the coordinating NGO. The IAs will be jointly selected by the coordinating NGO and ADB, based on technical proposals submitted by the shortlisted NGOs. The Government will be invited as an observer. The summary terms of reference for the IAs are in Appendix 5. Detailed terms of reference will be prepared by the PMO though district level consultations in order to capture the needs of different villages. A JFPR project coordination desk will be established in each of the four project provinces within the already existing NGO offices. They will be responsible for day-to-day management of all project activities at the provincial level. Coordination and exchange of information and experiences among NGOs are an important consideration in the project design. The IAs will work closely with CBOs, the coordinating NGO, the respective line ministries, and local authorities. The IAs will do, among other things, the following:

(i) The income-generating and training components will be implemented by national and international NGOs, and coordinated at the provincial level through the JFPR project coordination desks. The production support component will be implemented mainly on a revolving fund basis: The poor will contribute to it by repaying the funds they receive. Most of the support will be in kind.

(ii) The community-based conflict resolution and confidence-building activities will be implemented in the provinces of Oddar Meanchey and Siem Reap by a local NGO, Social Services of Cambodia (SSC). Another local NGO, the Transcultural Psychosocial Organization (TPO), will implement them in Banteay Meanchey and Battambang provinces. Australian Volunteers International (AVI) will provide technical backstopping for SSC activities. IAs will engage mobile mental health teams from the International Organization for Migration for training sessions and psychosocial services according to the needs.

(iii) An independent local research institute or independent domestic consultants will do the impact assessment component. The PMO will identify this entity early in the process in order to determine the outputs for the impact assessment.

2. Funds Flow, Procurement, and Consulting Services

16. Funds Flow and Cash Arrangements. ADB will transfer the JFPR funds to an imprest account in the name of the coordinating NGO functioning as PMO. This coordinating NGO will then subcontract project components to the respective implementing NGOs, which will open separate accounts for the JFPR Project. The PMO will prepare (i) the contracts for the training and productions support activities, and (ii) the three contracts for the confidence-building and counseling component (AVI, TPO, and SSC). Funds will be advanced and replenished from the PMO to the implementing NGOs after they submit satisfactory progress and expenditure reports in line with the work plan. Expenditures less than $10,000 may be liquidated and replenished under ADB’s statement of expenditure procedures. The accounts will be subject to ADB review as required. The PMO will prepare annual audit reports by external auditors satisfactory to ADB. The Government has confirmed that all project activities will be conducted free of taxes and levies. The detailed disbursement arrangements will be specified in a letter of agreement. 17. Procurement. Contracts will be awarded in accordance with the agreed upon eligibility criteria and procedures satisfactory to ADB. Any procurement under the Project will be conducted in accordance with ADB’s Guidelines for Procurement. 18. Consulting Services. AVI is the only international NGO working in Cambodia on issues of confidence building and counseling. The local NGO, TPO, is providing counseling in Banteay

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Meanchey and Battambang and does not have the capacity to expand its program to other provinces. The local NGO, SSC, is providing counseling in Kandal Province and is planning to expand its program to Oddar Meanchey and Siem Reap, but needs additional capacity for this expansion. Apart from AVI, there is no other expertise available on a national basis that could provide adequate backstopping for SSC. ADB will therefore directly select (i) AVI to provide backstopping for SSC, (ii) TPO to provide confidence building and counseling in Banteay Meanchey and Battambang provinces; and (iii) SSC to provide confidence building and counseling in Oddar Meanchey and Siem Reap provinces. Under the AVI contract, one expert in counseling and psychology in postconflict environments will be recruited for a period of 36 months. All consultants will be selected and engaged in accordance with ADB’s Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for engaging domestic consultants.

3. Performance Monitoring

19. Reporting. Based on participatory rural appraisal techniques, the JFPR project coordination desk will prepare, during the first 2 months of activities, project area profiles at the village level based on the information from the socioeconomic baseline and people’s own categories prepared for the counterpart NRDP. With the help of the PMO, the IAs will set their own performance indicators, monitor their quarterly progress, and evaluate performance at the end of the JFPR Project. All this will be done in consultation with the CBOs. The monitoring and evaluation activities for the various JFPR components will be reflected in biannual reports and examined by ADB’s review missions. Based on the results of these assessments during implementation, ADB, MRD, and the coordinating NGO will decide on possible reallocations of funds under the various project components. The IAs will submit quarterly progress reports on their activities to the PMO, which will establish a performance and impact monitoring system in conjunction with the counterpart NRDP and in collaboration with the IAs, and will prepare biannual progress reports for MRD and ADB. 20. Impact Assessment. The PMO will engage an independent research institute or independent domestic consultants to provide poverty impact assessment of the JFPR Project.4 Impact assessments will be done at midterm and 4 months before JFPR project closing. 21. Implementation Schedule. The JFPR Project will be implemented over a period of 3 years starting in March 2002 and ending February 2005.

4. Linkages 22. Conceptual Link to the Counterpart Project. The JFPR Project is conceptually linked to the counterpart rural development loan (NRDP), which is financing (i) rural infrastructure, (ii) capacity building, and (iii) rural livelihood enhancement. The JFPR Project will complement the NRDP by providing skills and production support and by improving the confidence of a specific group of vulnerable people who would otherwise not effectively participate in the counterpart 4 Basic indicators including those developed by the World Food Programme will be used to evaluate the impact of

the JFPR Project. These will include malnutrition and hunger; food security including availability of rice, draft animals, and farm implements; lack of shelter; vulnerability to economic and other shocks; alienation from society; the numbers of poor villagers processing raw materials, cultivating fruit trees and vegetables; raising chickens and pigs; selling basic veterinary services; managing cow and rice banks; weaving silk and sewing; maintaining and fixing wells; dependency on wage labor; dependency on forest products and coping mechanisms; productivity per hectare; income of the poorest households; attendance sheets and minutes of the meetings; reduced violence outside and inside the house; and regular interaction with local authorities and other members of the village.

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loan. The most vulnerable people of the community are often too busy looking for their daily subsistence to participate in development initiatives. By increasing their income, skills, and confidence, the JFPR Project will increase the participation of the poorest segment of the population in the community development activities of the NRDP. The counterpart project will assist in building capacity at the district/commune/village, provincial, and national levels, while the JFPR Project will help build capacity at the grassroots level and also at the level of the village development committees, thereby completing the decision-making chain. Democratic participation is a new concept in the project area that has to become part of the mindset of ordinary villagers, especially among vulnerable groups, before it can actually be practiced within the context of the two projects. Social mobilization under the JFPR Project will focus primarily on this aspect of building harmony among sometimes disparate groups in the same locality, and sowing the seeds of participatory decision-making for the common interest of the community, at the same time satisfying critical needs of individual households. The challenge here is to build the sense of community, commonality of interests, and longer term perspectives. The rural livelihood enhancement component of the NRDP will promote a savings and credit discipline at the village level and will prepare and facilitate beneficiaries’ access to the formal financial system. It has been recognized by microfinance institutions that microfinance programs in Cambodia do not reach the poorest. The JFPR Project will complement the counterpart project by also involving the poorest of the poor in village-based microfinance activities. The counseling and confidence-building support of the JFPR Project is crucial for preparing this group psychologically, emotionally, and socially for participation in a community-based development initiative. The JFPR Project is innovative and pilot in nature. If successful it can be replicated in the other provinces of the project area as well as in other parts of the country. 23. NGO and Community Involvement. International and national NGOs will directly implement all components of the JFPR Project. The capacity of local NGOs will be strengthened by working in close collaboration with international and other national NGOs. E. Impact Assessment 24. Project Beneficiaries. The poverty incidence in Cambodia is about 36% nationally and approximately 43% in rural areas. In the JFPR project area, however, the poverty incidence is estimated at 60%.5 The JFPR Project will directly benefit about 90,000 poor and very poor in northwestern Cambodia. Of these 90,000, an estimated 45,000 people will be provided with direct production support and 30,000 with skills training, while some 40,000 will participate in confidence-building and counseling activities. The expected poverty reduction impact has three dimensions: (i) improved food security of the poor and very poor; (ii) crossing the poverty line on a sustainable basis, and (iii) increased participation in the development opportunities of the region through confidence building. In addition, the JFPR Project will provide up to one fourth of the very poor with opportunities to improve their socioeconomic conditions without necessarily crossing the poverty line. While the JFPR Project will have substantial impact on increasing the opportunities of the poor to participate in development opportunities as provided by the NRDP loan, and improving their food security status, an additional estimated 8% of the JFPR project beneficiaries will actually cross the poverty line on a sustainable basis. 25. Qualitative Sustainable Poverty Reduction Impact. The JFPR Project will make a direct contribution to poverty reduction among the most vulnerable groups. It is expected that the increased sense of self-reliance and confidence among the poor, and the strengthened 5 The number of people in the six project districts of the four provinces is 185,000, of whom an estimated 60% (ca.

110,000) are poor, of whom 25% are very poor.

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operational capability of local NGOs, will enhance the sustainability of the positive impact on poverty reduction generated under the JFPR Project and the counterpart NRDP. There will be a strong impact on communities: (i) female-headed households and war widows will be given access to resources to undertake production and income generation; (ii) the immediate food deficit will be reduced in a sustainable way through rice and cow banks; (iii) demobilized soldiers and disabled persons will be integrated into the normal socioeconomic sphere by undertaking productive activities following participatory poverty reduction principles; and (iv) capacity building and increased confidence at the beneficiary level will empower communities and individuals to help themselves, and to participate actively in the development process. 26. Sustainability. The revolving fund activities could easily continue beyond the JFPR project period with self-generated resources.6 The equipment, machinery, and vehicles will remain with the IAs once the Project is over, allowing them to continue these activities on a more sustainable basis. Social and development workers, trainees, and resource persons of the villages will acquire training in confidence building and trauma counseling activities and will be able to transfer the skills learned to other community workers. Social cohesion will increase, and violence in the communities will be reduced. With this emphasis on capacity building and empowerment, MRD will be able to develop more effective rural development interventions. If the JFPR Project experience can be successfully replicated, similar poverty reduction impact can be attained across the country, thereby making a major impact on poverty reduction at the macro level. Because these interventions are cost effective and relatively small compared with the budget of MRD and international NGOs, they will be continued if proven successful, and international NGOs will be willing to continue support to those activities that are not self-financing such as counseling. 27. Participatory Development Issues. Selected international and national NGOs, as IAs, will implement the Project and will adopt participatory approaches at all levels of project planning and implementation, with focus on the specific needs of the beneficiaries. CBOs, neighborhood groups, production and maintenance committees, and other grassroots organizations will play key roles in the implementation of the JFPR Project. The Project will make an important contribution to changing the mindset of the people and local authorities, including government agents, regarding participatory development. The Project will provide capacity-building support for the participating local NGOs through the collaboration between international and national NGOs. This will further strengthen their capabilities to help the most vulnerable groups become more self-reliant in their livelihood and will be complementary to the training program built into the counterpart project to educate all stakeholders in participatory techniques. The JFPR Project also incorporates appropriate training for both beneficiaries as well as CBOs. Through such support, the beneficiaries will be closely involved in the activities of the village at all levels and will have better access to opportunities, resources, and services provided under the NRDP.

6 In the case of the rice banks, for instance, the families borrow from the rice banks during rice deficit periods, when

the price is high, to repay when the price is low. This can be considered a “negative interest rate” for the families, which by repayment make the capital of the rice bank grow without additional input from the Project. The repayment of interest rates allows the beneficiaries to meet administrative services and operating costs and, if necessary, to care for social emergency cases in the village. In the case of cow banks, when the newborn calf is female, it is paid back to the bank and given to a second phase client. The cow bank and the loan cycle will continue to operate even after the cessation of project assistance.

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F. Risks, Assumptions, and Assessment 28. Counseling activities to rebuild the trust and confidence of war-traumatized people are very time consuming. The assumption is that the JFPR Project will make a visible impact within a short time. However, the 3-year implementation period may not be sufficient to see tangible changes in the mindset of the people; change is an ongoing process must be supported on a sustainable basis. Hence, the changes can be recognized through participatory interactions with the poor measuring the degree and quality of participation, rather than through economic analysis. 29. Confidence building through counseling and group therapy is effective only when relationships within a village and within the families can be built (or restored). The JFPR Project will improve such relationships. However, due to external factors such as lack of sufficient funding for the project area and the continued political instability, built-up trust may be challenged. While recent commune council elections were on the whole fairly peaceful, the national elections in 2003 could have a negative impact on security in the region. The Government has assured continued development support to the project area, and the counterpart ADB loan will address some of these issues. 30. Counseling may increase the awareness that land mines are actually being removed from the project area through other government programs. However, there are still land mines in some areas, the explosion of which may affect people and will challenge the work done under the confidence-building and counseling component of the JFPR Project.

III. THE PRESIDENT’S RECOMMENDATION

31. The President recommends that the Board approve ADB administering assistance to the Government of Cambodia in an amount not exceeding the equivalent of $1,800,000, to be financed by the Japan Fund for Poverty Reduction on a grant basis, for the purpose of Community-Based Livelihood Enhancement for the Rural Poor.

10 Appendix 1

WAR-RELATED TRAUMA AND CONSEQUENT POVERTY 1. Legacy of War. Following the Khmer Rouge takeover in Cambodia, over a million people were brutally killed from the 1970s through the middle 1990s. There are only a few families in Cambodia in which a father, husband, or son was not killed. When the Vietnamese overthrew the Khmer Rouge, thousands of Cambodians fled across the Thai border. Those who tried to escape from the camps in Thailand were subjected to torture, robbery, and rape, while many of those who remained in Cambodia died of starvation, untreated or mistreated disease, or overwork. Execution of educated Cambodians during the Khmer Rouge era resulted in low levels of human capital, which can hamper effective delivery of social and government services. An additional legacy of the war is the presence of land mines and other unexploded ordnance, which continue to maim, kill, and traumatize the population. The mental stress caused by the threat of mines can be compared to the impact of exposure to armed combat, as many individuals and households have to make the decision every day to cultivate land that may be mined or to send children to potentially mined areas for firewood collection. For these people the war is not over, and they do not know whether to continue to live in the memory of the past or start to live the present to build a better future. Demining is one component of the counterpart loan for the Japan Fund for Poverty Reduction (JFPR) Project. 2. Trauma-Induced Poverty. Big losses during the war period were not only in economic and human capital, but also in social capital. The legacy of many years of war and civil unrest has had a severe impact on the population. The country has many internally displaced persons; repatriated refugees; a high number of female-headed households and warwidows; internal migrants in search of better economic opportunities; demobilized soldiers trying to reestablish their livelihood systems; and disabled persons, who are among the most vulnerable of the population. Many of these people experienced years of physical and mental torture and stress. They are still severely affected by the trauma, and because of this are less able to make use of development potential. Witnessing violence, anxiety about death, fears of physical danger, displacement, separation, and suspicion have destabilized the society; social cohesion is low; and community-based organization is weak. The systematic destruction of the traditional systems of support and comfort has reduced the self-confidence and trust of the people, their planning skills, and their decision-making abilities. Hopeless and disillusioned poor people have become unable to look to the future and to define their own needs. Postconflict societies therefore have very different requirements for making development work and become sustainable. Any development activity must be supported with means to meet the needs for psychological and cultural rehabilitation, stemming from the legacies of the past 30 years.1 3. Inequalities and Poverty Cause Mental Stress. Another cause of stress and anxiety among the population is the widening gap between the rich and the poor, with the poor often finding themselves in a poverty trap that they are unable to break out of. These situations often force individuals into debt and consequent disposal of their few remaining assets, such as cattle and the little land they have, in order to try and free themselves from this cycle, when in reality the result is often more poverty. The war has also destroyed the former network of mutual help and mutual obligation, which is crucial for the survival of the most vulnerable groups in the villages. Some of this mutual help has been restored, although the nature of it has changed because of the change of the economy (from barter to cash basis). For this reason mutual help has sharpened again, but because of the increased monetization of the economy, people need 1 Kreimer, A., J. Eriksson, R. Muscat, M. Arnold, and C. Scott. 1998. The World Bank’s Experience with Post-conflict

Reconstruction. Washington, D.C.: World Bank.

Apppendix 1

11

cash income to become part of it. Agricultural inputs do not benefit the landless poor and war returnees, as they need group-based income opportunities that are not based on individual assets. 4. Mental Trauma. Hopeless and disillusioned poor become unable to look into the future and to define their own needs. Mental stress is widespread among Cambodians of all ages due to deprivation, uncertain livelihood, powerlessness, abuse of rights (civil, human, sexual), and witnessing death. The average adult Cambodian has witnessed nine severe traumatic events. Families, women in particular, are suffering the consequences of these devastating experiences. The average adult Cambodian with mental distress commonly reports symptoms of depression, insomnia, nightmares, unremitting headaches, acute anxieties, dizziness, and inability to carry out daily activities because of a general lack of ability to focus and concentrate. With the ending of the war, people now try to cope with their difficult material situation on a daily basis, and because they have not yet dealt with the traumatic events of the past, particularly in the northwest, the economic difficulties are exacerbated by the untreated trauma. These trauma-induced symptoms serve as a barrier to empowering people to help themselves and to effectively take part in village development. The extent of participation observed in isolated villages is minimal, with vulnerable groups in particular being isolated from the decision-making processes of the communities. War-related trauma, and destructive coping mechanisms such as alcohol, domestic violence, paralysis of action, and mistrust, constitute a vicious cycle, that is difficult to break out of and that prevents people from having a long-term view of the future and from being confident. 5. Experiences with Counseling. There are no government and very few nongoverment organization (NGO) programs devoted to mental health or counseling. The Transcultural Psychosocial Organization (TPO) and Social Services of Cambodia (SSC) are the only local NGOs that have been providing mental health services in the last 5-9 years in the country. In addition to these NGOs, the International Organization for Migration has a psychiatrist and psychiatric nursing training program that has facilitated, as of the end of 2001, 20 psychiatrists and 20 psychiatric nurses. International and national NGOs are providing some material support, but a lot more must be done for psychosocial support. The Demobilization and Reintegration Project of the World Bank targets only veterans of Battambang area for reintegration into civilian life through counseling activities development and economic assets.2 6. Counseling in Postwar Environments and Other Agency Involvement. Many bilateral, multilateral, and nongovernment organizations have projects with trauma counseling as a component for postwar environments. A large amount of experience on trauma counseling has been garnered by organizations like the United Nations Children’s Fund (UNICEF), United Nations High Commissioner for Refugees (UNHCR), United Nations Development Fund for Women (UNIFEM), and Red Cross. These organizations have been active in postwar, postconflict, postdisaster countries all over the world, as trauma counseling is nowadays recognized to be an important part of emergency and relief assistance and support. These are a few examples from different organizations:

2 Reinsertion assistance is intended to cover the immediate needs of the veterans during and following discharge

and to help them in the initial phases of their return to full civilian life in their communities. The reinsertion package consists of food and essential household kits, planning for shelter assistance, provision of essential agricultural tools and inputs such as seeds, and the beginning of formulation of skills/vocational training programs. It also includes counseling after arrival in the communities of settlement, and sensitization of host communities. Source: Demobilization and Reintegration Project Information Document. Washington, D.C. World Bank.

12 Appendix 1

(i) The World Bank, under its conflict prevention and postconflict reconstruction program, has various projects in Cambodia, Gaza, Guatemala, Rwanda, Somalia, Tajikistan, countries of the former Yugoslavia, and other countries, in which trauma counseling is often a component. In the Republic of Bosnia Herzegovina, the World Bank is implementing a $30 million loan for the War Victims Rehabilitation Project, which includes a component of $5.4 million on psychosocial rehabilitation (other components deal with physical rehabilitation– prostheses, osthesis, orthopedic reconstruction surgery, etc). The project has two related project loans for land mine clearing and community development.

(ii) The European Commission is supporting trauma counseling in other countries of former Yugoslavia.

(iii) The Australian Agency for International Development (AUSAid) financed Australian Volunteers International (AVIs) for the implementation of a trauma counseling program in East Timor.

(iv) The German Agency for Technical Cooperation (GTZ) is supporting trauma counseling in Burundi and Sri Lanka.

(v) The Government of the Netherlands supports, in collaboration with the World Health Organization (WHO) and the Free University of Amsterdam, the activities of TPO (one of the local NGOs selected for the JFPR Project). TPO has extensive experience in trauma counseling and has been carrying out its projects in African countries such as Congo, Ethiopia, Mozambique, and Uganda), in Gaza; and in Asian countries such as Cambodia, India, and Nepal.

(vi) Some Nordic countries are supporting trauma counseling in Sri Lanka. (vii) Canada is supporting traumatized children in Sri Lanka. (viii) UNICEF is providing psychosocial assistance in Burundi. (ix) UNIFEM has financed a mental trauma counseling program for women in

Cambodia. (x) The Human Rights Office of the US State Department has for years funded the

activities of SSC (one of the local NGOs selected for the JFPR Project), which combines psychosocial interventions with economic empowerment.

7. The JFPR Project Innovation. To have a sustainable impact on the rural poor of the project area, in addition to production support, training and counseling are needed in order to give them the opportunity to increase their skills and to heal their psychological wounds. The counterpart loan provides opportunities for the poor to access markets and social services. It does not provide for direct income support, community-based conflict resolution, nor psychosocial support. It is for this reason that an integrated approach of material and psychosocial support is needed to help the vulnerable groups to benefit from and to participate actively in developing their communities. This JFPR Project proposal follows such an approach.

Apppendix 2

13

PROJECT FRAMEWORK

Design Summary Performance Targets

Monitoring Mechanisms Assumptions and Risk

A. Goal Reducing rural poverty on a sustainable basis in the four rural northwestern provinces that have been affected by war until recently (Banteay Meanchey, Battambang, Oddar Meanchey, and Siem Reap)

• The needs of the

poor reflected in the village plans

• Certain budget

allocated to development activities for the most vulnerable

• Increased sense

of collective will and solidarity

• Project progress

reports, project impact reports, and review missions.

• Asian Development

Bank (ADB) review missions

B. Purpose Enabling the most vulnerable groups (female-headed households, war widows, demobilized soldiers, and disabled) to participate in village development and access services

• 8% of the poor

crossing the poverty line on a sustainable basis

• 25% of the very

poor are better off on a sustainable basis.

• Increased

number of vulnerable groups in participating development activities

• Participatory

monitoring mechanisms for the increasing ability of the target groups to analyze and explain issues and problems and to take independent action

• Regular interactions

with key stakeholders • Project progress

reports, project impact reports, and review missions.

• Continued Government

commitment to its poverty alleviation strategy in rural areas

• Stable security situation

in the project area

C. Outputs 1. Improved food security

among the target groups 2. Improved livelihood skills

among the target groups

Improved and diversified farming and nonfarming activities Improved and diversified economic activities, self-employment, and improved business management

• Less dependency on

forest products and coping mechanisms

• Food security • Productivity • Number of poor

villagers processing raw materials; cultivating fruit trees and vegetables; raising chickens and pigs; providing basic

• Effective management

of project implementation by the project management office (PMO)

• Appropriate selection of

beneficiaries • Appropriate monitoring

system • Effectiveness of village

14 Appendix 2

3. Increased confidence

and self-esteem of the target groups to take initiative and to be more proactive to link up with development activities

4. Improved community

capacity for participatory monitoring and evaluation

5. Improved access of

communities to NGO services and support

The very poor and the poor start being active in meetings and expressing their ideas on development issues The poor and very poor participate in community monitoring and evaluation of Project inputs The very poor and poor gain access to NGO support from which they have been hitherto excluded

veterinary services; managing cow and rice banks; weaving silk and sewing; maintaining and fixing wells

• Reduced dependency on wage labor

• Attendance sheets

and minutes of the meetings

• Reduced violence outside and inside the house

• Regular interaction with local authorities

development committees (VDCs)

• Impact evaluation

carried out properly by nongovernment organizations (NGOs)

D. Activities Component 1 1. Production support, by

• providing agricultural inputs and implements,

• establishing village-based rice and cow banks,

• supplying health care services, and

• supplying livestock medicine and veterinary services

2. Capacity building for

improved livelihoods • functional/numeric

literacy training, • basic veterinary

training, • training in fruit tree

• Assessment reports • Progress reports • Midterm reports • Annual audits • Completion report

• Effectiveness and

efficiency of NGOs • Participatory approach

in use at all levels and participation from all stakeholders

Apppendix 2

15

cultivation and home gardening,

• training in food processing and bamboo processing,

• training in chicken and pig raising,

• skills training, • training in how to

establish and manage village-based cow and rice banks,

• participatory short-term planning exercises, and

• awareness creation for VDCs

Component 2 3. Confidence building and

counseling, through • mental health

education sessions (video education, house-to-house visits, group discussions, school presentations, pamphlets, and posters),

• mental health training for community resources and

health staff, • counseling for

traumatized individuals and families,

• identification and formation of self-help groups of people with similar problems, and

group therapy

Component 3 4. Community-based

participatory monitoring

Component 4 5. Overall project

management and administrative support

16 Appendix 2

E. Inputs Level of Effort

International consultant (Australia Volunteers International)

Costs

1. Consulting Services 2. Revolving Fund 3. Supplies 4. Civil works 5. Training, workshops,

seminars 6. Project management 7. Other project inputs 8. Contingencies 9. Total JFPR Budget

36 person-months 1. 155,000 2. 148,800 3. 432,400 4. 0 5. 387,600

6. 352,760 7. 254,640 8. 68,800 9. 1,800,000

• Implementing agencies

(IAs) research outline and work plan

• IAs’ weekly progress

reports • Project accounts

• Appropriate and timely

selection of NGOs • Timely recruitment and

deployment of competent consultants

• Good coordination

among IAs

COMMUNITY-RECOGNIZED CATEGORIES OF POVERTY

JFPR BENEFICIARIES NON-JFPR BENEFICIARIES Very Poor Poor Medium Better-Off

State of Mind • No hope, no way out

• some hope in life • can cope with difficulties • have to struggle very hard

• more prepared to face the market

• problems and risks existing, but can cope

• courageous and happy • more advanced to face

the market

Food Security Daily basis up to 6 months/ year 9-10 months/year Marketable surplus Economic Characteristics

• numerous agricultural and non-agricultural economic activities as coping strategies

• high dependency on forest products

• high dependency on wage labor

• high dependency on production and sale of simple products

• no adult male labor • no access to credit

• rice production • numerous agricultural and

non-agricultural activities as coping strategies

• at least one adult male laborer available

• high dependency on forest products

• low dependency on wage labor

• limited access to moneylenders

• rice production • horticulture • livestock production • no dependency on forest

products • hiring labor • access to credit

• rice production • horticulture • livestock production • no dependency on forest

products • trading of surplus • access to credit

Material Assets • no land or just 0.5 hectare (ha)

• no draft animals • no cattle • small thatch house • few household utensils

• 0.5-2 ha of rice land • maybe draft animal • small wooden or thatch

house • maybe fishing boat and

tools

• 2-5 ha of land • draft animals and cattle • thatch or wooden house,

good condition • television, motorcycle,

bicycle, radios • rice mill • fishing tools of high quality

• more than 5 ha of rice land

• more than 5 cattle • wooden house in good

condition • TV, radio, motorcycle • access to fertilizer • hand tractor

Distribution Within Recently Settled Community

15% 55-60% less than 30% few, if at all

Older Established Community

less than 15% less than 30% 45% 10-15%

18 Appendix 4

DESCRIPTION OF JFPR PROJECT BENEFICIARIES 1. Female-Headed Households. The Cambodian concepts of female-headed households and war widows are not simple. Each household has a different reason for calling someone its head, and in Cambodia there is no distinction between the categories of widows, divorcees, separated women, and unmarried mothers. A “widow” in Cambodia is a woman who has been married, but who has lost her husband by death, abandonment, or other reason. The common characteristic is the lack of a male member in the productive age group. War widows are the biggest subgroup of female-headed households in Cambodia, the percentage depending on the age group: More than half of the female household heads are widows in the age group above 50 years old. Female-headed households and war widows share many characteristics that make them more vulnerable both physically and psychologically than other groups. More than half of the female household heads are lifetime migrants, the main reasons for migration being natural calamities, insecurity, and search for work. The literacy rate of female household heads is lower than among women of the same age group who are not heads of their households. Even when the female heads are employed, they are mostly self-employed or own account workers.1 This type of work is uncertain and without any social benefits. House ownership is slightly lower for female-headed households, renting and rent-free being slightly higher as compared with male-headed households. Among the richer households, the female-headed ones appear to be well represented; among the poor households, the female-headed ones appear also to be the poorest. Family members of female-headed households are victims of a vicious cycle: In fact, school enrolment of children from male-headed households is higher than from female-headed households, and the labor force participation rates of children in female-headed households are higher than of those from male-headed households. Women have faced extreme threats to their personal security during and after wartime. They usually do not have access to arms to protect themselves and are often left alone to take care of the children and families. Furthermore, women have suffered the physical, mental, and social trauma of rape and sexual violence during wartime and of violent and alcoholic husbands once they have returned home from the war. The challenges faced by women are exacerbated by the death or disappearance of the husband. They find themselves permanently alone with a huge economic burden. Women are unable to express their fears due to the responsibility to protect their children, and they are denied the opportunity to deal with the psychological wounds of war. These wounds erode their ability to cope, undermining their planning skills and confidence to take active participation in the development process and to ask for assistance from others. 2. War Widows. The subgroup of war widows suffers from higher food insecurity within the female-headed households group, resulting from long-term military employment. The effects of this are dependence on military food, combined with conditions that are not conducive to acquiring agricultural land. When the soldier-provider dies, the military food supply stops and the dependent families have limited options for feeding themselves. Adult literacy levels lower than the national average, a low level of marketable skills, higher than average vulnerability to health problems, obstacles to access to agricultural land, and difficulty in accessing affordable credit exacerbate the situation. In addition, women, because of their role as caregivers, cannot take on an additional role as a full-time income earner. After the death of the soldier the financial problems force many families to move in with relatives or to migrate to urban areas, seeking paid labor rather than continuing subsistence farming. 1 Self-employed workers may be divided into two groups: Those with and without paid employees. Those without

paid employees are described as own account workers. Those without paid employees are described as own account workers. The majority of self-employed poor women in Cambodia are own account workers engaged in trade and production for the market.

Appendix 4

19

3. Widows. Widows stand out as one of the most vulnerable groups in rural Cambodia. They are seen as poor in terms of (i) rice and household assets; (ii) energy, i.e., physical energy and labor power; (iii) access to information and knowledge; and (iv) access to decision-making networks. 4. Children. Children under the age of 15 make up 43% of the population, and children under the age of 7 make up 21%. Children and adolescents are among the most vulnerable within the families: They have seen and grown up with the violence of the war and of the refugee camps. They have not known any other type of society, and they will play a crucial role in the reconstruction of the future society. The attitudes and behavior of traumatized parents in reaction to trauma and stress are passed on to children who have not themselves experienced the same trauma. 5. Disabled People. A further legacy of war is that many Cambodians are not able to fully participate in development activities because of war-related injuries and disabilities, making many households vulnerable to poverty. In rural areas, one of the principal causes of disability for males is related to war and conflict; the principal cause in the project area is land mine explosion. The overall trend of casualties is one of decline because of the decreasing number of casualties among military people. The current incidence rates remain relatively high for peacetime, especially among civilians (of whom 53% of the victims are male adults and 41% children) due to the clearing of land by returnees and people resettling in their old areas. All the target districts are among those with the highest number of casualties, and the disabled person prevalence rates are higher than the national average. 6. Demobilized Soldiers. The Government initiated a program for the partial demobilization of its armed forces (31,500 soldiers in 4 years) that involves registration, demobilization (including disarmament), reinsertion, and reintegration. Upon discharge, the demobilized soldiers receive a standard allowance of $300, 120 kilograms of rice, a household kit, and some housing support. They will most likely settle in the approximate vicinity of their former units. For historical reasons, the project area will be the place of resettlement of many demobilized soldiers, in addition to internally displaced persons and refugees. This is why reconciliation and reintegration are important issues the communities will have to deal with. 7. The Very Poor. The very poor are characterized by daily food insecurity. They employ a wide range of coping strategies that have been developed over years. They are expert in survival. Sources of food, income, support, and means of survival of the rural poor in Cambodia include cultivation of land, domestic livestock, casual labor, home gardening, common property resources, hawking, contract outwork, child labor, domestic service, mutual help, indentured labor, migration, handicrafts, mineclearance. The very poor have the urgent need to feed their families every day and seek immediate results from their efforts. Because of their weak bargaining position, they are often exploited in these transactions. While the very poor are an integral part of the village economic system, they are often excluded or exclude themselves from the social, cultural, religious, and political fabric of their community.2

2 Simmons, Mal. and Ruth Bottomley. 2001. Working With the Very Poor. Phnom Penh: Krom Akphiwat Phum.

20 Appendix 5

NONGOVERNMENT ORGANIZATION SELECTION CRITERIA 1. The selection criteria for the nongovernment organizations (NGOs) will include (i) the role of the institution: the mission of the organization should relate to poverty reduction, community development, and conflict resolution; (ii) human capacity: the availability and composition of professionals for the tasks planned, number of staff, level of staff competence, experience, and commitment; (iii) relevance of knowledge, experience, and size in relation to the proposed project: past experience and professional capacity in rural Cambodia in the field of the proposed project; (iv) working with target beneficiaries: institutional capacity to target the most vulnerable poor households and communities, women, youth, and other disadvantaged groups; (v) audit reports, adherence to audit requirements and procedures, and transparency in financial management and performance monitoring; (vi) reporting systems: capacity to submit timely reports; (vii) track record in project and program implementation: past record in program implementation and results in managing funded programs; and (viii) fair representation of female staff. 2. In addition, the implementing agencies (IAs) for the livelihood support should have (i) practical experience in community development within the concerned project district, and (ii) adequate capacity proven through implementing similar projects. The IAs for the psychosocial support should (i) have practical experience in mental health and psychosocial activities within the concerned project districts, (ii) demonstrate technical expertise in working directly with communities and people in the rural areas, and (iii) have adequate and proven capacity in implementing similar projects. The managing IA should have (i) practical experience in working with other international and local NGOs in the project area; (ii) adequate and proven capacity in managing similar projects; (iii) adequate and proven capacity for promoting cooperation and collaboration among IAs; (iv) management capacity: commitment and enthusiasm of the manager/s, reliability of the management system, and existence and effectiveness of budgeting and control systems; (v) a suboffice in the project area; and (vi) physical assets: suitable offices, vehicles, equipment, and other physical facilities necessary for program implementation. 3. The selected international and national NGOs will (i) provide technical and material support for production support programs for the poor of the communities; (ii) provide technical and material support for capacity building of the beneficiaries in various livelihood activities; (iii) provide confidence-building and counseling programs for the most traumatized groups of poor and very poor; and (iv) ensure proper implementation of participatory appraisal, management, and monitoring.