Village development in the Lao PDR Case Study Click on the following links for further information about this case study: Teacher's Notes Student Activities   Background The Lao People's Democratic Republic (PDR) is in South East Asia. It lies between Vietnam to the east, China to the north, Cambodia to the south, Thailand to the west and Myanmar to the north west. The country's most valuable resources are its forests and rivers. The rivers have the potential for generating hydro-electric power. It is a mountainous country with southern Laos being less hilly but still rugged. Despite serious deforestation, some 45% of the country is still forested. Deforestation is caused by logging, hydro-electric facilities and slash and burn agriculture. The most important of Laos' many great rivers is the Mekong River which runs the entire length of the country and its fertile plains provide the major agricultural lands in the Lao PDR. Crops generally rely on the monsoonal rains during May to October. Laos was granted full independence from France in 1954. There was prolonged civil war throughout the 60s and the Lao people were involved in the war in neighbouring Vietnam. Peace was restored to the Lao PDR in 1973. The Lao PDR is one of the poorest countries in the world with per capita income around US$330 in 1998. The major economic activity is farming. Most of the people operate within a subsistence economy based on upland rice cultivation and foraging of forest products. In 1995, 22% of the population had fallen below the food poverty line (defined as the level of income sufficient to buy 2100 calories per person per day). The south of Lao PDR is much poorer than the centre and the north. In the south, there are widespread rice shortages and families planting upland rice are experiencing declining yields. The Government is also trying to conserve the environment through reducing slash and burn practices. This policy affects rice production because the villagers have to learn new methods of growing rice.   Most people in the Lao PDR operate within a subsistence economy based on upland rice cultivation.   The Government is trying to develop a market driven economy. When capital is available for investment in traditional production activities such as livestock, alternative crops or weaving activities, villagers are keen to expand the scope of their activities to increase income as well as food production for family consumption. Australia's role The Australian Government provided funding from 1991 to 1997 for the Integrated Village Development Project (IVDP) in two central districts of Sayaboury Province. At the same time, Save the Children Australia and Bread for the World funded a similar project in four districts of Bolikhamxai Province. The Integrated Village Development Project aims to improve the quality of life of poor rural communities and to strengthen village capacity to plan and manage local development activities. Two phases have been completed. Recommendations from the first two phases resulted in a third phase in which the two projects were combined to maximise the sharing of technical inputs and experiences in the provinces. The project, to be implemented over three years by the Lao Women's Union (LWU), will benefit whole communities, including poorer village households and women and their children. Out of a budget of AUD $1 053 846 over three years, the Australian Government will fund AUD $753 846. Achievements of phases one and two The project has had a dramatic impact on the lives of thousands of families. Food security has clearly been enhanced through opportunities to expand rice and other crop production. This had been possible as a result of loans for buffaloes, rice and agricultural tools, and the construction of irrigation systems. Increased rice paddy production has reduced the area of land once used for swidden rice and there is evidence hillsides are now being planted with cash crops. Rice banks have also contributed to enhancing food security by dramatically decreasing the amount of rice paid by families as interest to private lenders for rice loans during the production season, allowing families to keep more rice for family consumption.   Increased vegetable production has expanded the amount of food available to families creating opportunities for income generation.   Poultry and fish raising activities together with the introduction of fruit tree crops have expanded the amount of food available to families and created opportunities for income generation. Construction of wells, gravity feed, water systems and latrines have made life healthier, enabling people to work more productively. The construction of village water supply systems and provision of loans for village rice mills have freed women and children from back breaking labour, giving them two to three hours more per day for production activities. Loans for income generating activities such as weaving and the production of crops such as jute, soya beans and bananas are increasing the levels of income for family members. Needs for phase three At the completion of the first two phases of the IVDP the following needs were identified. These have formed the focus of Phase Three which is to be completed during 2001. Many families have broken the cycle of poverty but it is clear that the poorest families and communities are unable to access all but the smallest loans because they have no resources through which to repay a loan should the new enterprise fail. Success of new income generating activities is limited by the villagers' lack of understanding of the technical requirements needed to maximise production. Villagers also need to understand market requirements and the benefits of reinvesting profits rather than spending them on non-productive consumer items. At the village level there are weaknesses in management. Although women are managing weaving and small animal revolving funds, they do not appear to be playing a leadership role on committees which manage the larger funds. Integrated Village Development Project (Phase III) The specific purposes of the project include: to develop the capacity of rural communities to mobilise savings and successfully manage group credit schemes for income generation, food security and agricultural production activities to improve agricultural, fisheries and handicraft production techniques and the marketing skills of rural producer groups to enhance communications, leadership training, critical analysis and planning, monitoring and evaluation skills of LWU Project management teams, line department staff and village level workers to efficiently and effectively manage the project in a way which meets project objectives and targets and which promotes learning and participation at all levels. The project will have a direct impact on the communities of 198 poor villages. The villages were selected using criteria of high poverty levels, the presence of more disadvantaged ethnic minority populations, and being a part of a cluster of project villages. Top © Commonwealth of Australia