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"Community-Driven Development and Inclusive Growth"

Keynote Address
Bart W. Édes
Asian Development Bank

At the International Conference on Community-Driven Development and Rural Poverty Alleviation

18 October 2009
Beijing, People’s Republic of China

Thank you, Madam Chair.

It is a pleasure to be here this morning with such a distinguished group of development practitioners from the People’s Republic of China (PRC) and abroad. I join earlier speakers in recognizing the Leading Group Office of Poverty Alleviation and Development (LGOP) for initiating and hosting this stimulating program. The Asian Development Bank (ADB) is proud to be a partner with the LGOP in the implementation of eight technical assistance projects over the years.

The topic of my presentation is community-driven development (CDD) and inclusive growth. I will also provide an overview of the ADB’s growing experience with – and lessons from - CDD approaches, as well as some reflections for the scaling up of CDD activities in the PRC.

By now, we now we have a pretty good idea of what CDD is about, so let me begin by briefly explaining what I mean by inclusive growth. Inclusive growth allows all members of a society to participate in, and contribute to, the growth process on an equal basis regardless of their circumstance.¹ This means that not only do they enjoy the fruits of growth, but that they are also active in choosing how that growth occurs.

Inclusive growth has received increasing attention in recent years as we have come to realize that although spectacular growth in the Asia-Pacific region has lifted hundreds of millions out of poverty, it has also led us to a state of increased inequality in most countries. Even with high growth rates, large numbers remain vulnerable to poverty, with limited access to basic services.

The global slowdown has provided an opportunity to reflect. There are actions that we can take now to ensure that as economies pick up, they provide benefits to a wider range of people. Those who have been unable to participate in the historically unprecedented economic success story written by this region need to be included in the next leap forward.

Promoting inclusive growth requires us to lower barriers that limit the development of human capacity, and to provide everyone with the chance to utilize their skills. Concrete steps to ensure inclusive growth include strengthening laws so that people can generate and keep earnings and assets, and increasing public investments in social services and in infrastructure that opens doors to improved livelihoods and well-being.

Among the tools at a government’s disposal is CDD. The grassroots nature of CDD projects promotes fuller public participation in development decisions that typically are decided in a top-down fashion. Through CDD, those who earlier had no say in how public resources were spent in their community can prioritize and chose from among a range of local development activities. Poor women and ethnic minorities are often among those who stand the most to gain through CDD approaches. This method has proven to be efficient in delivering needed services and infrastructure to poor communities. It is also effective in helping communities and local governments to work together to prioritize needs, and help different groups within villages to cooperate to achieve harmonious growth.

CDD in ADB Operations

Recognizing CDD’s potential to address poverty and accomplish other objectives contributing to inclusive growth, ADB has supported a range of CDD interventions in this decade. Between 2001 and 2008, ADB funded 72 projects involving CDD elements to enhance delivery of inputs and beneficiary involvement. The projects, valued at nearly $4 billion, represented about 10% of the total number of ADB-financed projects approved during this period. More than one-third of the projects with CDD components were in the agriculture and natural resources sector. There were also several CDD projects in water supply and sanitation, waste management, education, and health. Geographically, the projects have been spread out from Southeast Asia to Central Asia, particularly in countries where the government has wished to invest in rural development.

These 72 projects feature at least some of the following traits:

• Project resources, usually block grants, are provided directly to local community-based organizations, village groups, or local government units with community representation.
• Communities or community-based organizations work with, or are authorized by, local government units to plan and implement project activities. As beneficiary or grantee, community-based organizations are given specific tasks: procurement of inputs, organizing labor, monitoring use of funds, managing contractors, and assuming operation and maintenance responsibilities.
• NGOs are engaged to undertake community mobilization and capacity building, and help build measures into the procedures to prevent corruption, ensure accountability, and enable timely and effective evaluation.
• Participatory appraisals and bottom-up planning mechanisms are introduced or strengthened so local communities, through community-based organizations, can provide monitoring and feedback for local government planning and budget allocation processes.
• ere in the PRC, a very innovative example of CDD has been ADB's work with the LGOP and other partners in Jiangxi Province. Supported by ADB technical assistance, a pilot project pioneered government partnerships with national and local NGOs, which facilitated village selection and implementation of development activities within the PRC's flagship grassroots anti-poverty program.

What we have Learned

The experience of ADB and other institutions that have supported CDD projects has led us to the following conclusions about such projects:

Require More Time, but Provide Bigger Pay-off. Because of the need to prepare communities and design multi-faceted poverty reduction components, CDD projects tend to take longer to implement than other, less participatory projects. But the economic returns are higher than non-CDD projects because of generally lower costs and longer project life.

Facilitation is Important. Third-party facilitators, such as NGOs, play a vital role in CDD implementation by supporting social mobilization and information dissemination – especially where behavioral changes are targeted – such as health and sanitation projects. NGOs are particularly helpful where it is necessary to reach isolated, ethnically diverse, or remote communities.

Support Ownership and Sustainability. CDD projects are particularly good for building small-scale community infrastructure, which typically is maintained by local residents themselves. Operations and maintenance are also better with CDD projects, as communities act on a collective interest to keep up essential equipment, facilities, and services.

Promotes Inclusion. CDD projects provide better poverty targeting than other types of projects, and generate higher participation by women and poor people. In addition, the temporary employment generated by CDD projects can be particularly helpful in difficult economic times by providing at least short-term work for those who have lost their livelihoods.

Considerations for Expanding CDD in the PRC.

In light of what has been learned from the use of participatory approaches in the PRC and in other countries, the following lessons could be relevant to the scaling up of CDD in this country.

Firmly Root CDD in a Broader Strategy. One-off projects usually support very small scale civil works (a few culverts, a single road extension, a bridge), and their economic impact is therefore limited. Increasing the number of communities covered would be greatly aided by a national program and budget framework aimed at substantially boosting the scale and scope of CDD operations.

Provide an Enabling Framework. CDD cannot be substantially expanded without devolving and clarifying responsibilities and accountability for disbursing funds to communities; formulating and field-testing related systems for funds disbursement; adopting sanctions for misuse of funds; and strengthening local government capacity. At present, financial management rules prevent the provision of poverty reduction funds from the central government directly to project areas.

Make use of Available Knowledge. Recent projects provide a ready-to-use stock of practical knowledge about designing and building upon CDD operations. There is no need to start from scratch. For example, we know how donors and developing countries can collaborate to offset high start-up costs and increase benefits by applying lessons from past experience. Development partners can also help pool resources behind a common country strategy and accounting framework to offer longer term, program-based financing.

Build Local Capacity and Institutional Linkages. Scaling up CDD requires that that community planning processes are linked with funding sources at the local level, or higher up the government hierarchy. Pursuing CDD approaches also requires adequate project management capacity at the local level to design, implement, monitor and evaluate projects.

Generate Understanding and Support. Government agencies and cadres are not convinced that farmers and poor villagers should manage funds and select projects to finance. Without a transformation in thinking toward decentralized decision making, CDD cannot grow.

Develop a PRC Version of CDD. While much can be learned from the experience of others, the PRC will ultimately shape its own version of CDD through further experimentation and capacity building. The prospects for making extensive use of CDD in the PRC are bright, as the concepts and practices of CDD find solid historical foundation in the country. The tradition of motivating the masses to solve their problems is a tenet of the PRC's development and anti-poverty strategy, and is central to all CDD approaches. The Law on Farmers' Specialized Cooperatives reflects the principle of farmer-managed institutions and could serve as a foundation of an institutional mechanism for CDD in the PRC. CDD can make an important contribution to bridging the rural-urban divide in the country.

ADB's Support to CDD in Asia and the Pacific

ADB has embraced inclusive growth as a strategic agenda under its Long-Term Strategic Framework, 2008-2020. The pipeline of our planned lending over the next three years is likely to include greater support for projects with CDD components. More than half of these proposed CDD projects are in rural development, supporting fiscal decentralization and rural finance, agriculture and natural resource management, and improved water supply and sanitation. About 10% of the CDD projects in the pipeline incorporate community needs into the design of urban sector development projects through, for example, slum upgrading, provision of housing, and improved amenities for urban poor people. Several of the projects are already part of national poverty reduction programs or decentralization programs for accelerated achievement of the Millennium Development Goals or post-emergency/conflict area rehabilitation assistance.

Specific areas where ADB is prepared to assist its developing member countries include:

Promoting CDD and its Link to Inclusive Growth. We will continue to provide support to dialogues, conferences, and studies on CDD. Such activities will take place in the context of country partnership formulation, ongoing exchanges with governments on development priorities, and regional knowledge sharing.

Financing Projects and Programs. We are working with governments to identify approaches to financing the expansion and scaling up of CDD operations.

Pursuing Research and Innovation. In seeking to better understand CDD and how it can best be applied, ADB will explore integrating CDD into program-based financing modalities, harmonizing donor assistance and accounting procedures, and using CDD frameworks to fast-track funds for social safeguards or social assistance. This includes streamlining and improving joint business processes to facilitate more rapid design and implementation of projects.

Conclusion

The vision of a Harmonious Society is embedded in the PRC's Eleventh 5-Year Plan for National Economy and Social Development. This vision is close to the concept of inclusive growth, as both point to a future in which the entire population can be well-off. CDD could make an important contribution to achievement of a Harmonious Society by providing new opportunities for poor people to enjoy the fruits of a growing economy. I hope that this landmark conference serves as a catalyst that stimulates use of this powerful development tool.

Thank you for your time and attention. I look forward to the presentation by Mr. Khan on Pakistan's National Rural Support Programme, and to learning from the other experiences that will be shared in presentations delivered this afternoon and tomorrow.