|Status of Implementation Progress (Outputs, Activities, and Issues)
The Royal Government of Cambodia (RGC) signed the TA letter on 17 December 2009. ADB selected South Asia Management and Engineering Services (SAMES) to provide 18 months of consulting services (which was later extended to 19 months). The consultant team of one international and one national specialist began work on 19 April 2010 and recruited two full-time community facilitators based in Prey Veng in May 2010. Services were concluded on 18 November 2011 with the submission of a final report and a draft income restoration program (IRP) handbook. The TA closing date was extended from October 2011 to June 2012 and later to December 2012. The community Savings and Credit Groups are implementing a 6-month plan that included directly hiring an NGO community facilitator to provide intermittent follow-up support to them.
Progress under Output 1, capacity development for executing agency and line ministry officials, independent resettlement professionals, and civil society organization staff (as of June 1, 2012):
This output included short and long-term training, national and international study tours, and the drafting of a handbook for income restoration programs. To implement the capacity development plan (DMF activity 1.2 & 1.3), a partnership was established with the Royal University of Phnom Penh's Graduate School of Development Studies. The TA supported a short-term certificate program in the design and management of income restoration programs (IRPs) for 68 participants. Of these, 12% were from the Resettlement Department of the Ministry of Economy and Finance, 29% were officials of sector line ministries that implement projects with resettlement impacts, 26% were from civil society organizations, and 19% were independent professionals. The remainder were from other ministries (e.g. Interior, Social Affairs) and the United Nations agencies' offices in Cambodia. The program was delivered in two rounds in February and August 2011 and October and November 2011. The second round's revised structure incorporated lessons learned from the first, including group assignments as opposed to individual assignments, more use of NGO experiences as case studies, site visits, and better alignment with the proposed IRP handbook (DMF activity 1.4).
Through scholarships and refresher training, the TA expects 16 students to complete RUPP's long-term graduate degree program in development studies. Seven enrolled in 2010, 3 dropped out to pursue studies overseas, and 12 enrolled in 2011. Two students are NGO staff, 3 are independent resettlement specialists, and the rest are from RGC ministries. Achieving gender balance was not possible, with only 3 women enrolled.
The capacity development plan also included international study tours, with 7 officials from the Inter-ministerial Resettlement Committee visiting resettlement and income restoration programs in the Philippines in November 2010 and Yunnan province of the People's Republic of China in March 2011.
The consultants prepared a draft handbook on IRPs based on a literature review of IRPs (DMF activity 1.1), the short course training materials, site visits, and multi-stakeholder consultation workshops including resettlement professionals and NGO staff on 13 September and 16 November 2011. It was not possible to finalize the handbook (DMF activity 1.5), which requires substantial reorganization. ADB staff will finalize the handbook in Q4 2012, upon which there will be further discussion with the Inter-Ministerial Resettlement Committee.
Progress under output 2, the IRP in Prey Veng (as of September 1, 2012):
The IRP was designed for 63 affected households and comprised (1) restructuring affected people's crippling household debts, (2) setting up community-managed savings and credit groups, (3) offering a mix of community-based, vocational training center-based, and enterprise-based training, and (4) disbursing new supervised credit for productive investments. The first element was very challenging and is not typical of normal IRPs in that it was a remedial action undertaken long after displacement originally took place.
To inform and monitor the IRP, detailed socio-economic baseline data was collected in May-June 2010. A concurrent community resource assessment identified household and local resources, production systems, occupations, markets and development opportunities in the area. Analysis confirmed that much of the poverty among the 63 households could not be attributed solely to displacement and relocation, given external issues such as health crises or the impact of the food, fuel, and financial crises over the period 2008-2010. However, the poverty incidence among community members was well higher than the national average. In May 2010, 59% of households had incomes below the national poverty line (significantly higher than the average poverty incidence in rural Cambodia of 35%). Community leaders designated 12 households as particularly destitute, e.g. those with elderly, widowed, chronically ill, or disabled heads of household, lacking able-bodied labor. In September 2011 a second field study of 50 households found that the poverty incidence had fallen to 18% of households, significantly lower than the national average. Subjectively, 37 households felt they were better off, 5 felt there was no change, and 8 felt worse off. The main reason given feeling worse off was receiving only small amounts of debt relief (see below).
The income restoration program:
1. Debt restructuring. This effort began with an update of the loan ledger originally prepared by the NGO CDCam, detailing each household's debts and multiple creditors (often with incomplete documentation). The debts were analyzed to distinguish between distress debt, e.g. in some way related to relocation, making interest payments, or health shocks (97% of the nearly $50,600 total household debts), and economic debt, e.g. that taken for productive purposes, mostly low-interest loans from micro-finance institutions (just 3% of total debts). On average, households owed $811 each, but the actual debt amounts varied greatly, ranging from $50 to more than $3,000. A complicating factor was that some households had managed to pay back some or most of their debts of their own volition over the preceding years, sometimes through the sale of assets, especially land.
Two full-time community facilitators, one seconded from the NGO PADEK, were based in Prey Veng. Over the period of May to September 2010 all debts were repaid to creditors on behalf of the households, with the intent that the amount would be paid back to the community savings and credit groups, once established, thus keeping the funds within the community. The debt of the 12 destitute households was cancelled. When it became clear that many households were opposed to making payments to the savings and credit groups, and in light of the fact that 97% of the restructured amount was distress debt, the TA team recommended writing off the debts completely, providing each household a debt-free clean slate from which to rebuild their livelihoods. ADB approved this in December 2010.
Unfortunately the TA team's recommendation only had partial community endorsement, and it created strife and dissatisfaction among community members who perceived that some had benefitted more from the debt cancellation than others. The debt restructuring exercise uncovered a lack of cohesion and mutual distrust among community members. Various factions sent different requests to ADB, with each accusing the others of various wrong-doings. The community leaders requested that ADB deal only with them, and not listen to community members. A long process of negotiation, facilitation, and clarification ensued, under a new TA team and with the support of the NGO CDCam. In the end, a solution was facilitated and all community members signed a Memorandum of Understanding, with the final resolution that
a) all households who received less than $400 total would be topped up to $400. A total of $5,000 would be required for this.
b) the community would raise $2,000 from among the households who received in excess of $800.
c) $3,000 of the remaining new credit funds would be converted to grants to make up the total $5,000 required.
d) the remaining credit funds would be retained to support micro-enterprises or second-cycle loans to borrowers who settled their first loans.
2. Savings and Credit Groups. The community leaders initially agreed to create two SCGs, one for each village, to manage community funds. Regular savings were a condition for membership. SCG rules and regulations were established, and community facilitators trained the board members in credit management, book-keeping, and other technical skills over the period January to May 201. Later, the two SCGs merged into one, but with three different sub-groups. Group savings was performing reasonably well in December 2011, with more than $720 in savings. On 15 November 2011 the SCG received its license from the Ministry of Interior, witnessed by the village chief and a commune council representative, who reminded SGC members of their repayment obligations.
3. Training. A mix of voluntary community-based, vocational center-based, and enterprise-based training was offered to community members. Community-based training for household heads, spouses, and other adult members included positive mindset and life skills training, household finances & debt management, small business skills, literacy, and agricultural extension training (e.g. chicken & livestock rearing). A total of 48 households opted to participate in one or more of the programs. All 18 female-headed households participated.
While 30 young people were identified as candidates for vocational training courses and registered for courses in motor repair, tailoring, and hairdressing and beauty at the Prey Veng Basic Skills Center, only 18 trainees ultimately completed the 4-month residential courses. Those who dropped out cited a number of reasons including that the center was too far from home (despite allowances for weekly home visits), they had to give up work opportunities (at about $2.50/day), the subsistence allowance was insufficient (at $1.50 per day), or they did not see the value of the course.
An enterprise-based job placement program was also offered to provide professional work experience and training. Six-month paid apprenticeships were arranged with local enterprises in Neak Loeung town. A total of 18 young people participated (of whom 9 were graduates of the Prey Veng vocational training programs). Trainees were provided with a monthly salary and daily food and travel allowances. In most cases, trainees opted to purchase bicycles with their travel allowance. The reasons given for why more young people did not participate was that they were studying, already had jobs, were married, sick, or planned to migrate to the city for work.
4. New credit. Following the training for SCG board members, $30,000 was made available for new credit, i.e. supervised micro-loans in support of income generation activities. For the 12 destitute households, grants were given instead of loans for the same purpose. As of end December 2011, $22,150 has been disbursed for items such as motorbikes, agricultural inputs, livestock, sewing machines, expansion of petty trading, and so on. Unfortunately, interest payment has been poor. Of the $1,740 due by October 2011, only half was repaid. Some borrowers are juggling other loans and repayment of the community loan is their last priority. Others feel that they were cheated out of debt relief and threaten not to repay SCG loans. Still others have adopted a wait and see attitude before they repay the community loans. Some complained of the heavy-handed approach taken by the SCG officers who came to collect. It became clear that further support and facilitation was required. A contract variation and reallocation of remaining TA funds allowed a direct transfer of the $7,000 in remaining credit funds to the community groups, who prepared a 6 month plan that included direct hire of an NGO community facilitator to provide intermittent follow-up support to the savings and credit groups until the TA closure date. The TA final review mission planned for November 2012 will examine the implementation of the 6 month plan.
Lessons from the implementation of TA 7366 include that:
1. Income restoration planning (including detailed household data collection) needs to take place as early as possible in the resettlement process, and in any event well before people have to move.
2. To maximize benefits and sustainability, IRPs should (i) be based on community resource assessments, (ii) be linked to other poverty reduction and livelihood interventions in the area, and (ii) involve local authorities in the planning stages.
3. IRPs need to offer individually tailored solutions for different categories of affected households such as rural land- or agriculture-based solutions, rural off-farm options, solutions for landless urban poor, and so on.
4. NGOs have a vital role to play in IRPs in community engagement, participatory planning, community organization, facilitation, problem solving, and longer term support.
5. The cost of preventive measures is far lower than remedial action.
Social Issues (from TA Report)
Along Highway 1, a number of families who were resettled when the highway was improved in the early 2000s found themselves in a vicious cycle of poverty and indebtedness, with no stable livelihood sources. Borrowing from informal moneylenders was a primary coping mechanism in the Stung Slot and Kraing Khok communities, particularly in the face of delayed and discounted compensation payments when resettlement originally took place. Many families owed unmanageable debts to loan sharks at usurious rates, often as high as 10% per month (at which rate the loan amount effectively triples in just 12 months). Some risked losing their resettlement site plots as a result, while others had already sold their plots to repay debts. A 2008 post-resettlement audit found that linking the affected households' debt problems only to the mistakes of resettlement was overly simplistic, as people were very poor to begin with, barely earning enough to support their families, and were highly vulnerable to shocks. It is also evident from the Cambodia Socio-Economic Survey that a large proportion of Cambodia's poorest (most of whom have not been resettled) are highly indebted. But it is clear that resettlement was a major shock, and some of the affected households have not recovered. The resettlement audit recommended a livelihood stabilization program for 63 households in the Stung Slot and Kraing Khok communities of Prey Veng province. The audit found that affected households lacked (i) the understanding and skills required to take part in cash-oriented productive activities (such as providing goods and services to road users), (ii) the assets and capital necessary to engage in productive activities, and (iii) the support needed to collectively address the root causes of their poverty. The income restoration program was designed to address these 3 issues.