Regional : Greater Mekong Subregion: Livelihood Support for Corridor Towns

Industry and trade / Industry and trade sector development

Poverty in the Greater Mekong Subregion (GMS) is still substantial in Cambodia, Lao People's Democratic Republic (Lao PDR), and Viet Nam, where its regional incidence ranges from 9% 34% of the population. Poverty in Cambodia is wide spread with approximately 30% of the rural population living below the poverty line. From 1992 to 2007, the overall national poverty incidence in Cambodia declined to about 36%, which is still a high value by regional comparison (i.e., Viet Nam''s fell to 20% and Thailand''s 12%). The distribution of poverty varies considerably in Cambodia, from less than 15% in the capital city to well over 45% in the northern and northeastern provinces and in the vicinity of Tonle Sap. In Battambang, the poverty incidence in 2009 was at 18%, slightly higher than in Phnom Penh (15%) but lower than the approximate national poverty incidence of 36%. Urban poverty also differs from rural poverty because the reference values in cost of living differ between urban and rural areas. Poverty in Lao PDR is still widespread with an estimated 34% of the population living under the poverty line and a large proportion of the population at risk of sliding back into poverty. In the Savannahket Province where Kaysone Phomvihane is situated, the reported poverty incidence is at 43%, higher than the national rate. Kaysone Phomvihane is also listed among the poorest districts in the Savannahket Province. Poverty is predominantly rural, with high concentrations in the remote and mountainous northeastern and eastern borders with Viet Nam, and, therefore, has a strong ethnic character. Viet Nam's progress towards reducing poverty has been impressive with the poverty incidence declining from 58% in 1993 to 10.6% in 2010. Urban poverty in Viet Nam fell from about 25% in 1993 to 4% in 2006. Rural poverty in the same period declined from 66% to 22%. However, while reductions in urban poverty in Ha Noi and Ho Chi Minh City tend to skew national averages, cities outside the major growth corridors, including those in the central provinces (Dak Lak, Pleiku, etc.), the Mekong Delta (Kien Giang, Soc Trang, etc.), the northern border (Cao Bang, Lao Cai, etc.), and the central coast (Hue, Quang Tri) still have relatively high urban poverty rates. In Dong Ha City, poverty incidence in 2010 is at 8%, higher than the national urban poverty incidence of 4%, and slightly lower than the overall poverty incidence of 10.6% in the same year.

The proposed project is a pilot poverty-reduction project in the GMS using a market development approach intended to compliment the urban infrastructure investments under the three loan projects. Trade, traffic, tourism, and people flow are perceived to significantly increase in the East-West Economic Corridor (EWEC) and Southern Economic Corridor (SEC) because of the infrastructure investments under the three loan projects; the project aims to capitalize on these developments by helping poor informal traders enhance their locally-produced products and provide aesthetically attractive, environmentally sound, socially inclusive, and gender-responsive trade centers to market these products.

1. Construction of small markets (trade centers) in three project towns completed

2. Microfinance support for market vendors in three project towns

3. Training and awareness campaigns completed

4. Project management, monitoring and audit services established