1web.undp.org/execbrd/word/Myanmar HDI Assessmen… · Web view7.12 Partnerships and Collaboration 23 8 Key Challenges and Recommendations 24 8.1 Programme Future 24 8.2 The Future

2 December 2005United Nations Development Programme

Human Development InitiativeMyanmar

Report of Independent Assessment Mission4 - 29 July 2005

Prepared for:United Nations Development ProgrammeRegional Bureau for Asia and the PacificOne United Nations PlazaNew York, NY 10017, USA

Prepared by:Independent Review Team

Robert Shaw (Team Leader)Øyvind Jaer (Member)

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Table of Contents

EXECUTIVE SUMMARY-----------------------------------------------------------------------------11 BACKGROUND----------------------------------------------------------------------------------62 INTRODUCTION--------------------------------------------------------------------------------63 CONFORMITY WITH GC/EB DECISIONS---------------------------------------------------74 THE POOR AND VULNERABLE IN RURAL MYANMAR---------------------------------85 SIGNIFICANT CHANGES SINCE THE 2004 ASSESSMENT MISSION----------------9

5.1 EXPANSION OF PROGRAMME SCALE-------------------------------------------------------------------105.2 HUMANITARIAN SPACE----------------------------------------------------------------------------------105.3 OFFICIAL ATTITUDES ON HIV/AIDS-------------------------------------------------------------------115.4 MICROFINANCE LEGISLATION---------------------------------------------------------------------------12

6 FOLLOW-UP ON 2004 RECOMMENDATIONS------------------------------------------127 ASSESSMENT OF PROGRESS OF PROGRAMME AND PROJECTS-----------------13

7.1 PROGRAMME SCALE AND BENEFICIARIES-------------------------------------------------------------147.2 PROGRAMME APPROACH--------------------------------------------------------------------------------157.3 SELF-RELIANCE GROUPS--------------------------------------------------------------------------------167.4 FINANCIAL PERFORMANCE------------------------------------------------------------------------------167.5 COMMUNITY DEVELOPMENT IN REMOTE TOWNSHIPS (CDRT)-------------------------------------177.6 INTEGRATED COMMUNITY DEVELOPMENT PROJECT (ICDP)----------------------------------------187.7 SUSTAINABLE MICROFINANCE TO IMPROVE THE LIVELIHOODS OF THE POOR---------------------197.8 THE HIV/AIDS PROJECT--------------------------------------------------------------------------------217.9 THE AGRICULTURAL SECTOR REVIEW-----------------------------------------------------------------217.10 THE INTEGRATED HOUSEHOLD LIVING CONDITIONS ASSESSMENT---------------------------------227.11 PROGRAMME MANAGEMENT AND INTEGRATION------------------------------------------------------227.12 PARTNERSHIPS AND COLLABORATION-----------------------------------------------------------------23

8 KEY CHALLENGES AND RECOMMENDATIONS----------------------------------------248.1 PROGRAMME FUTURE-----------------------------------------------------------------------------------248.2 THE FUTURE OF SRGS----------------------------------------------------------------------------------258.3 THE FUTURE OF MICROFINANCE-----------------------------------------------------------------------268.4 EXIT AND ENTRY STRATEGIES--------------------------------------------------------------------------288.5 IMPACT ASSESSMENT, LEARNING AND DISSEMINATION---------------------------------------------298.6 A VOICE FOR THE POOR--------------------------------------------------------------------------------308.7 PROGRAMME MANAGEMENT AND INTEGRATION------------------------------------------------------318.8 PARTNERSHIP AND COLLABORATION-------------------------------------------------------------------31

9 CONCLUSION----------------------------------------------------------------------------------33ANNEX (I) LOCATION OF UNDP'S HUMAN DEVELOPMENT INITIATIVE ACTIVITIES IN MYANMAR---------34ANNEX (II) HDI-IV PROGRAMME BUDGET (INCLUDING COST-SHARING)------------------------------------35ANNEX (III) MICRO-FINANCE SUSTAINABILITY INDICATORS---------------------------------------------------36ANNEX (IV) ASSESSMENT MISSION MEMBERS-----------------------------------------------------------------37Annex (V) Field Visits-----------------------------------------------------------------------------------------38

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List of Acronyms

CDRT Community Development for Remote Townships

EB Executive Board

FAO Food and Agriculture Organization

GC Governing Council

GFATM The Global Fund to Fight AIDS, Tuberculosis and Malaria

HDI Human Development Initiative

HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome

ICDP Integrated Community Development Project

IHLCA Integrated Household Living Conditions Assessment

NGO Non-Governmental Organization

SPDC State Peace and Development Council

SRG Self-Reliance Group

UN United Nations

UNCT United Nations Country Team

UNDP United Nations Development Programme

UNOPS United Nations Office for Project Services

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Human Development Initiative - MyanmarReport of Independent Assessment Mission, July 2005

Executive Summary

This report summarizes the findings, conclusions and recommendations of the 2005 Independent Assessment Mission for UNDP's Human Development Initiative (HDI) in Myanmar. The fourth phase of the programme (HDI-IV) began in early 2003 and is scheduled to end in December 2005. Its goal is to have a sustainable impact on poverty in the country. HDI-IV has six constituent projects, three of which provide broad support for community development and microfinance in 24 Townships, now being expanded to a further 40 Townships. The other three projects provide support in HIV/AIDS and research on poverty and the agricultural sector.

The Mission explored in detail the conformity of HDI-IV with the Governing Council/Executive Board decisions that frame UNDP assistance to Myanmar. It concludes that HDI-IV has been designed, and is being implemented, in full compliance with these decisions. The Mission is concerned that, despite the progress shown by HDI-IV, poverty and vulnerability across the country are growing. The situation justifies the expansion of HDI-IV to new Townships and also argues for an expansion of international assistance for humanitarian purposes. The Mission also notes that engagement with Government, approved for the Agricultural Survey and Integrated Household Living Conditions Assessment, could valuably be extended to other areas of policy dialogue on poverty.

The Mission reviewed both the follow-up action taken by UNDP on the recommendations of the 2004 Assessment Mission and the programme's progress over the twelve months to July 2005. Key findings include:

Progress on the planning and initial implementation of the HDI expansion to 40 new Townships has been excellent, well-conceived and rapid.

Outstanding progress has been made on reorienting HDI towards greater emphasis on livelihoods and income generation (the principal needs of the truly poor).

HDI now reaches 4,244 villages, and has roughly 1.9 million beneficiaries, one million of whom benefit particularly from heavy investments in community organization and training.

Physical and budgetary targets are being met satisfactorily. The two large community development projects have continued to make

good progress over the year in targeting and impacting the rural poor. The Self-Reliance Groups (SRGs) -- affinity groups of 15-20 women from

poor households -- are the heart of the programme's approach to community organization. These groups provide a voice to the poor, vehicles for savings and credit, and opportunities for skill development. The SRG model has continued to evolve over the last year, with involvement of mature groups in village-wide issues and natural resource management. However, HDI has made little progress on SRG sustainability.

The Microfinance project has continued to progress, now handling 145,000 active clients and being within reach of financial sustainability. The project faces a vast challenge on its long-term future, because of the prospect of government legislation on a legal and regulatory framework for the microfinance sector. Both the Microfinance Groups and SRGs have demonstrated clearly that "the poor are bankable".

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Overall, HDI-IV is making a substantial contribution to the alleviation of rural poverty in Myanmar, to empowerment of the target groups, and to income and gender equity.

The HIV/AIDS project has been completely refocused to provide support to the community development projects, and has been appropriately redesigned.

The Agricultural Sector Review has been completed with a major briefing for principal stakeholders.

The Integrated Household Living Conditions Assessment has made strong progress, and shows good promise as the major benchmark on the extent, nature and causes of poverty.

While HDI-IV has better programme integrity and cohesion than previous phases, there is still insufficient collaboration between the two community development projects, and between those projects and Microfinance.

Because of the vast nature of the challenge of poverty in Myanmar, UNDP needs alliances with other partners and support from other service providers. While there has been some progress this year, HDI-IV still has only limited collaboration with UN agencies, other donors, local and international NGOs, and the private sector.

Too little has been done to assess the impact of HDI-IV, to determine the cost-effectiveness of the programme components, and to draw general lessons from the overall experience.

The Assessment Mission report reviews the progress made by each of the six projects over the past year, as well as broader programme issues. The main section of the report summarizes the key challenges facing HDI-IV, and makes recommendations designed to improve further the programme's impact on the welfare of the poor in Myanmar.

Programme Future. With the grave humanitarian situation in rural Myanmar, it is essential that HDI-IV be continued without interruption. The Expansion Plan has made a promising start, while the issues of sustainability and an exit strategy for the original Townships need to be tackled. The Mission recommends:

The Government of the Union of Myanmar and the UNDP Executive Board should approve a two-year extension of HDI-IV, i.e. through December 2007.

Adequate funding (preliminary estimates suggest $25-30 million) should be made available for this two-year extension.

During 2006, UNDP should begin to plan a further phase for HDI and should articulate a systematic exit strategy from the 24 original Townships.

The Future of SRGs. SRGs are the key component of HDI's approach to community organization and are proving appropriate and successful. HDI-IV needs a clear plan to ensure the longer-term sustainability of SRGs. The Mission recommends that this plan should embrace:

Local support systems to provide technical assistance and training to SRGs after HDI withdraws. Possible sources for these services include local NGOs, groupings of people trained in HDI projects, and local companies.

The provision of additional credit to SRGs, perhaps through a fully institutionalised microfinance organization.

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The further encouragement of SRG involvement in village-wide issues. A plan to protect the autonomy and independence of the SRGs. An examination of possible ways to continue the support of village men for

the SRGs.The Future of Microfinance. The legislation on microfinance currently being drafted represents an opportunity for microfinance projects in Myanmar (including HDI) to resolve long-standing issues of institutionalisation, sustainability, access to additional capital, and expansion, provided that the legislation meets international norms and standards for the effectiveness and independence of the microfinance sector. The Mission recommends:

The international community should provide, as a matter of urgency, the technical assistance that has been requested by a Government ministry "to establish a microfinance law which is on a par with international standards, will best suit Myanmar microfinance operations, and will buttress their sustainability".

UNDP should hire an international consultant to advise on the future of the Microfinance project.

Exit and Entry Strategies. The Mission recommends that UNDP should articulate in writing:

An exit strategy from the 24 original Townships, designed to ensure that HDI withdrawal leaves behind the gains (especially the human skills and group capabilities) that have been achieved in these areas.

An entry strategy for the 40 expansion Townships, particularly focusing on efficiency to ensure that the benefits from limited resources can be spread as widely as possible.

Key elements of these strategies should be: a) replicability, particularly to spread some benefits of the programme to neighbouring villages and areas; b) efficiency, to emphasize the most cost-effective elements of the programme; and c) sustainability.

Impact Assessment, Learning and Dissemination. One of the greatest challenges facing HDI-IV is the lack of systematic documentation on the lessons learned from the programme, its impact and benefits, and their cost-effectiveness. The Mission recommends:

HDI-IV should urgently take steps to quantify its impact and benefits through a series of village case studies (perhaps done by graduate students) and regular comparison by field staff of the current situation with data originally collected in villages.

HDI-IV should initiate a series of cost-effectiveness studies of significant programme components.

UNDP should develop an information strategy for HDI-IV to allow knowledge about, and lessons learned from, the programme to be spread more widely.

A Voice for the Poor. UNDP is in a unique position to serve as a voice for the poor to represent their concerns to Government and to press for improved policies and practices to benefit the poor. The Mission recommends:

UNDP should evolve a strategy and capability to advocate at the national level pro-poor policies derived from its experience and studies. Examples include: policies to promote pro-poor agricultural growth; technical

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assistance on legislation for the microfinance sector; and policy recommendations likely to emerge from the analysis of the Integrated Household Living Conditions Assessment.

UNDP should make a final determination on the structure, lines of responsibility, functions, staffing and budget for its Policy and Planning Unit.

Programme Management and Integration. The Mission recommends: UNDP should actively seek greater collaboration between projects,

especially through regular exchange visits by staff, joint action on training of staff and production of training materials, and breathing new life into the pilot project in Dry Zone involving Microfinance and SRGs.

UNDP should assess decision-making in the community development project it executes directly and should test greater decentralization of appropriate decisions.

Partnerships and Collaboration. The overall goals of HDI-IV in tackling poverty in Myanmar necessitate UNDP to engage in a broader range of partnerships. The Mission recommends:

UNDP should actively explore closer collaboration with other UN agencies, e.g. with FAO on agricultural policy and development; with the Global Environmental Facility and the World Food Programme on natural resource management; and with UNICEF on health, education and water and sanitation.

UNDP should intensify its efforts to inform the diplomatic and donor community about the impressive results of HDI-IV and about policy constraints affecting poverty.

UNDP should take the lead in a more systematic effort to dialogue with local and international NGOs on issues affecting rural development, and arrange exchange field visits between HDI and NGO projects.

Conclusion

HDI-IV is continuing to build on its strengths and achievements. The three main field projects are highly appropriate and effective in tackling rural poverty among nearly two million people. The Expansion Plan is well conceived, has started rapidly, and shows great promise. The other three projects are now well placed to provide needed support to the field projects and to address policy constraints. Important challenges remain, including: i) the long-term sustainability of the gains; ii) using HDI-IV experience to impact policies positively; iii) improving programme efficiency to reach a larger number of people; and iv) enhancing the programme's capacity to assess impact and learn lessons.

The most disquieting finding of the Mission is the growing evidence of a trend of increasing poverty and vulnerability in Myanmar. This trend provides a strong justification for a continuation and expansion of HDI-IV. Specifically, the Mission recommends a two-year extension of the current phase, probably to be followed by at least one further phase.

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1 Background

This report presents the findings of the 2005 Independent Assessment Mission to review UNDP's Human Development Initiative (HDI) programme in Myanmar. The Mission's objectives were to:

a) Examine the extent to which UNDP assistance to Myanmar conforms with the decisions of UNDP's governing body;

b) Review the progress of HDI over the 12 months to July 2005 in meeting basic human needs in Myanmar, as well as the challenges and constraints the programme faces. The Mission was also asked to assess whether appropriate follow-up action has been taken to implement the recommendations of the 2004 Assessment Mission.

The Mission comprised two international consultants who carried out in-country work over the period July 4-29, 2005. The Mission members visited four HDI programme area (Delta, Rakhine, Kachin and Dry Zone): Annex (V) lists the field visits made. During these visits, the Mission had lengthy discussions with many villagers and community groups, UNDP staff and project personnel, and partner organizations. In Yangon, the Mission benefited from meetings with a number of international and local NGOs, other UN agencies, several individuals knowledgeable about the country, and seven foreign missions -- Australia, France, India, Japan, Singapore, the United Kingdom and the United States. It spent much time with UNDP and project staff, including the Agency Project Managers. During its final week in Yangon, the Mission held four debriefing meetings with representatives of foreign missions and donor agencies; local and international NGOs; UN agencies; and UNDP staff and Agency Project Managers.

The Mission's entire visit to Myanmar was exceptionally well organized. The Mission expresses its gratitude to the Country Office for its helpfulness and efficiency. The Mission especially appreciates the willingness of all people met to share their time, views and ideas with frankness and patience. The Mission gratefully acknowledges the assistance of the Ministry of National Planning and Economic Development, whose Minister met twice with the Mission and whose staff facilitated the field visits.

2 Introduction

Since 1993, UNDP assistance to Myanmar has been carried out in accordance with the Governing Council decisions 92/26 and 93/21 and Executive Board decisions 96/01, 98/14, 2001/15, 2003/2, 2004/2 and 2005/3. These decisions recognize that there are "critical humanitarian and basic human development needs" in Myanmar, and mandate that future UNDP assistance "should be clearly targeted towards programmes having grass-roots level impact in a sustainable manner".

Over the last 12 years, UNDP's country programme in Myanmar has consisted of four phases of the Human Development Initiative, all designed specifically to fulfil the mandate. All four phases have aimed to meet the needs of the target communities -- the rural poor -- by improving access to, and quality of, basic social services and by increasing incomes of the poor in a sustainable manner. The first three phases of HDI (1993-2001) largely comprised sectoral projects.

The current phase, HDI-IV, has placed a heavy emphasis on the mobilization and organization of communities, and a clear focus on the truly poor within the target

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villages. Its approach is inter-sectoral. This fourth phase was originally scheduled to cover the period 2002-4. After a significant delay in securing Government endorsement, the project documents for HDI-IV were signed between December 2002 and February 2003. During the hiatus between the third and fourth phases, considerable programme momentum was lost. Because the start of HDI-IV was delayed, its termination date was moved to December 2005.

With its design focusing on community organization and development, the core of HDI-IV comprises two large inter-sectoral projects, supported by four other projects.

1) The Community Development in Remote Townships (CDRT) project, aimed to strengthen the capacity of poor communities in remote border Townships.

2) The Integrated Community Development Project (ICDP), based on the approach pioneered by CDRT and drawing together inputs earlier provided by sectoral projects.

3) The Sustainable Microfinance to Improve the Livelihoods of the Poor (Microfinance) project, which has been operating for eight years in the same Townships as ICDP.

4) The HIV/AIDS project, which has now been redesigned to support CDRT and ICDP.

5) The Agricultural Sector Review, which has just been completed and was designed to identify pro-poor policies and define investment needs to stimulate broad-based agricultural growth.

6) The Integrated Household Living Conditions Assessment is an extensive survey to assess the extent and nature of poverty in Myanmar.

3 Conformity with GC/EB Decisions

During its discussions with UNDP and project staff and with diplomatic missions, the Assessment Mission explored in detail whether HDI-IV conforms with Governing Council decisions 92/26 and 93/21 and Executive Board decisions 96/01, 98/14, 2001/15, 2003/2, 2004/2 and 2005/3. It is absolutely evident that all components of the programme have been designed, and are being implemented, in such a way that “they are clearly targeted at having grass-roots-level impact in a sustainable manner”. The Mission considers that HDI-IV is having a highly positive impact on rural poverty in Myanmar, is wrestling seriously with the complicated issues of sustainability in a difficult environment, and holds much promise as a model for future efforts to address poverty in the country.

Despite the positive results from HDI-IV, the Mission is profoundly concerned by evidence (see Section 4) that overall levels of poverty and vulnerability in Myanmar have worsened since 1993. This fully justifies the expansion of HDI-IV that has taken place over the last year and argues for an expansion of international assistance to tackle poverty in the country.

While the basic GC/EB mandate does not explicitly mention Government, it has been interpreted that UNDP should not engage Government in efforts to improve the policy framework, which often adversely affects the poor and constrains, or even negates, the impact of grassroots projects. Some exceptions to this general lack of engagement have been agreed by the Executive Board. The Agricultural Sector Review, conducted by FAO, was concluded in June 2005 with a major

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briefing for Government Ministers and staff, representatives of bilateral donor and UN agencies, and international NGOs. Significant policy issues were brought up at this meeting, though it is not clear whether any specific changes are likely to emerge (indeed, policy change is only likely to occur as the result of sustained engagement on the issues). The Integrated Household Living Conditions Assessment is being conducted in conjunction with the Ministry of National Planning and Economic Development: it is likely to provide an invaluable study of the extent and nature of poverty in Myanmar.

But there are other areas in which effective policy dialogue between the Government and the international community is vital for the alleviation of poverty. Of most immediate importance is legislation to promote microfinance in the country. The Government is currently drafting legislation that will impact the existing microfinance projects of both UNDP and several international NGOs. The Mission believes that it would be highly desirable for the international community to offer technical assistance to enable the legislation to be as effective as possible in promoting the microfinance sector. This is important since it is arguable that improvements in the availability and transparency of rural finance would do more than any other single measure to help the rural poor. Beyond this specific example, the Mission considers that UNDP is well placed to serve as a Voice for the Poor. The Mission urges the Executive Board to authorize the Country Office to expand its role and capabilities in promoting pro-poor policies in Myanmar, building on the experience with the Agricultural Sector Review and the Integrated Household Living Conditions Assessment. Influencing Government to improve the policy framework would greatly benefit the poor in Myanmar and would contribute to sustaining the considerable advances made by HDI in helping the poor.

4 The Poor and Vulnerable in Rural Myanmar

Myanmar lacks reliable data on the extent, nature and causes of poverty. The Integrated Household Living Conditions Assessment, as a component of HDI-IV, will be of great value. This massive study of poverty has a sample size of 18,000 households across all States/ Divisions. Initial results of the data analysis are expected in early 2006. Pending the availability of these survey results, the Assessment Mission wishes to stress that the available evidence (sketchy though it is) and the Mission's own observations strongly suggest that rural poverty continues to grow in Myanmar. This reinforces the importance of the international community providing additional assistance to address the humanitarian situation in the country.

The Agricultural Sector Review notes that "the available data appears to indicate stagnant (agricultural) productivity growth and rising rural poverty since the mid-1990s". It also found that nearly half of all rural families are landless. Rural landlessness is continuing to grow as a result of population growth and the failure of marginal farmers to survive in the face of erratic prices for agricultural commodities and rising input costs. The rural landless and marginal farmers constitute the main elements of rural poverty in Myanmar, and are the proper focus of HDI-IV.

The Microfinance project regularly collects data on the prices of important commodities for the rural poor in the 11 Townships in which it works. These suggest that rural inflation in the 12 months to mid-2005 is just under 20 percent. The project also sporadically collects wage rates for casual labour in rural areas. These indicate that real wage rates have been falling since 1998 in the face of high rates of inflation. In Dry Zone, daily wage rates fell from 2004 to

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2005. In Shan State, nominal wage rates increased by 8 percent over the same period: with inflation of nearly 20 percent, real wage rates declined by about 10 percent. These estimates are consistent with the Mission's observations in the field. The Mission found wage rates varying between 30 and 60 U.S. cents per day, with some women earning as little as 10 cents a day. With incomes so low, it is not surprising that the average household in Myanmar spends two-thirds of its income on food (a very high proportion by international standards). Another consequence is that chronic malnutrition is widespread. A UNICEF survey in 2003 found that one-third of all children under five suffer from malnutrition, with higher proportions in rural areas.

The vulnerability of the poor is exacerbated by the burden of disease. Myanmar has the third highest rate of HIV/AIDS in Asia, with sentinel surveys in 2003 showing a prevalence rate of 1.25 percent. HIV/AIDS is spreading from high-risk groups to the general population, fuelled by high rates of migration to find work both within and outside the country. Myanmar has one of the highest rates of tuberculosis in the world, with nearly 100,000 new cases being detected each year. Tuberculosis resistance to multi-drugs is rising rapidly. Malaria is the leading cause of morbidity in the country, with 600,000 cases reported each year.

5 Significant Changes since the 2004 Assessment Mission

The activities of international agencies in Myanmar are influenced by a complex political situation that affects both the national environment for assistance and the attitude of international donors. Although concerns about deepening poverty and social vulnerability are growing, the complexity of the situation continues to constrain support for government programmes and broad capacity building. At the same time there has been growing appreciation by the international community in recent years of the need for policy dialogue and expanded assistance to stem the deteriorating socio-economic conditions.

Recent developments have altered the environment facing the international organizations in ways that impose new constraints and may possibly offer new opportunities. These include:

While some countries, mainly Western governments, have recently tightened sanctions, others, mainly from the region, are encouraging the national reconciliation process and increasing their engagement with both the government and civil society.

While the National Convention of May 2004 continued deliberations on a new constitution and also saw a period of improved working relations between the government and international organisations, October the same year saw a replacement of many key government officials. The National Convention went into recess. The military leadership assured the world that there will be no shift in policy direction.

The last ten months has seen the need to re-build relationships with government officials – many of them are new - something which has temporarily delayed some assistance programmes and also made access to the field more difficult for some agencies. Thus, the extent to which there is a real change in policy direction and not only a more natural hesitation and insecurity of new government people is a question.

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In addition to these political changes since the last Assessment Mission, four changes in HDI and the environment in which it works are of sufficient significance to merit explicit mention at the start of this report.

5.1 Expansion of Programme ScaleA massive geographical expansion of HDI-IV was approved by Government in March 2005 and has already been initiated in the field. Before that time, HDI-IV concentrated its activities on 24 Townships. 13 of these were Townships in remote border areas (Chin, Kachin and Rakhine) with relatively small and scattered populations, covered by CDRT. The other 11 Townships (in Delta, Dry Zone and Shan) had larger populations and were covered by both ICDP and Microfinance.

Under the approved expansion, HDI-IV is to begin project activities in a further 40 Townships, bringing the total to 64 Townships, one-fifth of the total Townships in the country. Annex (I) is a map showing the geographical distribution of the Townships now included under HDI-IV. 13 of the new Townships are to be covered by CDRT, 16 by ICDP, and 11 by Microfinance. In contrast to the situation in the 11 original Townships jointly served by ICDP and Microfinance, the two projects will work in separate Townships for the expansion.

By July 2005, UNDP had already initiated work in 29 expansion Townships, at least to the extent of opening offices and recruiting staff. Some fieldwork had also started, bringing the total number of villages supported by HDI-IV to 4,244 (c.f. 3,850 villages in August 2004).

Last year's Assessment Mission was fully supportive of the rationale and planning for the HDI expansion. This year's Mission is profoundly impressed by the speed with which the expansion has been initiated. The Mission recognizes that the expansion has been a major preoccupation of staff throughout the last year. It has also been an enormous drain on the time of senior staff, who have had overall responsibility for obtaining official approvals and the support of local authorities, recruiting and training staff, setting up offices and logistical support, planning baseline surveys, and initiating field activities. It is a considerable tribute to the dedication and hard work of these staff (both UNDP and project) that the expansion has moved so fast while substantial progress has also been recorded in other aspects of the programme.

5.2 Humanitarian SpaceDespite evidence of growing humanitarian needs in Myanmar, it is becoming more difficult for UNDP, many international NGOs and some other UN Agencies to provide humanitarian assistance. The "space" available for humanitarian work is being increasingly constrained.

In regard to recent Government actions, the Mission was told of numerous incidences of increased scrutiny of humanitarian programmes; problems of access by foreign staff of humanitarian agencies to certain areas of the country; insistence that Government personnel accompany both local and foreign staff on field trips, combined with the need for three weeks' notice of field travel; and requests for information on the background of local staff. It is not clear to the Mission whether these reports represent a change in Government policy or whether they are a consequence of uncertainty after many recent changes at the top levels of Government. The extent of the new restrictions seems to vary by Ministry and by area (with some local authorities being considerably more restrictive than others). Nevertheless, the changes have created a climate of uncertainty among humanitarian organizations, and especially among the local

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staff of those agencies. Moreover, the travel restrictions (if maintained) will make it impossible for humanitarian programmes to be continued in some areas of greatest need. During the Mission's fieldwork, there were numerous public calls for Myanmar to withdraw from the International Labour Organization.

The narrowing of the humanitarian space in Myanmar is vividly illustrated by the history of grants from the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria (GFATM). After a detailed investigation of the scale and impact of the three diseases in Myanmar, the GFATM Board approved nearly $100 million over five years to help address the threats these diseases pose, especially to the poor and vulnerable. When these grants were approved in late 2003, they represented substantially the largest amount of foreign assistance for humanitarian purposes in Myanmar in a decade. Because of the complicated and sensitive political situation, the UNDP Country Office was designated as the Principal Recipient for these grants, giving it prime responsibility for implementation.

The conditions for implementation of the GFATM programme in Myanmar became more difficult while the Assessment Mission was in the country. The GFATM took the decision to terminate the grants in mid-August, as implementation was starting. The reasons for this decision appear to be complicated. They include the concerns over field access to ensure transparency and effectiveness of the activities funded. But the rationale also includes concern that the progressive tightening of special safeguards (to ensure operational effectiveness while avoiding any hint of benefit to Government) was simply too onerous to be met. The tightening of the safeguards is attributed largely to the influence of a small number of advocacy organizations which believe that the three diseases can be tackled adequately, at least in the short term, by independent NGOs and international organizations.

During its time in Yangon, the Mission discussed the GFATM grants with a number of international and local NGOs as well as UN Specialized Agencies. The Mission found unanimous agreement among these groups on:

the seriousness of the dangers of these three diseases for the lives and well-being of the poor and vulnerable

the inability of NGOs and international organizations to tackle the diseases on their own, because of their small scale and limited reach

their profound concerns about the impact of withdrawal of the GFATM grants on he humanitarian situation in the country.

5.3 Official Attitudes on HIV/AIDSThere has been a marked change in official attitudes towards HIV/AIDS over the last 12 months. In mid-2004, the Government was still claiming that the numbers of people infected with HIV and with full-blown AIDS were very low. By mid-2005, it was acknowledging that at least 350,000 people were infected with HIV, and did not dispute the prevalence rate of 1.2-1.5 percent normally used by the international community (implying that up to 800,000 people are infected). Moreover, the Government now concedes that HIV/AIDS poses a serious threat to the integrity of many communities, endangering lives and economic growth. A broad coalition for action against HIV/AIDS is building. Significant policy shifts are now being seen: one important example is the new willingness to embrace needle exchange programmes for intravenous drug users.

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5.4 Microfinance LegislationThe long-term future, sustainability and expansion of the several microfinance projects in Myanmar (including the three sub-projects funded by UNDP under HDI) depend on their institutionalization under a legal and regulatory framework that enables effectiveness and autonomy. The last two Assessment reports have recommended that UNDP should be authorized to pursue actively an appropriate legal framework for institutionalization of microfinance in Myanmar as, arguably, the single most important step towards addressing poverty in the country. However, there seemed to be little prospect of moving towards such a legal framework.

In early 2005, to general surprise, the Ministry of Cooperatives (the counterpart Ministry for HDI's Microfinance project) hired a legal consultant and began to draft legislation to govern microfinance. The Assessment Mission reviewed the draft, and views it as a promising start that could help to promote an effective microfinance sub-sector. There are, however, some aspects of the draft that do not appear to meet international norms and standards.

6 Follow-up on 2004 Recommendations

In its 2005/3 decision, the UNDP "Executive Board:

i) takes note of….the report submitted by the [2004] independent assessment mission, in particular the key challenges and recommendations mentioned therein;

ii) notes that the Human Development Initiative is highly relevant to improving the situation of the rural poor in Myanmar, and requests the Administrator to take account of and implement the findings of the independent assessment mission; and

iii) requests UNDP, in expanding the programme, to ensure that quality is maintained, taking into account the findings of the evaluation that took place in 2004."

The terms of reference for the current Assessment Mission include a review of the follow-up action to implement the 2004 recommendations. Overall, the Mission considers that UNDP has made impressive progress in following up on last year's recommendations. The progress is especially praiseworthy when the rapid movement of the HDI Expansion Plan is taken into account, as well as the preoccupations of senior management with the narrowing of the humanitarian space and its implications for UNDP. The specific elements of follow-up can be summarized as follows:

* Outstanding progress has been made on reorienting HDI toward greater emphasis on livelihoods and income generation (the principal needs of the truly poor). Senior staff have been recruited to guide the livelihoods work. Field staff have received additional training. Two FAO consultants have prepared reports on livelihood opportunities and community forestry. Most importantly, expenditures on livelihood improvement have been dramatically increased by ICDP and CDRT.

* The HIV/AIDS project has been completely re-focused (with help from an international consultancy) to provide technical support to ICDP and CDRT to train Self-Reliance Groups on HIV/AIDS awareness-raising. The project has a new structure and staff. Activities in which other agencies have a comparative advantage (e.g. the provision of commodities to the National AIDS Programme) have been phased out.

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* Progress on the planning and initial implementation of the HDI Expansion has been rapid and soundly conceived. The focus is on livelihood improvement with an appropriate emphasis on quality rather than quantitative delivery targets. Baseline surveys have been planned for the new Townships. An "ideas group" to guide the expansion is to be set up at the UNDP Country Office.

* There has been some progress in evolving the Self-Reliance Group (SRG) model that has shown considerable promise for tackling rural poverty and improving local governance. In CDRT, some mature SRGs have begun involvement in village-wide issues and in natural resource management: in Kachin, they have started to negotiate with Township authorities. However, there has been little progress in testing local support systems for the longer-term sustainability of SRGs, nor in developing a coherent exit strategy.

* Progress has been limited on using the HDI experience to serve as a Voice for the Poor. A major debriefing meeting on the Agricultural Sector Review was held with relevant Ministries and donors: while pro-poor issues were discussed, forward movement is likely to depend on systematic discussions over time with Government. UNDP/UNOPS were offered an opportunity to provide technical assistance to the microfinance legislation being drafted, but this was not taken up because of the interpretation of the mandate for Myanmar. Because the Country Office's Policy Unit is under-resourced, data from the projects is still not being analysed and used to inform the international community or the policy dialogue with Government.

* In the absence of an effective Policy Unit, there has been no progress in undertaking a systematic and cost-effective programme to assess HDI's impact on poverty. Little has been done to document best practices across the programme area.

* A standard package for disaster preparedness is being planned. Immediately after the Tsunami disaster in late 2004, HDI staff were involved in assessing the damage in affected areas.

* There has been limited progress on Partnerships and Synergies. Short field visits to HDI projects have been undertaken by representatives of seven donor agencies. Three meetings have been held with NGOs on microfinance legislation and on natural resource conservation. And the HDI Expansion Plan was shared with other UN Agencies. In general, however, knowledge of HDI among the international community remains low. Little has been done to develop effective alliances with other organizations to help bring about policy change, draw in additional resources, or enhance sustainability. Collaboration between HDI projects has improved somewhat, with joint planning between ICDP and CDRT for baseline surveys in the new Townships, and a pilot project in two villages containing both SRGs and microfinance groups.

7 Assessment of Progress of Programme and Projects

This section presents the conclusions of the Assessment Mission on the performance and progress of HDI-IV and its constituent projects. Overall, the Mission concludes that performance is impressive. HDI-IV is identifying and reaching the rural poor more effectively than earlier phases. The basic programme approach -- focusing on community organization and training; an emphasis on livelihood improvement with some investment in social infrastructure; and credit and savings to build assets and raise incomes -- is well

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suited to the needs of the rural poor in Myanmar. The programme's impact on the poor seems to be highly positive. There is a need and opportunity to enhance the programme's sustainability through building support systems for community organizations, institutionalizing programme elements (particularly microfinance), and using programme experience to help construct a more supportive policy environment.

7.1 Programme Scale and BeneficiariesAs of July 2005, HDI-IV was functioning in 4,244 villages, served by the following projects:

CDRT 837 villagesICDP alone 1,178 villagesMicrofinance alone 1,097 villagesICDP and Microfinance jointly 1,132 villages

It is not easy to determine the exact number of beneficiaries of HDI-IV. The average village in Myanmar contains roughly 100 households and 500 people. In villages where ICDP and CDRT operate, almost all villagers receive some benefit from the investments in small-scale infrastructure (school rehabilitation and books, minor roads and paths, minor irrigation, soil conservation, water and sanitation, and jetties) and in training (in community management and organization, and specific skills -- agricultural extension, soil conservation, veterinary, auxiliary midwifery, health education, etc.). In those villages where Microfinance functions alone, the majority of benefits accrue to active clients of the project, though there are some indirect benefits to other villagers from increased economic activity. The Microfinance project explicitly excludes larger farmers and richer families from its group membership. It also does not generally impact the poorest families in the village, who often cannot meet the criteria of regular meetings, savings and loan repayments. On average, Microfinance reaches 65 clients per village, representing more than half the households in the typical village.

The 3,147 villages in which CDRT and ICDP operate contain roughly 1.55 million people. The 1,097 villages in which Microfinance functions alone include approximately 70,000 active clients: including their household members, Microfinance benefits 350,000 people in these villages (plus a further 350,000 people in villages jointly covered by ICDP). Thus, the total number of beneficiaries of HDI projects is in the range of 1.9 million people.

Within this large group of beneficiaries lies a subset of people who benefit more intensely from a greater investment in community mobilization and group training, as well as access to saving and credit opportunities. These are the members of the Self-Reliance Groups and the Microfinance Groups. There are currently 2,900 SRGs with approximately 55,000 members, and a further 29,000 Microfinance Groups with 145,000 active clients. Thus, these groups total 200,000 members, almost all of whom are women from the poorer sections within the villages. SRGs tend to reach further down the poverty gradient than do Microfinance Groups, for reasons explained in the last two Assessment Mission reports. Including family members, these groups benefit approximately one million people.

It should be noted that initial activity in the expansion Townships covered by ICDP and CDRT is being restricted to around 30 villages per Township. Therefore, the number of beneficiaries in each expansion Township will tend to be smaller

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than in the 24 old Townships, unless ways can be found to spread benefits beyond the 30 villages (see Section 8.4 below).

7.2 Programme ApproachHDI-IV is explicitly targeted at the poor of Myanmar. The last two Assessment Missions have examined the adequacy of the programme's procedures for identifying and targeting the poor, concluding that the sophisticated procedures in place are successful in this objective. This Mission confirms that finding. It also notes that the HDI Expansion has been well targeted on the poorest Townships that are accessible to UNDP. Thus far, UNDP has not been allowed access to those areas that have emerged very recently from conflict or where security problems persist, but it has selected Townships that are as close as possible to these areas. It has also added new Townships in remote border areas of Chin (perhaps the most deprived region in the country) and Kachin, as well as poorer Townships in the centre of the country. Within each Township, the use of secondary data, meetings with village representatives and Township authorities, and groundtruthing by staff seems to be highly successful in identifying and selecting the poorest villages.

The key starting point in each village is a three-day planning workshop, in which all households identify common needs and do a wealth ranking exercise to identify the most needy. Needs are prioritised and an action plan formulated to specify the individuals responsible, timings, and the contributions to be made by the community -- labour, local materials and cash. The resulting village development plan includes infrastructure micro-projects (e.g. school rehabilitation/ construction, irrigation wells, paths); training needs for capacity-building and specific skills; and the identification of poor women willing to join Self-Reliance Groups. All evidence suggests this process is well accepted by villagers and successful in identifying the poorer families.

The processes of community organization, and especially the formation and support of SRGs and Microfinance Groups, are now well known across the projects. They continue to be executed effectively. The approach to community organization has proved highly successful in promoting empowerment of the poor and gender equity. With the increased emphasis on livelihood improvement over the past year, the impact on incomes of the poor appears to be even more significant than in the past (though HDI must do more to capture this impact in quantitative terms: see Section 8.5).

While HDI-IV is exceptionally effective at targeting and reaching the rural poor, it still has difficulty in reaching the poorest of the poor. Principally, this latter group comprises destitute households, generally elderly people with no family, landless widows with small children, and some extremely poor families that need to migrate regularly in search of work. All development projects everywhere have experienced great difficulty in reaching these groups effectively. The Mission notes that a number of project field staff expressed concern about HDI's inability to provide livelihood support at this level. Several suggested that HDI-IV should consider giving small grants to these households to help them towards income-generating opportunities and, in the case of the regular migrants, to give them an alternative to having to move to find work. The Mission empathizes with these concerns. However, it cautions that such an approach would be labour-intensive, risky and would divert resources from current programme priorities.

7.3 Self-Reliance GroupsSRGs are informal groupings, whose members formulate and decide their own rules and regulations. The approach is flexible and adaptable to the changing

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needs of the members, but strict and clear in relation to the individual members with agreed sanctions from the group for deviant behaviour. Wherever they have been established, SRGs are making considerable progress in building the competence and confidence of poor rural women and in giving them access to credit for productive, consumption and emergency needs as well as the discipline of saving. The Mission found:

• an impressive number of success stories of SRG members (often from landless, indebted households), who had succeeded in income-generating activities, bought land, sent children to school or even university, because of their participation in SRGs;

• an impressive number of articulate and confident women able to identify, plan, implement and manage activities for life improvement (women comprise close to 100 percent of SRG membership);

• that the best SRG groups had accumulated common funds up to $1,600 and provided loans of $1-300 for emergency, consumption and income generation purposes;

• that the best SRGs provide capital for community activities and send the poorest children of their community to school;

• that SRG activities stimulate intrapreneurial activities: i.e. creativity and rational risk taking action in a community-oriented perspective;

• that repayment rates on SRG loans have been impressively high. The poor women have indeed proved that they are bankable;

• that establishing and running SRGs, as well as the training they receive, leave behind a community-oriented attitude and valuable skills in cooperation and management of groups and small-scale projects.

The SRG approach has shown great potential, not only for tackling rural poverty, but also for improving local governance in rural Myanmar. SRGs promote empowerment of the poor and income and gender equity. At the same time, they are fragile and nascent institutions.

7.4 Financial PerformanceAnnex (II) presents the actual expenditures of HDI-IV by project for 2003 and 2004, with an estimate of expenditures for 2005. Compared to the 2004 budget of $7.8 million, actual expenditures were $7.35 million. Significant underexpenditures occurred in ICDP and CDRT, both of which also spent less than in 2003. The Mission does not view this underexpenditure with concern. Both projects had to spend much time in 2004 planning for the HDI Expansion, inevitably interrupting fieldwork. Moreover, in the second half of 2004, both projects switched their primary emphasis from meeting social infrastructure targets to livelihood improvement. It is harder to spend significant amounts of money on the latter. The Mission regards this change of emphasis as highly positive in meeting the most pressing needs of the poor.

The Microfinance and Integrated Household Living Conditions Assessment projects both spent significantly more than originally budgeted. In the case of Microfinance, the original budget did not include a capital grant of $550,000 to the three sub-projects to expand lending. The IHLCA has, probably inevitably, cost more than originally anticipated because of the ambitious nature of the surveys.

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The four field projects (i.e. excluding the Agricultural Sector Review and the IHLCA) had total expenditures of $5.7 million in 2004. Bearing in mind that they benefited some 1.9 million people, the per capita costs seem reasonable. There are interesting variations in costs between projects. In 2004, CDRT spent an average of $4,000 on each of the 423 villages it was serving. The per village average for ICDP was $1,100. The main reason for the difference is that ICDP only puts a "full" package of services (livelihoods and social infrastructure) into its 220 "new" villages. Other villages have received investment under earlier HDI phases, so only receive a partial package under HDI-IV. The cost differential also reflects the higher administrative and travel costs in the remote and scattered CDRT Townships, together with the use of UNOPS as Executing Agency (whereas ICDP is under Direct Execution by UNDP).

The total cost of the Microfinance project, including the capital injection, was $8 per active client. However, it should be noted that Microfinance is already self-supporting in financial terms. Its operating income (almost entirely interest on loans) exceeds its financial expenses (interest paid on savings) and administrative expenses by a significant margin - Annex (III).

The Mission would also point out that the estimated HDI-IV expenditures for 2005 - Annex (II) are likely to prove optimistic. Fieldwork has yet to begin in most of the new Townships under the Expansion Plan. It takes time for staff recruitment, village and household selection, and initial training of villagers before significant funds can be spent in new areas. The Mission therefore anticipates that HDI-IV will not reach its expenditure targets for 2005 on ICDP and CDRT.

7.5 Community Development in Remote Townships (CDRT)The target communities of the CDRT project were originally located in 13 townships in Rakhine, Chin and Kachin States, but have now expanded to start up activities in an additional 13 Townships in those states and in Mon and Kayin. Most CDRT villages are inhabited by ethnic minorities, some even by several minorities speaking different languages. They are characterized by various degrees of physical remoteness and social, economic and cultural isolation.

Key features of the CDRT project include the formation of SRGs, income generation activities, and community activities with creation of employment opportunities and infrastructure facilities at the village level. Many different kinds of training have been undertaken. CDRT has been particularly successful in recruiting staff from the immediate locality, thus improving access to the villages and developing resource people in the villages.

Since the start of CDRT, 1,807 SRGs have been established, 3,574 community micro projects implemented and 50,883 villagers have been trained. Highlights of ongoing progress made by the project over the last year include:

The project has expanded its current ongoing operations from a total of 423 villages in 13 townships in mid-2004 to 837 villages in 26 townships. Operations in many of the new villages are just starting up, but the first steps have been taken.

The Community Infrastructure Development Grant Fund of $4,000 per village has been used with good results during the reporting period.

1,780 SRGs are currently in operation with a capitalisation support from the CDRT budget of $188,000 for 2005. Most of them are working well. The best and most mature groups - now more than five years old - have achieved impressive results and show no signs of losing their vitality and

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mission. 28 trainers have been trained in 2005 to enhance the abilities of SRGs in bookkeeping, management and administration. 47 training sessions in income-generating activities for SRG members are being undertaken in 2005.

145 schools are being constructed, renovated or extended at a budget of $516,000 and 10,000 people are participating in courses for adult literacy and numeracy. 18 pilot Community Reading Centres are being established in 2005.

18 Sub-Health Centres are being constructed or renovated, while 245 Community Health Workers, 264 Auxiliary Midwife Workers and 428 Village Health Education Volunteers are being trained. Safe drinking water is being provided through the construction or renovation of 154 wells and 48 gravity flow systems. 3,285 latrines are being built.

In promoting improved livelihoods for the poor, CDRT is helping to clear 1,470 acres of paddy land and 977 acres of bench terraces. 74 mini-irrigation schemes with a budget of $120,000 are being developed with a command area of 5,805 acres. Horticultural and other crops are being promoted, farm inputs and high yielding seeds supplied. 77 Agricultural Extension Workers and 426 Village Veterinary Workers are being trained.

7.6 Integrated Community Development Project (ICDP)ICDP is the largest of the HDI-IV projects, spending $2.5 million in 2004, slightly less than the year before. ICDP was designed to draw together and integrate seven separate sectoral projects from earlier HDI phases. ICDP is currently working in 2,310 villages across 11 Townships. 1,210 of these villages are "social infrastructure" villages, focusing on education, health, water and sanitation as well as community facilities such as jetties, foot paths and community resource centres. These villages had received help from HDI in agriculture and natural resource management under earlier phases. 880 are "livelihood villages" with activities focusing on income-generating activities in agriculture, livestock, fisheries and forestry. These villages had received social infrastructure assistance under previous HDI phases. 220 of the 2,310 villages are new to HDI-IV from 2003 onwards to become the first fully-integrated ICDP villages, focusing on both livelihood and social infrastructure activities.

While the distinction between social infrastructure and livelihood villages was significant in 2003, it is now thought by several project staff to be superfluous. The distinction seems to complicate development cooperation with the village communities as all villages still need both kinds of activities to improve their standard of living and build governance and managerial capacity.

Since March 2005, ICDP has begun its expansion into 16 new Townships. By July 2005, new offices had been opened in nine Townships, staff recruitment had begun and some villages had been selected for project operations.

1,084 SRGs are currently functioning in Livelihood and New villages -- somewhat fewer than last year, since consolidation and strengthening of existing SRGs have been the primary goal. The focus has been to help SRGs organize themselves into strong and sustainable entities, increasing their capital and doing activities that benefit individual members as well as engaging them in playing a role in activities that concerns the villages as a whole. Some of the achievements of ICDP's SRGs include:

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In times of emergency, most SRG members are able to get assistance from their group, thus avoiding the need for usurious loans from moneylenders or selling off crops and labour in advance at very poor rates.

ICDP ranks the quality and status of their SRGs: 61% have recently been ranked from medium high to very high status, considerably better than last year's assessment.

All SRG members are highly motivated and empowered: every SRG member has an interesting story to tell.

The 2004 Assessment Mission emphasised the imbalance in project expenditure in favour of infrastructure (80%) as opposed to livelihood improvement (20%). The report clearly recommended that the imbalance should be redressed. As already noted, ICDP has made impressive achievements in the recommended direction, with 69 percent of the approved investments by June 2005 being for livelihood improvement and 31 percent for infrastructure. ICDP has also increased its staff capacity in livelihood improvement. It now has three Agricultural Specialists, each focusing on one of the ecological zones (Shan State, Dry Zone and Delta), assisted by one livestock and one irrigation specialist. Numerous new products to help poor landless families and marginal farmers have been introduced -- so far with good results. Examples are provision of quality seeds, land reclamation, green manuring, storage facility provision, small-scale irrigation and training on crab and eel fattening, bee-keeping, bamboo craft-making and mushroom cultivation.

7.7 Sustainable Microfinance to Improve the Livelihoods of the PoorThe Microfinance project has been in operation for eight years, working through three microfinance organizations to provide credit and savings services to groups of five women in 2,229 villages in Delta, Dry Zone and Shan State. The project is among the best of its kind globally, as determined after reviews by the Consultative Group to Assist the Poorest. It has continued to evolve positively over the past year, though it still faces a major challenge. Achievements include:

* The project has expanded from 100,000 active clients in mid-2004 to 145,000 in mid-2005. The average loan size has increased from $32 to $38, i.e. in line with estimated local inflation rates (after two years in which the real value of average loans declined).* As of March 2005, the project had capital assets of $5.6 million. Only 37 percent of the assets had been contributed by capital grants from UNDP: 43 percent resulted from retained earnings, while 20 percent represented savings by clients (now exceeding $1.1 million). * Efficiencies in the project have continued to increase. Annex (III) shows the operational and financial sustainability ratios for each of the three sub-projects. Net margins (i.e. operating income minus financial expenses for interest paid on savings, direct administrative expenses and the overhead costs of UNOPS and the three Implementing Partners) have improved from a range of -3.4 to 3.1 percent in 2004 to 7.4 to 12.9 percent in 2005. In adjusting for an assumed inflation rate of 35 percent, the adjusted margins are still negative. However, the local rate of inflation is probably only 20 percent, so the three sub-projects are beginning to approach full financial sustainability in real terms. Direct administrative expenses, at 6-12 percent of assets, are impressively low given the small size of loans and the daunting logistical challenges.* Most importantly, the project continues to demonstrate that the poor are bankable, and that positive real interest rates can be charged provided that

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credit is easily and transparently accessible. Repayment rates have remained at a creditable 99 percent.* The Vulnerability Assessment undertaken by EDA Rural Systems in mid-2004 shows that the sub-project in Delta has had a positive impact on income and asset ownership of borrowers. 30 percent of rural landless households taking loans have subsequently been able to buy land. While almost all borrowers are poor, the project generally does not reach the very poor, who cannot meet the requirements for regular loan repayments, savings and meetings.

7.7.1 Progress on InstitutionalizationFor some years, UNDP has recognized that the Microfinance project must eventually be institutionalized if it is to be sustainable and capable of significant expansion. More recently, there has been concern about the morale of the competent local management in the absence of institutionalization. During 2004, UNDP organized two consultancies by an experienced international expert to advise on steps towards institutionalization. The consultant proposed a three-phase plan:

* Phase I would extend the current project for up to three years until the creation of a Myanmar legal entity. During this phase, the current three microfinance organizations would be merged into one in order to "simplify the process of building a strong governing board and funding base". A single Implementing Partner would be selected, and accounting and reporting standards would be harmonized and computerized.* Phase 2 would involve the creation of a Microfinance Institution under the laws of Myanmar (probably as a trust) with a mandate to manage the funds and operations of the merged three sub-projects. The structure would allow the Microfinance Institution to retain the privileges accorded to UNDP but not currently granted to existing forms of legal organizations (e.g. flexibility in interest rates; the ability to receive funding from foreign sources; and the participation of foreigners in the governance of financial institutions).* Under Phase 3, a Licensed Microfinance Institution would be created once Myanmar's banking laws and regulations are adapted to provide a framework conducive for sustainable microfinance.

Since these two consultancies, there has been little forward movement. The Country Office has felt constrained by the mandate restrictions from engaging with Government on microfinance institutionalization. Plans to select a single Implementing Partner and to harmonize and computerize the management information systems have been slowed until full agreement is reached with the current three Implementing Partners.

The situation changed in early 2005 when it became clear that the Ministry of Cooperatives was drafting legislation to frame the microfinance sector. This legislation represents an opportunity for microfinance projects in Myanmar (including those supported by HDI) to resolve long-standing issues of institutionalization, sustainability and expansion. The Mission is also concerned that, without serious efforts to improve the draft legislation, the current version could be used for an obligatory takeover of the HDI (and perhaps other) microfinance projects.

7.8 The HIV/AIDS ProjectUNDP was one of the first international organisations to recognise the threat of HIV/AIDS in Myanmar. The inclusion of an HIV/AIDS project in early phases of HDI

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was important in providing assistance to the National AIDS Programme and to community-based organisations working on awareness prevention and caring for those with the disease. It is now evident, and also accepted by the Government, that HIV/AIDS is widespread in the country and that it is causing enormous damage to a large number of poor families. UNDP deserves considerable credit for having initiated the work in field.

Decisions were taken in late 2004 to phase out the high-cost elements (e.g. testing equipment, test kits and social marketing of condoms) and to re-design the HIV/AIDS project to draw it into greater synergy with the ICDP and CDRT. The emphasis of the redesigned project would be working with community groups on increasing awareness of HIV/AIDS and on preventative measures. The project staff was reduced from 20 to seven. Progress includes:

A training package was developed and pre-tested in selected ICDP and CDRT areas.

Pilot training of CDRT Township Facilitators to enable them to train other project staff on the integration of HIV/AIDS issues into project activities.

Pilot training of SRGs in providing basic HIV/IDS information to village communities has been done in CDRT-Kachin. Guidelines for their work have been drafted.

Partnerships with Community-Based Organizations have been analysed to determine what works best in terms of their sustained engagement in HIV and development.

Progress has been commendable in the direction recommended by last year's Assessment Mission. The remaining issue is whether HIV/AIDS should be integrated into Health Education activities and conducted by the same people during the same sessions, or a separate activity performed by different people. Most Community Development staff argue that it is more natural, convenient and efficient (for the project workers and the targets groups) if HIV/AIDS issues are handled along with other Health Education issues. The HIV/AIDS project staff, however, argue for separation and have initiated their activities accordingly. They maintain that HIV/AIDS is not merely a health issue but, more importantly, a development and cultural issue. Lessons learned throughout the epidemic show that there are underlying development conditions that affect people's vulnerability to HIV/AIDS. Required behaviour change is also dependent on support mechanisms from the community – how norms and values can be changed to reinforce behavioural change in the preferred direction. Treating HIV/AIDS as a biomedical issue without due attention to cultural and development forces has failed, according to the HIV/AIDS project staff.

7.9 The Agricultural Sector ReviewThe 2004 Assessment Mission noted the completion of the report of the Agricultural Sector Review. That comprehensive report provided a solid analysis of the disappointing growth of Myanmar's agriculture in recent decades, which has contributed to declining real incomes and growing poverty in rural areas. It raised a range of important issues designed to reverse these trends and stimulate broad-based agricultural growth. The results of the Review were discussed in a workshop at the Ministry of Agriculture in March 2004.

In the subsequent year, there have been a few developments. The Government has agreed to release the Agricultural Sector Review. FAO has published an extensive Agricultural Atlas of Myanmar, a useful document. The European

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Commission has indicated an interest in providing assistance to assess and map food insecurity and rural poverty. IFAD has prepared a preliminary draft of two small proposals for a food security study and a pilot project for rural microfinance. And in June 2005, FAO organized a major debriefing meeting on the Agricultural Sector Review involving two Ministers, many senior Government officials and representatives of donor agencies, diplomatic missions and international NGOs. No report on what was actually discussed during this meeting was available to the Assessment Mission. Participants have said that the issue of pro-poor agricultural growth were put clearly on the table, though it is not evident whether the meeting will result in policy change. The FAO Representative told the Mission that FAO is aiming for gradual changes in policy at the level of Directors-General.

7.10 The Integrated Household Living Conditions AssessmentThis ambitious, nation-wide survey of poverty in Myanmar has been welcomed by many development partners, including donors, NGOs and UN Agencies. The project is being executed by UNDP, UNOPS and IDEA International (Canada) in collaboration with the Ministry of National Planning and Economic Development.

The principal activity over the past year has been the completion of the two rounds of quantitative surveys. In each round, the sample size has been a massive 18,000 households, covering all States and Divisions in the country. The first round was conducted in October-November 2004, i.e. shortly after the main harvest season. The second round, designed to pick up seasonal differences in poverty and vulnerability, was undertaken in April-May 2005, before the harvest.

The Assessment Mission's visit to Myanmar coincided with the arrival of a large team of consultants from IDEA International, who were spending six weeks in country to begin guiding the analysis of the survey data. This team told the Mission that they are quite pleased with the quality of the data from the surveys. Once the data is fully cleaned, the team will begin work on basic tabulations and preliminary analysis. They expect to be able to present a first draft report to the Ministry and UNDP in early 2006. Overall, this project is very much on track (if more expensive than originally anticipated) and seems likely to fulfil its promise as the largest and most important source of information on the nature, extent and causes of poverty in Myanmar.

7.11 Programme Management and IntegrationThe Mission considers that the design and implementing mechanisms of HDI-IV have led to greater programme integrity and cohesion compared to earlier phases. The transition from seven sectoral projects in HDI-III to the one integrated ICDP project in Phase IV has been successful. There has been a marked reduction in the number of implementing agencies, combined with use of direct execution by UNDP for ICDP. The question asked by the Assessment Mission is whether the redesign of programme management and integration has gone far enough or whether there are still untapped potentials for the HDI programme to proceed further in the field of reorganisation.

The Mission found that programme integration and area coordination between ICDP and Microfinance is still limited. In particular, there is an agreement that SRGs should not be created in villages in which Microfinance is operating (explaining the relatively small number of SRGs established by ICDP). Similarly, Microfinance does not function in ICDP villages with SRGs, despite the clear evidence of the demand for greater amounts of accessible credit in all villages. In Dry Zone, a pilot project has started in two villages to test collaboration between the two projects. This is reported to be going very slowly, and the Mission was

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not encouraged to visit these pilot villages. In the 11 Townships where both projects operate, ICDP and Microfinance have separate and fairly big project offices, often close to each other, as well as separate equipment and logistical set-ups, that could probably be utilized more effectively if closer cooperation was initiated.

There is also limited cooperation between ICDP and CDRT. CDRT has a longer history as an integrated project than ICDP, which started in 2003, and the ICDP project document to a great extent is a copy of CDRT’s. While the two projects work in different geographical areas, there is much value in mutual interchange. This should be a matter of sharing experiences, learning from each other, visiting each other's projects and undertaking more common staff training as promising areas of cooperation. But so far very little has been done in these areas.

The Mission observed that CDRT has a less bureaucratic, more decentralised and independent decision-making system. Community Development projects need flexibility and field-adapted responses, interlinked with good support from head office, in order to perform and evolve in an optimal manner.

7.12 Partnerships and CollaborationThe overall objective of HDI is to address poverty in Myanmar. This challenge is so vast that UNDP must seek alliances with other partners and support from other service providers. The Mission found that HDI-IV still has limited collaboration with UN agencies, other donors, local and international NGOs, and the private sector.

The intention to increase the collaboration with UN agencies definitely exists as a result of the corporate objectives and because the opportunities appear promising. A Strategic Framework document for the UN Agencies in Myanmar was developed by the UN Country Team in April 2005. The document prioritises five broad thematic areas reflecting the basic needs of the country around which the UN agencies in Myanmar should focus: poverty; food security; health; education; a “protective environment”; and reducing regional disparities. Gender equality, equity and AIDS are cross-cutting issues. However, except for coordination mechanisms such as more regular UNCT meetings and the establishment or strengthening of sectoral and geographic working groups, the Strategic Framework document appears fairly non-committal in the potential specifics of collaboration.

Several bilateral donors are interested in providing additional funds for HDI-IV, though the Mission was told by all diplomatic missions it met that they knew too little about the programme. In addition to on-going support from Australia for HDI work in Northern Rakhine, the UK, Swedish and New Zealand governments have recently committed resources to HDI-IV. However, it seems likely that additional funds will be required from bilateral donors as the Expansion Plan evolves.

Despite the narrowing of the humanitarian space in Myanmar, civil society is quite active in the country. 41 international NGOs are functioning, while the number of independent local NGOs and Community-Based Organizations seems to be growing. Many of these have useful experiences and capabilities, and could also learn from the extensive HDI experience. Most expressed a desire for a closer interaction with UNDP on community development. Over time, some of these organizations could also work directly with HDI-IV as partners, service providers or sub-contractors. Collaboration with NGOs is currently limited to the three international NGOs working as implementing partners for Microfinance,

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discussions within the Microfinance Working Group, and small efforts to develop local NGOs as service providers.

The Capacity Building Initiative (CBI) was launched in December 2000 as an NGO forum and support agency. CBI is committed to providing capacity-building opportunities and resources to Myanmar nationals serving as development workers and practitioners so that local skills and knowledge can be successfully drawn upon to design, implement and manage development projects. Significant achievements have been made and useful training and workshops undertaken. UNDP, through the Resident Representative, has taken an interest in CBI.

There are some local consultancy and other service-providing companies that could work with HDI. One is already being used by CDRT in the field of health education, while others supply inputs (e.g. treadle water pumps). More support and advice, possibly including partnerships, could be obtained from local resource people, traders and business men, even local Chambers of Commerce, which could assist villagers, groups and communities in identifying business opportunities, establishing links, transport and marketing.

8 Key Challenges and Recommendations

This section summarizes the key challenges facing HDI, derived from the assessment presented in the previous section, and makes recommendations designed to improve even further the impact and sustainability of the programme in the interests of the welfare of the rural poor in Myanmar.

8.1 Programme FutureThe situation of the rural poor is continuing to worsen. This makes it essential that the programme activities funded by HDI-IV, as the largest externally-funded source of support to the rural poor in Myanmar, should be continued without interruption. The programme is not only having a substantial direct impact on a large number of poor people, but it also shows promise as a model for policies and other programmes to extend the benefits more widely. HDI-IV officially ends on December 31, 2005.

The HDI-IV Expansion Plan was approved in March 2005 and is only just beginning its fieldwork. Moreover, HDI-IV is starting to address the issues of sustainability of the gains and processes it has initiated. The Mission regards it as very important that these efforts be continued without the disruptions that accompanied the hiatus between Phases 3 and 4 of the programme, which damaged programme momentum and caused the loss of experienced and competent personnel.

8.1.1 Programme ExtensionThe Assessment Mission strongly recommends that the UNDP Executive Board and the Government of the Union of Myanmar should approve as quickly as possible a two-year extension of HDI-IV, i.e. through December 2007. It also recommends that adequate funding be provided for this extension to permit both the sustainable consolidation of the programme in the 24 original Townships and full implementation of activities in the 40 expansion Townships. There is not yet a full budget for a two-year extension, though the Mission understands it is likely to be in the range of $25-30 million. Experience, particularly with CDRT, shows that the HDI approach to community mobilization and institutionalization takes several years to mature. The Mission believes that completion of the work in the expansion Townships will require an additional phase beyond 2007. Thus, it also

23


recommends that 2006 should be used to plan a fifth phase of HDI, as well as a systematic exit strategy from the 24 existing Townships.

8.2 The Future of SRGsWhile there is real evidence of progress among the SRGs, the Assessment Mission is concerned that HDI-IV does not have a clear strategy for their sustainable development. Experience with earlier HDI phases and in other countries suggests that community organizations of this type will fade quickly in effectiveness unless they have continuing access to technical support and training, and the ability to take on new and larger functions over time. As HDI begins to envisage withdrawal from the original 24 Townships, it is essential that a clear plan be put in place to ensure longer-term support for the SRGs, which have proved to be so well adapted to the needs of poor women in rural Myanmar.

8.2.1 Local Support SystemsSRGs will continue to require technical assistance and training after HDI withdraws from Townships. Over time, the SRGs should be able to meet the costs of these services, though they may require some subsidization from UNDP in the initial period. Possible sources for these services include local NGOs, groupings of people who have been trained by HDI projects and, perhaps, some local companies with a strong commitment to rural development in Myanmar. The Mission recommends that, as a matter of considerable urgency, ICDP and CDRT should test approaches to the on-going provision of technical assistance and training for SRGs. It may also be useful to explore the informal federation of SRGs to assist in provision of these services. UNDP should also take a more systematic approach to drawing in the private sector to assist its rural development efforts. There have been some efforts to involve the private sector in input supply and output marketing, but these have been scattered and limited to particular situations. HDI-IV, with its scale, could be highly influential in encouraging businesses to make input supply and marketing more efficient and sustainable.

One key element of sustainability of HDI benefits is keeping trained village workers functioning in the longer term. ICDP and CDRT have both invested large amount of money and time in training a range of village workers, providing a broad range of skills including group management, midwifery and health education, soil and water conservation, and agricultural and veterinary extension Most of these village workers provide their services free of charge or in return for nominal gifts. For the longer term, however, it may be desirable to test the payment by villagers of small fees for the advice, services and support they receive from these village workers.

8.2.2 Expanding Credit AvailabilityAt the present time, most SRGs can only use their own savings as the source of credit for members, though CDRT also makes small grants to successful SRGs to increase the credit pool. ICDP is still considering this latter approach, but is concerned that the grants might lead to indiscipline and fraud among some SRGs. While regular, the savings of most SRGs only grow relatively slowly. This restricts the number of borrowers and the amount they can borrow. All the available evidence suggests the demand for accessible and transparent credit far exceeds supply. As SRG members gain experience with credit and develop new business opportunities, this demand is likely to increase rapidly.

The current draft on microfinance legislation being prepared by the Ministry of Cooperatives seems to include the possibility that registered microfinance institutions could lend to groups such as SRGs. The Mission recommends that UNDP should endeavour to ensure that this provision is clearly included in the

24


final legislation, and should begin to prepare its microfinance sub-projects and the SRGs to implement this possibility effectively. The Mission also recommends that UNDP should analyze systematically the CDRT experience with small grants to SRGs to determine whether and how this might be extended to ICDP.

8.2.3 SRG Participation in Village-wide IssuesAs observed by the Mission, some SRGs have started to provide financial support to community activities and the poorest people in the village. SRGs and their members have gained in confidence and competence. The Mission recommends that these achievements should be used to improve decision-making at the village level, giving poor women a more effective say in the decisions that affect the village as a whole. A first step should be to press forward in encouraging more mature SRGs in a village to meet informally to discuss village-wide issues.

8.2.4 Group Autonomy and IndependenceAs the SRGs and Microfinance Groups grow in assets and capabilities, they will inevitably attract the attention of outside parties seeking to influence their activities and resources. Already, there have been some requests for these groups to contribute funds towards activities of little relevance to the groups and their purposes. The regular presence of HDI staff greatly limits the opportunities for harmful outside influence. As HDI prepares to withdraw from more mature areas, it is vital for UNDP to develop a plan to protect the autonomy and independence of these groups. Possible mechanisms might include: informal federation of groups to give them greater strength to resist interference; providing local support systems with a "hot line" to contact UNDP in case of need; and periodic visits by UNDP staff even after withdrawal from an area.

8.2.5 Concern for the MenThe successes of the SRGs and Microfinance Groups, nearly all of whose members are women, raise some concerns for the men. Though the men appear to be supporting their enterprising and income-generating wives, misunderstandings, jealousy and some gender conflicts may arise. The Mission was made aware of some instances in this regard. The Mission recommends that UNDP should formally examine this potential problem after which activities could be undertaken for awareness-raising, training and other kinds of support focusing on the husbands to ensure continuing support from the men in the area.

8.3 The Future of MicrofinanceThe Microfinance project is at a crossroads. It needs to be properly institutionalized so that it can become independent and self-sustaining, can expand its sources of funding (and, consequently, the range and size of loan products), and can retain the morale and services of project staff. There may be an unexpected opportunity for institutionalization provided that the legislation being drafted by the Ministry of Cooperatives results in a legal framework that enables effective, independent and sustainable microfinance legislation in line with international norms and standards. In the event that the legislation does not meet these criteria, it is not clear what options are available to UNDP/UNOPS. The notion of transferring the sub-projects to local institutions that are not likely to be sustainable, effective and autonomous is unappealing, and would raise the question of what UNDP would decide to do with the capital grants it has made to the sub-projects. If those local institutions were to be controlled directly or indirectly by Government, that could endanger future funding of HDI. Expansion of the Microfinance project into new Townships would also be in doubt in these circumstances.

25


A related dilemma concerns the proposal to merge the three sub-projects, creating a unified institution with common governance and accounting and reporting standards. While this proposal was supported by the 2004 Assessment Mission, it has, perhaps fortuitously, been delayed as a result of the questions raised by the Implementing Partners.

8.3.1 Technical AssistanceThe Assessment Mission strongly recommends that the international community should provide, as a matter of urgency, the technical assistance that has been requested by the Ministry of Cooperatives "to establish a Microfinance law which is on a par with international standards, will best suit Myanmar microfinance operations, and will buttress their sustainability". If UNDP is unable to provide this technical assistance for internal reasons, the Mission would recommend that FAO (which included a strong chapter on Rural Finance in the Agricultural Sector Review) or a bilateral donor with relevant experience should be requested to provide this technical assistance. The Mission would also recommend that UNDP involve the Microfinance Working Group in this process to the extent possible. The NGO members of the Working Group have useful experience in Myanmar and elsewhere, and understandably wish to be involved in legislation that will affect their operations. Until the issue of appropriate legislation has been resolved, the Mission would recommend that the expansion of the Microfinance project to new Townships be halted.

8.3.2 Project PlanningMany of the recommendations made by the consultant on institutionalization in the second half of 2004 have become redundant because of the prospect of imminent legislation on microfinance. In particular, the ideas of an interim trust arrangement, a merging of the three sub-projects, and immediate attention to the harmonization and computerization of management information systems will now need to be re-thought. As the shape of the new legislation emerges, UNDP/UNOPS and the Implementing Partners will need to give serious thought to the future of the project -- its ownership, structure, independence, expansion and funding. The Mission would recommend that UNDP should hire an experienced consultant to revise the institutionalization strategy in the light of changing circumstances. The purpose of the consultancy should be to advise on the future of the project; whether, and how, it should continue under the evolving legislation; how it might be designed to develop its full potential to serve the poor; and how the project can best be protected from outside interference.

8.4 Exit and Entry StrategiesIn line with its mandate, the UNDP office in Myanmar wishes to extend the benefits from HDI to as many poor people as possible. The staff clearly recognizes that this involves two key elements:

1) HDI-IV needs to find ways to withdraw over time from the 24 original Townships, in which it has already been working for several years. This is essential in order to free up resources to be used in new areas. The staff also sees the need to ensure that any withdrawal leaves behind the gains (especially the human skills and group capabilities) that have been achieved in these areas.

2) In the 40 Expansion Townships (and possible further areas in the future), HDI-IV needs to find ways to work more efficiently, so that the benefits from limited resources can be spread more widely.

While these broad objectives are widely shared, there is little clarity on how they will be implemented in a coherent and sustainable manner. The Mission

26


recommends that ICDP and CDRT should articulate in writing both an exit strategy for the 24 original Townships and an entry strategy to guide work in the expansion Townships. Key elements of these strategies should include:

a) Replicability. Thus far, there has been little attention by ICDP and CDRT to spreading benefits of their activities to villages near those villages in which the two projects work. Some of the benefits could be spread quite quickly and cheaply, particularly through the establishment of SRGs and the training of individuals in community organization and specific skills. This would probably involve a Centre Model Approach, under which the best performing villages and SRGs would be selected as models. These model villages and SRGs would receive the full range of activities and inputs available. Interested nearby villages and groups would be designated as satellites. Villagers from satellites would participate in training in the Center Models and would visit them regularly to observe progress. Activist members of model villages and groups could be selected, trained and supported to work as resource persons with the satellites. This approach could enable the projects to impact a larger number of villages, especially in the expansion Townships.

b) Efficiency. Another element of HDI reaching as many beneficiaries as possible for a given amount of resources is to examine the efficiency and cost-effectiveness of the projects. As Section 8.5 notes, UNDP knows little about the efficiency of programme components. It is likely that greater information on efficiency and cost-effectiveness could enable ICDP and CDRT to impact a larger number of people by concentrating on those interventions that are most effective. As an example, an assessment of school construction/rehabilitation made at the end of HDI-III showed that this activity (which is the single most costly item in the CDRT/ICDP package) has little impact on school enrolment rates or educational outcomes. School construction/rehabilitation is certainly valuable in mobilizing communities and providing benefits to the whole village. Nevertheless, UNDP needs to consider whether it should remain part of the package. Similar assessments need to be made of the other principal components of the package, in order to increase programme efficiency.

c) Sustainability. The exit strategy for the original Townships needs to focus primarily on sustaining the benefits that have been achieved over the life of HDI. The main components of sustainability have already been discussed in Section 8.2. But it is also important that the exit strategy should have the full support of both staff and villagers. This requirement adds to the desirability of the exit strategy being articulated in writing, so that its objectives, timing and obligations can be fully comprehended by all staff. The participation of villagers -- to obtain their ideas, understanding and consent -- is also key. From this perspective, it may be useful for the projects to organize phasing-out workshops in villages (equivalent to the village planning workshops during start-up work).

8.5 Impact Assessment, Learning and DisseminationOne of the greatest challenges facing HDI-IV is the lack of systematic documentation on the lessons learned from the programme, its benefits and their cost effectiveness. This has been a recurrent theme in the 2003 and 2004 Assessment Mission reports. The current Mission reiterates the recommendation that, as a matter of priority and urgency, HDI-IV should devote adequate resources to these tasks in order to:

improve management decisions and the use of funds;

27


serve as a justification for the funding that will be required by HDI in future;

be a basis for dialogue with groups within Myanmar and with the international community on the alleviation of poverty and vulnerability in the country;

make HDI-IV more visible.

CDRT has begun to collect some success stories and lessons learned for its newsletter. This represents a start, but the Mission feels more has to be done. At the same time, it is aware of the heavy workload on field staff. This makes it imperative for management to seek ways to accomplish the required tasks while minimizing additional work for field staff.

8.5.1 It is vital to enhance efforts to quantify the benefits of HDI-IV in order to help justify future funding. With no baseline surveys in the 24 original Townships, other, proxy methods to assess the impact on poverty will be required. The Mission recommends:

a series of village case studies, using both recall and comparison with non-programme villages: these could most effectively be undertaken by graduate students. The study design, quality assurance and analysis should be done in consultation with an international consultant;

in the course of their regular visits to villages, field staff should compare the current situation of SRG members with the information originally available from the village planning exercises and wealth rankings.

8.5.2 Management needs better information on the cost-effectiveness of particular programme interventions and packages, in order to improve efficiencies and reach the largest possible number of beneficiaries with the funds available. The Mission recommends that HDI-IV should initiate a series of cost-effectiveness studies of significant programme interventions, particularly in the fields of natural resource management, agriculture and livelihood improvement. These should serve as the basis for short case studies that could be used in staff training across the programme and with the broader community interested in rural development. In addition, senior management should organize a comparison of the impact and cost-effectiveness of the more intensive CDRT village package with the less costly ICDP approach.

8.5.3 The handbooks and manuals developed by HDI-IV projects (particularly CDRT and Microfinance) are valuable tools for training and learning. In some instances, these documents could be revised and simplified, with inputs from field staff. Assistance from an international consultant could be useful.

8.5.4 The Mission also recommends that UNDP should develop an information strategy for HDI-IV to allow knowledge about the programme to be spread more widely among those concerned with rural development in Myanmar and the international community.

8.6 A Voice for the PoorThe gains made by individual field projects simply cannot be maintained without a policy framework that supports the poor. In Myanmar, there is a tendency for frequent policy changes (for example, in the prices of agricultural products and the openness of markets) and for a lack of consistency in promoting the interests of the poor. It is, therefore, essential for the sustainability of HDI impact that UNDP be as pro-active as possible in representing the concerns of the poor at the

28


national level and in encouraging policy changes that would encourage rural economic growth and support the poor.

UNDP has now accumulated twelve years of valuable experience in working with the poor in Myanmar. It has developed much knowledge on the primary concerns and needs of the poor, the constraints they face, and on approaches that can assist self-help and progress. This has been supplemented by national studies of poverty and pro-poor policies -- the Agricultural Sector Review and the Integrated Household Living Conditions Assessment. This combined knowledge base gives UNDP a unique position to serve as "a voice for the poor" to represent their concerns to Government at all levels and to press for improved policies and practices to benefit the poor. The Country Office and project staff clearly recognize the importance of engagement with Government on these issues, but feels constrained in moving forward within the parameters of the mandate restrictions.

8.6.1 Policy EngagementBecause the long-term sustainability of HDI-supported activities and their spread to other rural areas depend on an improved policy environment, the Assessment Mission recommends that the Country Office should evolve a strategy and capability to advocate at the national level pro-poor policies derived from its experience and studies. Examples include:* the need for a sustained and systematic dialogue, especially in conjunction

with FAO, on policies that would promote pro-poor agricultural growth* providing technical assistance to the evolving legislation for the Microfinance sector* policy recommendations that are likely to emerge from the analysis of the

Integrated Household Living Conditions Assessment.

Wherever possible, UNDP should join forces with development partners to pursue the policy dialogue with Government, e.g. those donor agencies that have worked on the agricultural sector and are interested in poverty issues, and the NGO members of the Microfinance Working Group.

8.6.2 Capacity for Policy AnalysisThe capacity for policy analysis and dialogue is currently limited in the Country Office. There have been several proposals for strengthening the Policy and Planning Unit, including providing it with the necessary staff and budget. For a variety of reasons, these have not been implemented. Successful dialogue on policy issues will depend on good data and analysis, buttressed by compelling presentation and the resources for sustained and systematic follow-up. The Mission recommends that UNDP should make a final determination on the structure, lines of responsibility, functions, staffing and required budget for the Policy and Planning Unit. Once these decisions have been taken, implementation should move ahead as quickly as possible.

8.7 Programme Management and IntegrationWhile the design and managerial arrangements of the current phase have moved towards greater programme integrity, the Mission believes that further steps are needed to realise the full potential of the programme.

8.7.1 The Mission recommends that the projects would be strengthened by regular visits by project staff to other projects and by joint action on training of field staff, production of training materials, etc. Such activities would be greatly

29


enhanced by a regular forum to consider strategic issues for the programme. Thus, the Mission also recommends that the "ideas group" proposed by the Country Office should be initiated as soon as possible, to guide strategic direction and enhance collaboration. Among other items, this group should actively encourage greater collaboration between ICDP and Microfinance, including breathing new life into the pilot project in Dry Zone.

8.7.2 The mission is compelled to ask whether the lack of coordination and cooperation observed between the key HDI projects has anything to do with the fact that different agencies are executing the projects in question: Direct Execution by UNDP for ICDP, while UNOPS is the executing agent for the CDRT, Microfinance and the HIV/AIDS project. The value added of having different executing agents and the need for outsourcing should be assessed. Given the fact that UNDP-Myanmar has to work under a special mandate clearly demanding downstream and grass root focus, what are the pros and cons of this management set-up for the HDI program?

8.7.3 Community Development projects need flexibility and field-adapted responses interlinked with targeted and well planned support from head office in order to perform and evolve effectively. The Mission observed that the ICDP had a fairly bureaucratic and centralised decision-making system with somewhat unclear lines. The Mission recommends that this system be assessed with a view to testing greater decentralization of appropriate decisions.

8.8 Partnership and CollaborationHDI-IV is the single largest example of international assistance to tackle poverty in Myanmar. It still has only limited collaboration with a range of potential partners working in the country, including other UN agencies, donor agencies, local and international NGOs, and the private sector Closer collaboration could contribute to the overall goals of HDI, including:

bringing about policy changes that are essential to the widespread alleviation of poverty;

drawing in additional resources, technical and financial, that are needed to optimise the potential of HDI-IV;

obtaining support in implementation of HDI-IV through partnerships with international and local NGOs and subcontracting of local consultancy firms;

assisting in ensuring the sustainability of the progress made under HDI-IV by strengthening local service providers such as local NGOs, and CBOs, companies and experienced individuals;

contributing to strengthening the weak, but slowly emerging, civil society.

8.8.1 There appear to be opportunities for closer partnership with other UN agencies. Currently, UNDP works most closely with FAO on the Agricultural Sector Review and on consultancies in aspects of agricultural development and natural resource management. The Mission noted that the two FAO consultancies undertaken in the reporting period tended to emphasize the need for further studies and to lack actionable priorities for HDI-IV. Further collaboration may benefit from tighter terms of reference and supervision, perhaps enhanced by drawing on expertise in these fields available from bilateral donors. In the last year, ICDP and CDRT have made significant investments in natural resource management, but the overall level of resources available is small compared to the enormous needs. The Mission recommends that UNDP should explore actively the possibilities for collaboration with the Global Environmental Facility and the

30


World Food Programme on complementary investments in natural resource management (including soil and water conservation and community forestry) and conservation in HDI Townships.

UNICEF has great competence and experience in health, education and water and sanitation. It currently works mainly with more than 100 Township authorities. Particularly as the HDI Expansion Plan gears up, the Mission would recommend that UNDP actively seek UNICEF collaboration in such areas as the provision of training in health, education and nutrition to HDI village communities and SRGs. Standardization between the two agencies of kits for auxiliary midwives and health educators is also desirable.

8.8.2 The Mission recommends that UNDP should intensify its efforts to inform the diplomatic and donor community about the humanitarian needs in Myanmar, the impressive results achieved by HDI in poverty alleviation and community mobilization, and the policy constraints affecting the programme and broad-based rural development. Knowledge about HDI-IV is still disappointingly limited. An appropriate mechanism to reverse this situation would be field visits by small groups. These take time to organize, but can be highly effective. Particular attention should be paid to inclusion of diplomatic missions of Asian countries and potential bilateral donors. 8.8.3 The Mission also recommends that UNDP should take the lead in a more systematic effort to dialogue with local and international NGOs on a broad range of issues affecting rural poverty. Many of these organizations have relevant experience in Myanmar and are also interested in the goals, approaches and lessons of HDI. Working groups can be a useful forum for interchanges of this kind. In addition to the Microfinance Working Group, UNDP should consider sponsoring working groups of community development and natural resource management. It would also be valuable to arrange exchange field visits between HDI and NGO projects. One possible mechanism for collaboration might be the Capacity Building Initiative. UNDP should consider assessing CBI for possible support to enhance collaboration in the alleviation of rural poverty.

9 Conclusion

The Assessment Mission concludes that HDI-IV is continuing to build on its strengths and achievements. The three main field projects are highly appropriate and effective in tackling rural poverty among nearly two million people. The investments in community organization and skills are especially valuable in improving local decision-making and self-reliance. The Expansion Plan is well conceived, has started rapidly, and shows promise in spreading the benefits beyond the original 24 Townships. Through its field projects, the Agricultural Sector Review and the Integrated Household Living Conditions Assessment, UNDP is performing a vital function in drawing attention to the problems of rural poverty and vulnerability in Myanmar.

HDI-IV still faces a number of challenges. Principal among these are: the long-term sustainability of the gains achieved using the HDI experience to exert a positive influence on pro-poor policies,

including the institutionalization of microfinance improving the efficiencies and cost-effectiveness of the programme to

enable it to reach a larger number of poor people

31


enhancing the programme's capacity to assess impact and develop and disseminate the lessons being learned.

The Mission was pleased to find that most of the issues raised in this report are being actively considered by UNDP and project staff. This augurs well for continuing improvements to an excellent programme.

The most disquieting finding of the Mission is the growing evidence of a trend of increasing poverty and vulnerability in Myanmar. This trend provides a strong justification for a continuation and expansion of HDI-IV. Specifically, the Mission recommends a two-year extension of the current phase, probably to be followed by at least one further phase. The Mission also argues for a substantial effort to help to improve the policy environment to give greater support to a successful and worthwhile HDI programme.

32


Annex (I) Location of UNDP's Human Development Initiative Activities in Myanmar

Maingpyin

Maingkaing

Ho_Pong

Loilin

LoikKaw

Maungdaw

Buthidaung

MYITKYINA

Palaw Myeik(E) Tanint

hayi

Taungup

Myeik(W)

Bokpyin

Kyaukpyu

Pekhon

Hpruso

Paukkaung Taun

goo

Nawnghkio

Mogok

Muse

Nyaunglebin

Waw

Moemeik

Mabein

Kawa Kay

an

Mindon

Kanma

Daik_U

Thongwa

Nawng_Yang

Shadaw

Bawlake Aung

lan

Mohnyin

Mogaung

Kutkai

Yauksauk

Ywangan

Kyaukkyi

Kyauktaga

Kalaw

Pindaya

Kyaukme

Lapputta

Ngaputaw

Manaung Pada

ung

Pathein(W) Seik

kan

Pyu

Bogale

Kungyangon

ShwepyithaHlaingtharaEin

me Pantanaw

Htantabin

Kunlon

Hlegu

BAGO

Kyonpyaw

Kyaik Lat

Laukkaing

Myanaung

Kyangin

Shwedaung

Gwa

Taikkyi

Ingap

u

Dedaye

Wakema

Minhla

Okpo

Kyauktan

Okatwin

Nattalin

Lemyethna Yegyi

Yanbye

Thapaung

Pyay

Pyapon

Paungde

Kawhmu

Tharyarwady

Maubin

Letpadan

Mawlamyainggyun

Hinthada

Kawthoung

Yebyu

Phasawng Me

se

Ye

Kya_in_Seikkyi

Kyaethi

Hlaing

bwe

Myawadi

Thandaung

Papun

Paung MAWLAMYINE Chaun

gzon

Kyaikto

DAWEI

Thayetchaung

Launglon

Dawei

Myebon

Thabeikkin

Banmauk

Natogyi

Salingyi Pa

le

Kyunhla Taze

Ye_U Tabayin

HAKHA Htantl

ang

Kale

Gangaw

Paunghyin

Pinlaung

Ya

methin Paukt

aw

Paletwa

Madupi

Pyinmana

Hkamti

Tilin

Pinlebu Kat

ha Tigyaing

Mingin

Shwe Bo

Falam

Kani

Yinmabin

Mawlaik

TAMU

Pauk

Saw

Kanpetlet

Mindat

Kyauktaw

Seikphyu Salin

Ann

Mrauk_U

Tiddin

Rathedaung

Kalewa

Sidoktya

Singu

Ngape

Kin_U

Monywa

Taungtha

Thayet

Wantho

Wetlet SAGAING

Layshi

MAGWAY Min

bu Pwintbyu

Tadaoo

Budalin

Chauk

Myittha

Meiktila

Pyawbwe Yemanang

yaung

Kamaing

Homalin

Myothit

Taungdwingyi

Yesagyo

Wundwin Nyaun

g_U

Indaw

Kyaukpadaung

Pakakku

Kawlin

Kanbalu

Lahe

Madaya Ayad

aw

Tatkon

Myaing

Maingtong

Injangyang

Chipwi

Sumprabum

Maingyang

Leacha

TAUNGGYI

Namsam(S)

Bhamo

Momauk

Namkham

Theinne

Nanmung

Narphan

Mangphant

Waingmaw

Lashio

Nam

tu

Maingsat

Maingyai

Hopang

Tsawlaw

Machanbaw

Putao

Demoso

Tachileik

Maingyaung

Maingpyat

Maukmai Link

hay Maingpang

Kyaingtong

Maingmao

Tantyang

Maingshu Maing_

Khat

Panyang

Mangtong

Mansi

Hsipaw

Kunghein

Pyinoolwin

Shwegu

Thanatp

in

Tanai

Namsam(N)

Yedashe

Zalun

Zigon

Mudon

Kawkareik

HPA_AN

Myaung

Sinbaungwe

Moe Nai

Sisaing

Panwaing

Mong La

Natmauk

Myinmu

Bogale

Myaungmya

Kyaikmayaw

Bilin

Thanbyuzayat

Minhla

Myingyan

Ngaputaw

Ngaputaw

HDI-IV (Current Townships)Kachin : Myitkyina, Waingmaw,Chin : Tiddin, Falam, Htantlang, HakhaRakhine : Paletwa, Buthidaung,

Maungdaw, Kyauktaw,

Mrauk U, Minbya

Southern Shan: Ywangan, Pindaya, Kalaw, Nyaungshwe, PinlaungDry Zone : Chaung U, Kyaukpadaung,

MagwayDelta Zone : Laputta, Bogalay,

Mawlamyinegyun

New Townships added in 2005Kachin : Putao, Machanbaw, Tanai,

Momauk, MansiChin : Tonzang, Madupi, Mindat,

KanpetletMon : Kyaikto, Bilin, KyaikmayawKayin : PhaanNorthern Shan: Kyaukme, Hsipaw, NawnghkioSouthern Shan: Pekhone, Loilem, NamsangKayah : LoikawDry Zone : Pakokku, Sinbaungwe, Thayet,

Myaing, Kamma, Ayadaw, Myaung, Taungtha, Nyaung U, Chauk, Yenangyaung, Taungdwingyi

Yangon : KayanDelta Zone : Ngapudaw, Kyaiklat, Yegyi, Za-

lun, Danubyu, Nyaung Don, Pantanaw

33


Annex (II) HDI-IV Programme Budget (including cost-sharing)

2005 HDI- IV (2003 - 2005) Total 2003 2004 Estimated

2003-2005 Actual Actual

Expenditure

1Integrated Community Dev.

Project10,214,0

762,688,9

662,525,1

10 5,000,000

2Community Development for

Remote Townships9,002,62

51,897,7

261,576,2

36 5,528,663

c/s - Australia 729,199 152,950 104,912 471,337

Gross9,731,82

42,050,6

761,681,1

48 6,000,000

3 Enhancing Capacity of HIV/AIDS 1,981,21

4 528,254 464,711 988,249

c/s - Japan 330,000 198,497 97,239 34,264

34


Gross2,311,21

4 726,751 561,950 1,022,513

4 Micro-Finance2,824,59

1 500,5811,161,1

11 1,162,899

5Integrated Household

Assessment2,709,59

1 440,0481,201,1

34 1,068,409

6 Agricultural Sector Review 821,794 290,812 425,692 105,290

Total HDI - IV and Expansion

27,553,891

6,346,387

7,353,994

13,853,510

35


Annex (III) Micro-Finance Sustainability Indicators

MYA/01/004: Sustainable Microfinance to Improve the Livelihoods of the poorSustainability Ratios In Kyats 1 Delta Dry Zone Shan State

Assets in March 20051,700,283,3

442,193,917,0

071,353,425,7

77

Assets in June 20052,187,730,9

782,452,383,7

841,513,831,3

19

Average Assets1,944,007,1

612,323,150,3

961,433,628,5

48Savings in March 2005 579,206,804 329,226,421 76,646,176Savings in June 2005 802,910,280 329,912,757 85,601,260Average savings 691,058,542 329,569,589 81,123,718 Operational Income 172,781,603 202,459,656 116,675,828Operational Expenses 62,881,209 44,110,050 43,790,139Cost of capital 26,515,208 23,094,648 319,707Loan loss provision 645,361 1,372,364 -27,800Inflation costs 103,368,261 164,470,417 111,581,648IPs costs 9,532,500 38,711,250 12,962,340Ratios for 2nd QTR 2005 Operational Self-sufficiency 274.77% 458.99% 266.44%Programme sustainability 193.28% 301.26% 264.51%Short term Financial sustainability 191.89% 295.23% 264.68%Long-term sustainability 89.33% 86.87% 74.95%With IPs costs 85.14% 74.50% 69.19%Ratios from 2nd QTR 2004 74.00% 64.00% 54.00%

Notes: Total investment income for PACT and GRET have been adjusted for the quarter, as the figures reported seem to be annual income, nor quarterly ones.

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Annex (IV) Assessment Mission Members

Mr Robert Shaw – Team leaderRobert Shaw recently retired after 12 years as General Manager of the Aga Khan Foundation, headquartered in Geneva, Switzerland. His career has been devoted to issues of rural and community development in Asia and Africa, and to global employment issues. Before becoming General Manager, Mr. Shaw conceived and led the Aga Khan Foundation's rural development programme, now active in Pakistan, India, Afghanistan, Bangladesh, Tajikistan, Kenya and Mozambique. Earlier, Mr. Shaw worked for the Ford Foundation as Representative in Pakistan and as Programme Advisor for Rural Development in Indonesia. He has also worked for The World Bank, the Overseas Development Council in Washington, and the British Council in Tanzania. Since retirement, Mr. Shaw takes occasional consultancies in areas of special interest to him.Shaw holds a B.A. in Social Anthropology from Cambridge University and Masters in Public Administration degrees from Princeton and Harvard Universities.E-mail: [email protected].

Dr. Øyvind Jaer - Team memberØyvind Jaer, Dr. philos (advanced Phd) in Social Anthropology with three books and a number of articles published internationally. Worked as University lecturer at the University of Oslo and as a researcher. Served as resident representative of Norwegian development NGOs in the Maldives and in Cambodia. Has also worked as development coordinator for the Ministry of Foreign Affairs, Norway, and as assistant director in the Norwegian Research Council. Since 1996 working as independent consultant with assignments mainly in Central-South and Southeast-Asian countries with various international organizations such as UNDP, UNOPS, World Bank, ADB, NGOs. More than 20 years working experience has now been gained in relation to village communities, organizations and institutions. Areas of expertise include livelihood and organizational analysis, feasibility studies, participatory planning and project formulation as well as project evaluation.E-mail: [email protected]

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mailto:[email protected]

mailto:[email protected]


Annex (V) Field Visits

Field Visits (9 – 18 July 2005)

Delta

Township Village DateMission

Bogalay Ah-Kaw (ICDP) 9 July RS and OJ

Kunthee Chaung (MF) 10 JulyRS and OJ

Kalargyi Chaung (MF)Phodi Kywe (MF)Sar Phyu Su (MF)

Mawlamyainggyun Khu Man (ICDP) 11 JulyRS and OJ

Kyaiklatt HDI Office 11 July RS and OJ

CDRTRakhine StateMrauk Oo Ywar haung taw 13 July OJ

Kyauktaw Singu chaung yaw 14 July OJAung Ya ywa 14 July OJ

Kachin State AreaMyitkyina A Kyair 17 July

OJ

Waingmaw Lamyang 18 July OJ

Dry ZoneKyaukpadaung Phet Taw Yay (ICDP) 14 July

RSTaung Hla (ICDP) 14 July RSYwar Thit Kalay (ICDP) 15 July

RS

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Documents

1web.undp.org/execbrd/word/Myanmar HDI Assessmen… · Web view7.12 Partnerships and Collaboration 23 8 Key Challenges and Recommendations 24 8.1 Programme Future 24 8.2 The Future