Financial Analysis of Chia Se Income Generating Projects

The Vietnam-Sweden Chia Se Poverty Alleviation Programme is not a conventional community development programme that only focuses on improving livelihoods of selected communities. It is a programme with a clear political dimension: It wants to achieve poverty alleviation through democratisation, and, in this way, make a contribution to a ‘just and fair and sustainable society’. It is thus tufted on the Rights Based Approach to poverty alleviation adopted by Sida. It is also in line with current overall Vietnamese policy guidelines and decrees on decentralization and grass roots democracy. Operating inside the Vietnamese government structures at all levels, it supports the localized Socio-economic development plans, seeks alignment with and support to line ministries, and is thus well placed for replicability on a larger scale.

The Local Development Fund (LDF) and Local Planning and Management for Development (LPMD), constitute the core of the Programme. It is expected that by giving local communities access to quite sizeable amounts of money to be used and managed at their own discretion and through their own planning, the Programme will create confidence among people in their own management capabilities of all available resources, and empower them to raise also other issues and express demands when dealing with higher administrative levels in other matters.

Whereas several studies and reviews have documented the clear and strong impact of the programme on the political side, i.e the Empowerment of the villagers, there is little systematic analysis of the impact on poverty alleviation itself, on livelihoods and income generation.

Furthermore, micro-level economic analyses of the various forms of income generating activities funded under the Local Development Fund have just started for some of the most common activities selected by the farmers.

Finally, marketing of old and new produce have been identified by the farmers themselves as a bottleneck in achieving better income for the households.

Rationale for assistance by an international expert, in terms of priorities

1. June 2nd the Consultative Groups of Donors (CG) will meet, to review progress of various developments in Vietnam. Many programmes/projects prepare background material for this important meeting. Last meeting Chia Se presented a study on the successful empowerment of the villagers that has taken place in the project area. Chia Se now wishes to document the impact of its work on the poverty alleviation and income generation for these villagers. The consultant should analyze existing data, supplemented with primary data where required, to present a brief but concise publications of achievements and lessons learned from use of the Local Development Fund. The focus should be on the direct beneficiaries of the Chia se interventions, i.e. The household, the villages and communes, and more indirectly the districts and even the provinces in which Chia Se is active. A publication of around 20 pages including pictorial material is normal for this event. Lay-out and printing can be done locally.
2. There is an expressed need to also look at the relative economic impact of the interventions themselves, as selected and decided by the clients. The farmers are receiving little help in choosing how to use the LDF, and may not make optimal economic choices. A micro-economic analysis of the major interventions available should be carried out, in a farming systems context. Some work is underway, more work is needed, and would also help in making the assistance given more both effective and efficient.
3. If time allows, the consultant should also look at gains to be made in marketing. Improved production without good market linkages may go for naught, and the sought after poverty alleviation may not take place. The consultant should therefore also review the marketing chain for the key commodities in the Chia Se areas, and suggest ways of improving marketing. Key concerns are reducing the cost of marketing, and increase the value added as close to the producer as feasible.