Challenges to Rural Poverty Reduction in Viet Nam - Oxfam Blogs
Challenges to Rural Poverty Reduction in Viet Nam - Oxfam Blogs
Challenges to Rural Poverty Reduction in Viet Nam - Oxfam Blogs
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Five-year Synthesis Report<br />
Part 2: <strong>Challenges</strong> <strong>to</strong> <strong>Rural</strong> <strong>Poverty</strong> <strong>Reduction</strong> <strong>in</strong> <strong>Viet</strong> <strong>Nam</strong><br />
Positive social impact is a strong po<strong>in</strong>t of CDF compared <strong>to</strong> other f<strong>in</strong>ancial sources. CDF<br />
can help <strong>in</strong>crease community cohesion and participation of the poor, also facilitate the<br />
roles of exist<strong>in</strong>g community <strong>in</strong>stitutions.<br />
121<br />
BOX 8.2. Decentralized f<strong>in</strong>anc<strong>in</strong>g <strong>in</strong> the form of CDF enhances<br />
people’s participation<br />
In late 2010, <strong>Oxfam</strong> funded CDFs of 60 million VND <strong>in</strong> four communes <strong>in</strong> Tuong<br />
Duong District (Nghe An). Local residents were <strong>in</strong>volved <strong>in</strong> the development and<br />
implementation of CDF projects. The most outstand<strong>in</strong>g result was the promotion of<br />
counterpart fund<strong>in</strong>g and close moni<strong>to</strong>r<strong>in</strong>g by local residents of small <strong>in</strong>frastructure<br />
projects.<br />
--- “Such a small fund is a catalyst that helps the plan <strong>to</strong> be better. The surpris<strong>in</strong>g<br />
outcome is active and enthusiastic participation by local residents. Never before<br />
have villagers contributed more than 100 million VND. In the past, local people only<br />
contributed 5% of the <strong>to</strong>tal cost, and it was very difficult <strong>to</strong> mobilize, and everyth<strong>in</strong>g was<br />
done by contrac<strong>to</strong>rs. This assistance meets the urgent needs of local residents <strong>in</strong> this<br />
type of projects.” (Leader of the F<strong>in</strong>ance-Plann<strong>in</strong>g Division of Tuong Duong District).<br />
Tam Thai commune was provided with 60 million VND for a CDF. Local residents<br />
contributed 84 million VND of labour and locally available materials <strong>to</strong> build a canal<br />
and upgrade a dam. Xa Luong commune was also provided with a 60 million CDF<br />
and another 60 million VND was provided by local residents <strong>to</strong> build transport roads.<br />
In general, local contributions are more than 50% of the <strong>to</strong>tal cost of a project.<br />
Decentralized f<strong>in</strong>anc<strong>in</strong>g like CDFs help mobilise community resources and encourage<br />
people <strong>to</strong> be less dependent on the Government.<br />
Lessons learned from CDF implementation<br />
Comb<strong>in</strong><strong>in</strong>g the reform of socio-economic development plann<strong>in</strong>g, f<strong>in</strong>ancial<br />
management and community moni<strong>to</strong>r<strong>in</strong>g capacities and decentralized f<strong>in</strong>anc<strong>in</strong>g<br />
<strong>in</strong> the form of CDF. Experiences show that the relationship between participa<strong>to</strong>ry<br />
plann<strong>in</strong>g, f<strong>in</strong>ancial management and community-based supervisory capacities is the key<br />
<strong>to</strong> the success of CDFs. Support activities <strong>to</strong> participa<strong>to</strong>ry plann<strong>in</strong>g and capacity build<strong>in</strong>g<br />
<strong>in</strong> f<strong>in</strong>ancial management is a prerequisite for the implementation of CDFs. Decentralized<br />
f<strong>in</strong>anc<strong>in</strong>g <strong>in</strong> the form of CDFs is a “catalyst” for the better implementation of participa<strong>to</strong>ry<br />
plann<strong>in</strong>g and enhancement of community-based supervisory capacities.<br />
The advantage of CDFs is they are small-scale and have simple procedures.<br />
Although the <strong>in</strong>frastructure facilities funded by CDFs are small they are of great effect.<br />
CDF f<strong>in</strong>ancial procedures are more straight forward than other programmes and<br />
projects. Community-based construction can develop the strength of CDFs, because<br />
local residents are themselves <strong>in</strong>volved and the projects are realised by local skills. As<br />
CDF projects are developed by local communities there is a strong sense of ownership<br />
and responsibility, reduc<strong>in</strong>g waste and <strong>in</strong>efficiency.<br />
Implementation of CDF <strong>in</strong> coord<strong>in</strong>ation with community <strong>in</strong>stitutions with<br />
flexibility <strong>to</strong> meet local needs. Initiatives funded by CDF can be coord<strong>in</strong>ated with<br />
exist<strong>in</strong>g community <strong>in</strong>stitutions as they can help mobilize more resources effectively.