afrol News, 8 April - The Malagasy Regional Social Fund Project has been awaiting additional Word Bank financing for two years, after an environmental assessment proved subprojects could "adversely impact the environment" on Madagascar. The fund has so far "played a key role in rural development of Madagascar," according to the bank.
The Malagachy Fonds d'Intervention Pour le Developpement (FID) operates the country's Social Fund Project, essential to rural development and poverty reduction. In 1999, FID and the Malagasy government asked to borrow an additional US$ 137 million to finance further operation of the project, in general regarded as very positive by the bank, but a negative environmental assessment has contributed to delay the financing.
FID, which is a non-profit association for public service, "is clearly perceived as the mechanism which has actually come through and supported rural communes/communities by financing close to 1,800 community development sub-projects nationwide," according to a World Bank assessment. "As a result, the assumption is that this project will maintain the momentum created by FID," the bank concluded already in 1999.
The Regional Social Fund Project focuses on community-based infrastructure sub-projects implemented by the communities and communes themselves (including social mobilization, small scale infrastructure development, and improved service delivery activities), capacity building activities for communities/associations and communes, and the private sector (NGOs, small contractors, consultants, artisans, and skilled labour). It also, however, includes larger infrastructure projects, financed by tendering processes and contracts awarded to small enterprises to undertake works.
According to an environmental assessment, the implementation of the project however "is expected to adversely impact the environment, due to the construction of reservoirs, bridges, and, effluent management, particularly as it relates to soil erosion, flooding, deforestation, and potential adversity on historical, and archaeological sites."
The environmental assessment reviewed the legal environmental context in Madagascar, suggesting institutional measures to integrate the National Environmental Office with the works of the Regional Consultative Committee, in order to achieve consensus on agreed recommendations. Mitigation measures regarding technical aspects included construction of terraces on slopes to stabilize the terrain, and prevent flooding, to be further enhanced by re-vegetative practices, which should contain soil erosion.
Thus, the project was given the "Environmental Category F" by the bank - meaning it includes "subprojects that may result in adverse environmental impacts." One and a half year has passed, and the World Bank's Board of Directors has not yet approved the project.
World Bank evaluations show "that FID has played a key role in rural development of Madagascar," where poverty has become entrenched in the social fabric. In 1993, seven out of 10 Malagasy were considered to be poor (i.e. they could not purchase a minimum 2100 calorie food basket and essential non-food items); six out of 10 are extremely poor (i.e. they cannot even purchase the food basket). Based on government estimates in 1997, it appears that only 3 out of 10 Malagasy are now considered to be extremely poor.
Over 85 percent of the poor live in rural areas, where poverty is also deeper. About 18 percent of poor households are headed by women, engaged mostly in farming. Poor households have around 5 members, compared to 4 for non-poor households, and are more likely to be: illiterate, not send children to school, have malnourished children, use wood as a main source of fuel, and rely on lakes, ponds, rivers for drinking water.
According to an assessment by the World Bank itself, "it is clear that rural poverty, which has as its main cause the limited productivity and competitiveness of the agricultural sector, has been exacerbated by the lack of productive and social infrastructure, and an over centralized decision-making process for the allocation of resources."
The Government's central objective is to steadily reduce the incidence of poverty by half from about 70 percent in 1996 to 35 percent in 2015. "This target can only be realized by achieving very ambitious economic growth rates, while reversing environmental degradation and improving the assets of the poor," says the World Bank.
FDI's Social Fund has so far been able to improve the situation in primary schools as a result of the new construction, such as the redynamizing of school life, improved working conditions for teachers, increased enrolment rates, decreases in the repetition of grades, and parents becoming much more interested in schooling related matters.
For health, the key impacts were the increased attendance of health posts and maternities. In most cases, prior to this rehabilitation, health posts and maternities were basically closed. In general, for social infrastructure type sub-projects, poorer beneficiaries showed an increased willingness to access these services.
Small irrigation projects by the FID in general showed a positive rate of return. Cultivated surfaces increased, which in turn had a positive impact on crop output and commercialised rice production, and as a result farmers have had to hire salaried workers.
On the other hand, the Malagasy environment is marked by severe problems. "The world's most endangered vegetation type" are the forests of Madagascar, according to the World Wildlife foundation. These forests have been reduced to some 5% of their original area by agricultural and urban developments. The most pressing environmental problems on the ecologically unique island are soil erosion (as a results from deforestation and overgrazing); desertification and; surface water contaminated with raw sewage and other organic wastes. A high number of species of flora and fauna unique to the island are endangered and many are already extinct.