Mongolia: Arhangai Rural Poverty Alleviation Project - IOE
Mongolia: Arhangai Rural Poverty Alleviation Project
Extract of Agreement at Completion Point
The Core Learning Partnership and the users of the evaluation
In 2005, IFAD's Office of Evaluation (OE) conducted a completion evaluation of the Rural Poverty Alleviation Project (ARPAP) in the provinces (aimags) of Arhangai and Huvsgul, Mongolia. An evaluation approach paper was prepared in April 2005 and discussed with the Fund's Asia and Pacific Division (PI), the Government of Mongolia (GOM) and other partners in Ulaanbaatar during the reconnaissance mission in June 2005. As per usual practice, an evaluation core learning partnership (CLP) was formed comprising representatives of the Ministry of Food and Agriculture (MOFA), the Ministry of Finance (MOF), the Asia and the Pacific Division, and OE.
The main evaluation mission took place in September 2005, in concomitance with a small-scale survey in the field to complement the existing data set. The survey was commissioned by OE and conducted by the Centre for Policy Research based in Ulaanbaatar. A draft evaluation report was distributed in July 2006 and a final workshop was organised in Ulaanbaatar on 27 February 2007 to discuss the findings from the evaluation and lay the basis for its Agreement at Completion Point (ACP). The meeting was attended by members of the core learning partnership and other key stakeholders. The ACP illustrates the Government of Mongolia and IFAD's agreement on the main findings from the evaluation, as well as their commitment to adopt and implement the evaluation's key recommendations within specific timeframes.
Main evaluation findings
Implementation progress. Under the credit component, quantitative targets set by the Appraisal Report and revised by the Mid-Term Review (MTR) in 1998 were exceeded for livestock restocking (72 per cent more animals were redistributed to 41 per cent more herders). Loan recovery in Arhangai was 100 per cent during the first two years but declined over the lifespan of ARPAP, particularly following heavy losses of animals due to (a) the heavy winter conditions (dzuud) experienced in the project area between 1999-2001; (b) the 2003 drought; and (c) the insufficient compensation paid to herders by the insurance scheme proposed at the design stage. In Arhangai, only 28.6 per cent of those who took loans in 1997 are still repaying regularly; in Huvsgul, the figure is higher (55.4 per cent).
Regarding vegetable production, activities under this second component included provision of loans to 4 276 beneficiaries through supply of seeds, tools, herbicides. Repayment rates were 85 per cent in Arhangai and 71.8 per cent in Huvsgul. Crops planted included potatoes, carrots and cabbages. The analysis of this component revealed that the area planted increased while credit was available and dropped off once loans were no longer accessible.
Income generation activities were carried out in Arhangai aimag only. A total of T 16.8 million (US$15,000 in December 2003 at the time of project closure) was disbursed to 237 borrowers. Activities undertaken were carpentry, sewing, felt making, trade, and food processing. In 2002, a UNOPS mission had identified a number of issues concerning the implementation of this component by the Project Implementation Unit, most notably, the subsidized interest rate of 12 per cent per annum, the lack of targeting the poor, disbursement of the full loan upon commencement though only part of the funds were required for the credit activity at that point, and the limited range of credit activities. Recommendations to correct the course of action on this component were not implemented.
Technical assistance services for Project Management and Credit, Livestock Restocking and Monitoring and Evaluation were not utilized. Only towards the end, the project signed contracts with the Centre for Nomadic and Pastoral Studies to provide lists of pastures and the households associated, in case pasture leases were implemented.
Project relevance and design. The privatization process in the livestock sector, which followed the dismissal of the command economy, had resulted in the emergence of households with insufficient animals to provide an adequate means of livelihood. Hence, the project sought to redress this situation through a livestock distribution programme which would provide livestock as loans to such households. In addition, during the same period, a shortage of vegetables was having an adverse effect on the nutrition of the population, especially on impoverished sum1 centre residents with low or no livestock holdings. Loans for vegetable production had the additional advantages of promoting improved nutrition and to focus on female-headed households. Based on the above, the evaluation concluded that the project was highly relevant towards rural poverty alleviation efforts in Mongolia.
Impact. Overall, the impact of the project has been limited, and in a few cases, negative. Some households were assisted to develop a viable herd, but almost as many were saddled with serious long-term debt for which they are still being pursued. As female-headed households are the most vulnerable group, the negative effects of debt repayment have affected them more. The decade since 1995 has seen accelerating environmental damage due to increased goat production and overgrazing. The vegetable credit is probably the most successful element of the project; there has been a visible change of culture in sum centers and certainly improved nutrition for children, although vegetable growing has declined after the project closed, thus raising concerns about the long-term sustainability of benefits.
Recommendations agreed upon by all partners
Strategies and approaches
Debt relief and livestock loan repayment. A failure to consider the consequences of recurrent dzuud serious enough to eliminate entire family livestock holdings, and the inappropriate/insufficient public insurance scheme left many households with insurmountable repayment problems. The financial burden on aimags has meant that the poorest households are still being harried for debts, and it is unrealistic to expect them to repay. Female-headed households are particularly affected, as many other beneficiaries with more resources have simply decamped.
Summary recommendation
- The GOM should urgently engage in addressing the issue of loan repayment by those beneficiaries in repayment difficulties. IFAD should provide GOM with the necessary support and assistance in finding an institutional solution agreeable to all parties concerned. The GOM should also consider developing an overall policy over debt repayment.
Partners involved: GOM, IFAD
Agreement: Aimag authorities to submit an official request for debt cancellation to MOFA and MOFE within four weeks from the date of the workshop, that is, by 30 March 2007. Concerned Ministers should consider the issue and act upon within four weeks from receipt of the official request from the Aimags, that is, by 30 April 2007. IFAD would be kept informed on the progress and GOM would share with IFAD any copies of relevant documents in this regard for due follow-up.
Knowledge systems. Mongolia has no less than four institutions engaged in rangeland monitoring, yet there is a complete absence of communication between these institutions, as well as a failure to make any of their results public.
Summary recommendation
- GOM, with the support of IFAD, should explore the opportunity of capitalizing on existing knowledge and information available with in-country rangeland monitoring institutions, ensuring the transfer, adoption and dissemination of scientific advice to Government and project staff to facilitate the early identification of rangeland issues and the necessary remedial actions.
Partners involved GOM, IFAD
Agreement: Proposals formulated by workshop participants referred mainly to better cooperation and alignment of various project actions, as currently each aimag works along a different approach. For the ongoing Rural Poverty Reduction Programme (RPRP) and other similar interventions, it was proposed to create better linkages among the RPRP sub- projects and at the grassroots-level organizations through regular meetings, exchange visits related to information gathering and sharing knowledge. The concept of the RPRP training centres or recently called "business incubators" needs to be well understood by all stakeholders in this regard. IFAD agreed to develop proposals to enhance the understanding and subsequent actions within six months from the date of the workshop (end of August 2007).
Project management
Supervision. The project failed to execute many ‘soft' components of the project, such as socio-economic data collection and rangeland monitoring. Both UNOPS and IFAD should have acted to ensure compliance, which has had adverse consequences for beneficiaries at the later stages of project implementation.
Summary Recommendation
- To ensure compliance with the project design and with recommendations of supervision missions, IFAD and its Cooperating Institution need to clearly define the supervision arrangements to allow for continuity and follow-up. In particular, it is recommended that (a) the Cooperating Institution responsibilities be more clearly defined in final agreements; (b) clear performance indicators for the Cooperating Institution be developed and the Cooperating Institution be held accountable for them; (c) IFAD provides the needed guidance to the Cooperating Institution in supporting the project to establish a good system to monitor and assess project impact. On supervision activities, IFAD must reflect on costs arrangements to allow, whenever possible, appropriate funding and time allocation to missions to ensure better quality feedback to the GOM, the Project Implementation Unit and to IFAD.
Partners involved: IFAD, UNOPS
Agreement: IFAD agreed with the proposed recommendation and will raise the issue with the concerned Cooperating Institution as soon as possible.
Translation. A major reason for non-implementation and non-compliance of supervision mission recommendations has been the absence of translations, mainly from English to Mongolian, but occasionally Mongolian to English as in the case of the Subsidiary Loan Agreement. Supervision reports were never translated, and the Mid-Term Review and all types of supplementary documents were left in English. As a consequence, concerned parties experienced difficulties in follow-up on supervision recommendations
Summary recommendation
- Future Loan Agreements should explicitly reflect the need to have official and other key documents translated from English into Mongolian and vice-versa, in particular those that have implementation implications, such as the SLA and UNOPS supervision reports. IFAD and the GOM should define the translation modalities and the financing of translations prior to project start-up.
Partners involved: GOM, IFAD, UNOPS
Agreement: The Project Support Unit at MOFA will take immediate action on ensuring appropriate translation of key documents, as no/poor translation and communication may cause unnecessary misunderstandings and delays in project activities. Supervision reports will be translated within two weeks following submission by the Cooperating Institution and the review by IFAD.
Natural resources management and environment
Extension. Few herders received effective advice on improved animal production. There was also a degree of misunderstanding on the definition of the term, which has been taken as disseminating information about the achievements of the project. Advice concentrated mainly on repayment conditions rather than actually improving animal production.
Summary recommendation
- For the provision of extension services, the GOM should carry out a needs analysis among beneficiaries to better understand what type of information they require and on what specific issues. Extension services should be needs-based, making use of the most appropriate means – radio, workshops or other methods to ensure the delivery of such services.
Partners involved: GOM.
Agreement: The GOM agrees that extension is critical and needs to be strengthened. The proposals would stretch from a better, participatory-based identification of training needs mechanism to monitor and evaluate training efficiently and the role of media and other Information and Communication Technology tools. Yet, a decision on how to implement and finance proposals on this recommendation will require some time of reflection by the GOM. This should be done prior to future IFAD-funded interventions in the country.
Rangeland assessment. Rangelands in Arhangai and Huvsgul have undergone major damage since implementation of the project in 1996, although the exact extent causes and remedies of this are much debated. Yet, one reason for this is a major switch in emphasis in the pastoral economy towards goat production especially after the 2001 dzuud, a fact recognised by all households interviewed, and supported by official statistics. The consequent loss of plant species diversity may well have accelerated the mice and grasshopper invasions.
Summary recommendation
- IFAD has recognized the importance of undertaking effective rangeland impact assessment and provisions to this regard have been made in the project design of the ongoing IFAD-funded intervention in the country. It is recommended that a high degree of priority is given to this activity and be actively and effectively pursued by all parties concerned in the ongoing IFAD project. At the same time, the GOM and IFAD should explore and capitalize further on knowledge concerning the technical aspects of extensive pastoralism in low-temperature regions.
Partners involved: GOM, IFAD
Agreement: The issue of rangeland assessment has been part of the broader issue under pasture management. At present, the most important issue for the GOM has been pasture water supply, especially in relation to the ongoing IFAD intervention, i.e. the RPRP. On this issue, the GOM seeks the support of IFAD, while MOFA through RPRP would submit a proposal for developing appropriate water harvesting technologies and supply schemes within the next six months from the date of the workshop (by end of August 2007). The issue was broadened to propose a consolidation of the legal environment and regular (annual) rangeland assessment processes. MOFA explained that work on legal environment is ongoing.
Risk preparedness By 2004, about 40 per cent of project beneficiaries had less livestock than when they took the loan. The principal reason was the frequent incidence of dzuud, a climatic phenomenon whose erratic occurrence was already known prior to project appraisal. In addition, the insurance scheme devised at appraisal proved to be inappropriate. Effective risk management includes the establishment of safety net mechanisms along with pasture management to avoid localized overgrazing.
Summary recommendation
- The ongoing IFAD intervention in the country (RPRP) has taken into account some of the lessons emerging from ARPAP on this specific issue. It is therefore recommended that the GOM pursues the provisions for safety nets as depicted in the RPRP design document to minimize the impact of adverse weather conditions, especially dzuud. In particular, the GOM should ensure the creation and support of beneficiary-led rangeland management and monitoring committees, assist veterinary and breeding services, purchase and make available hay-making equipment, and establish a dzuud emergency fund. In addition, the GOM should provide, in collaboration with IFAD, a policy framework for risk preparedness to ensure the sustainability of selected interventions in the country.
Partners involved: GOM, IFAD
Agreement: MOFA, MOF and IFAD agreed to the above proposal as part of the ongoing RPRP. In addition, all partners agreed to review the current proposals during the oncoming Programme Progress Review mission and to decide which remain feasible for implementation. The proposals included: establishing of a risk fund, strengthening the insurance and banking system for rural areas, adjust extension systems and its sustainability towards a focus on risk preparedness by herders and other rural residents. The involved partners will address the issue of capacity building on how to react to risk mitigation. All activities mentioned to be undertaken as soon as possible.