Programs of the World Bank

The program for rural development of the World Bank

At the beginning of the year 1997, when the reforms of the agricultural sector were negotiated with the World Bank, The Government of Romania declared its worry that rural localities may be left out of the processes. Later analysis effected by the Government by means of statistic investigations on the expenses of the household, showed that approximately 40% of the rural population is under the bareness limit. These investigations, presented at a seminar in Bucharest in July 1999, have indicated a series of factors that will lead to small incomes. Among these, there are the absence of the agricultural markets, a physically weak infrastructure and the absence of the income generated from agricultural activities. Therefore, the studies effected showed that the problems are multi-sectorial. The conclusion was that their resolution needs more the orientation from the agricultural development to the rural development. In October 1999, The Government asked that the World Bank prepares a Project of Rural Development that might support widely the rural increase and facilitate the access to the EU/SAPARD funds.
 The concept discussed for the Project of Rural Development was that of providing complementary technical assistance for rural development including SAPARD Program, that could be complementary, and the Project for Rural Financing of the World Bank. The Project of Rural Development will introduce complementary activities of SAPARD Program by creating the local public administration’s capacity and that of the private sector to generate viable projects of rural development.

The project will have three components:
The first component 

  1. The endowment of the local public administration’s capacity regarding the implementation of rural development activities: technical assistance, education, equipment. The main purpose of this component is to help everybody implicated in the rural development and to support real partnerships, to sustain the local administration in introducing new transparent decision and action mechanisms that can be quantified by the citizens. The activities of institutional capacity increase at the county level and at commune level will be concentrated on the supply of technical assistance and education for the planning of rural development activities, establishing properties, identifying projects and planning the budget in a way that should support the investments in the rural environment. There will be given support for the technical and financial evaluation of the handed in projects. The accent is put on the improvement of transparency and responsible mechanisms of all those involved in the projects’ implementation process. This assistance intends to introduce an identification and election system of the development properties in the rural environment, as well as to create for the main partners involved in the rural development – communes, counties, regions- the knowledge that will help them in the process of planning and decision, in the creation of rural development strategies. This assistance tries to eliminate the deficits that exist in the technical assistance program offered for the SAPARD implementation, supporting the rural communities regarding the preparation of the projects.

The second component

  1. (The rural infrastructure) The Projects of Rural Development will finance infrastructural projects (roads and water/sewerage supply) proposed by the commune and county boards that are conform to the technical standards approved by the project and that fulfill the criteria of economical viability. Clearer, the purpose is to introduce principles such as: the most adequate technical solution at a minimum cost, the cost-benefit analysis in the planning, projection and implementation of the infrastructure. The sustainability arrangements (function mode, sustenance responsibilities) will represent an important aspect considered by the Rural Development Project.  The project will also finance the technical personnel’s education from the county or that of private firms. 
  2. This component sustains financially types of infrastructure that are not eligible in the SAPARD Program and that represent important needs for the rural areas (for example county roads).

The third component

  1. The project’s management (Technical Assistance and equipment for the coordination and implementation of the Rural Development Project). The National Coordination Committee will coordinate the Rural development Project at national level. The Project’s Management Unit (PMU) that shall be located in the Ministry of Local Public Administrations will assure the technical secretary of this committee. In each of the five selected regions, there will be Project Implementation Units (PIU), placed in the Regional Development Agencies (RDA). They will coordinate the project regionally. The RDA capacity of fulfilling the monitoring activities, evaluation and acquisitions will be supported according to the project’s objectives.

The proposed implementation system
 This project will have three decisional levels:

  1. The beneficiaries – The county and local councils will have the role of programming and implementation in conformity with their territorial responsibilities and of the existent partner agreements.
  2. Regional coordination – The Regional Development Agencies will have monitoring, evaluation (data collecting for the Management System of Information, preparing technical and financial rapports) and regional coordination (assistance regarding the acquisitions for counties and communes) functions, so that the capacity developed in the first component to be replied and delivered to another county that participates in the second phase.
  3. Coordination at national level – During the project’s implementation the National Synchronization Committee (NSC) will allot the funds of the Rural Development Project for regions/counties, will offer general leading, will propose modifications of the project’s structure during implementation if the monitoring and evaluation will indicate the need for corrections and will assure the correlation of the regional and national priorities.  In order to complete its duties NSC will be sustained by PMU, which will work as a technical secretary and will maintain the communication with the World Bank.  The PMU will transmit replanning requests to the Bank, will send periodical reports and will be responsible for the central goods and services acquisition.  The PMU will be formed out of specialized staff, for which the Ministry of Public Administration will put at hand offices and facilities. The Unit will be directly subordinated to the Ministry or to a State’s Secretary and will be financed by the project.

In each selected county, the financial allowance needed for the implementation of the public works and technical assistance projects will be offered through two windows:
- The first window – county level – The first window will finance the projects of county infrastructure of which will benefit at least two communes, such as: intercommunal roads, big projects of water and sewerage supply etc. The applicants will be commune associations or The County Council. The project’s dimension from this window will be larger than that of the projects from the second window. 
- The second window – commune level – The second window will finance projects in the communes. Because a first objective of the Rural Development Project is the development of the local initiative, by means of this program the participation of the civil society in the decisional process will become stronger, so that poor villages can be represented in the planning process of the local development. If in the pre-selected communes in the Rural Development Project, exist isolated villages or communities with infrastructural necessities, but whose needs are not among those anterior for the whole commune, than these small communities could be assisted regarding the preparation of project proposals for the Romanian Fund of Social Development, that is specialized in such small projects of local development.

 Local contribution
For all the projects financed by the Rural Development Project there will be necessary a contribution of the beneficiary, paid with money or nature, representing 10% of the financed project’s value.
The loan’s value
The loan’s value will be 100 million $, sum divided between the firs and the second phase of the project, on a total period of 5 years.