2 June, Saravane, Laos — Oudone Vongkham, 60, lives in Naxay Noi Village, about 22 kilometres from the district of Saravane, on the southern tip of Laos. He spends his days working on his farm. When a new market was built in his village — with a newly paved road, linking his farm to the market — transporting and selling produce became possible for him. Now his family has a small shop in the market where his wife and their nine children take turns to sell produce all day.

“People know better how to do business now because we have a market in our village”, said Vongkham.

The construction of community markets and farm-to-market roads has helped many other farmers like Vongkham in 35 of the 42 “poorest” districts. (There are additional 25 “poor” districts out of the country’s total 140 districts.)

In 2005, UNDP and the UN Capital Development Fund came up with a funding mechanism that provides small-scale public works investments at the district level. Luxembourg and Switzerland also gave financial backing to this initiative, which became the District Development Fund. It is this initiative — designed to make meaningful poverty reduction nationwide by focusing on the needs of poor communities — that has brought the Vongkham family the community market and the paved road.

Furthermore, with the construction of primary schools under the District Development Fund, all the nine Vongkham children now attend school.

“In 2005, we had 27 villages in the district that were very poor. Thanks to the DDF, the number of poor villages decreased to two villages or 600 households”, said Siheng Homsombath, district governor of Saravane. The goal is to improve infrastructure to provide clean water, better health care and more business opportunities in the agriculture sector, he explained.

“We also need the local government staff to improve their skills and knowledge to manage the fund more effectively”, he added.

The innovation of the District Development Fund is that it has given the planning and spending power to districts, enabling them to directly address local needs through a participatory planning process. This mechanism allows district authorities to respond to the most urgent MDG challenges with specific responses in their district. It has empowered communities to carry out their own development activities.

Between 1992 and 2008, poverty declined steadily from 46 to 26.9 per cent, according to the latest national statistics, thanks to pro-poor policies and interventions such as the District Development Fund. Approximately 950,000 people were lifted out of absolute poverty in Laos whose population is about 6.2 million. Laos is on course to achieve the first target of the Millennium Development Goal of cutting poverty by half in the next five years.

At the national level, the Laos Government is drafting the seventh national socio-economic development plan covering the period 2011 – 2015 with more focus on promoting local ownership and allocating resources to achieve outcomes at the local level. The expansion of the District Development Funds project and the preparation of more than 100 Kumban (“village cluster”) plans in the 42 poorest and 25 poor districts are some of the ways in which UNDP contributes to the government’s MDG achievements.

“Before this, everything had to be organised by the provincial government and the outcomes of those projects were not very good. But now, all the projects are stable”, said the district governor.

Story by Katrin Park and Inka Leisma for the United Nations Development Programme. (Photo: United Nations)