World Bank Continues Support For Rural Development In Bhutan

Washington, United States of America – The World Bank 2007-04-10 approved a US$10 million grant to improve rural access roads in the Kingdom of Bhutan. The Second Rural Access Project aims to improve transport infrastructure and services for selected rural districts. The project will finance the construction of new feeder roads and bridges as well as the upgrading of existing rural roads.

The project builds on the recently completed First Rural Access Project which fully achieved its development objective of improving the access of participating rural communities to markets, schools, health centers, and other economic and social infrastructure and has therefore increased the quality of life and the productivity of beneficiaries. Despite these accomplishments, however, significant unmet needs in rural infrastructure remain.

“Rural communities suffer from inadequate accessibility and are poorly connected to basic social and economic services, which are mostly concentrated in urban centers.” said Isabel Chatterton, Senior Financial Specialist and co-Task Leader for the project. “Despite the government’s recent efforts, the improvement in accessibility in Bhutan continues to be constrained by rough and fragile terrain and scarce financial resources.”

The absence of roads is a major contributing factor to poverty in this landlocked Himalayan country, with about 21 percent of Bhutan’s population living within one to four hour’s walk from a road, and another 21 percent live more than four hours away. This results in people’s having to pay 50 to 70 times more to transport their products to markets than people living in connected areas using motorized transport.

The project has two components:

• The Road Access component will construct 65 km of new feeder roads and upgrade and maintain 24 km of existing roads to all-season, feeder road standards;
• The Capacity Development and Implementation Support component will comprise of human resource development and training; technical assistance to pilot performance-based maintenance mechanisms; project implementation support; a socioeconomic impact monitoring study; and HIV/AIDS awareness training for construction workers.

The Second Rural Access Project supports the goals of the government’s Ninth Five-Year Plan. The Plan represents the country’s Poverty Reduction Strategy, which has central goals the achievement of improving the quality of life and income, especially for poor people; ensuring good governance; promoting private sector growth and employment generation; preserving and promoting cultural heritage and environmental conservation; and achieving rapid economic growth and transformation. These objectives are all based on Bhutan’s home-grown concept of Gross National Happiness which stresses the maximization of human happiness as its overarching goal.

“Rural accessibility has a significant impact on extreme poverty in Bhutan,”said Binyam Reja, Senior Transport Economist and co-Task Leader for the project. “The project is designed to reduce travel time, transportation costs, and commodity prices for beneficiaries and to increase their satisfaction with the improved road network.”

The US$10 million grant is from the International Development Association, the World Bank’s concessionary lending arm.

For more information about World Bank activities inBhutan, please visit: www.worldbank.org/bt

For more information about the project, please visit: web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=306149&menuPK=306182&Projectid=P100332