66315 C ountry Development Partnership for Poverty Analysis and Monitoring C D P - P A M 1 ABBREVIATIONS ASEM Asia-Europe Meeting BMN Basic Minimum Need CDD Community Development Department CDP Country Development Partnership CDP-PAM Country Development Partnership on Poverty Analysis and Monitoring GDP Gross Domestic Product KKU Khon Kaen University MDGs Millennium Development Goals MDGR Millennium Development Goals Report NESDB National Economic and Social Development Board NGOs Non-Government Organizations NRD2C Village Status database NSO National Statistical Office PCU Project Coordination Unit PRS Poverty Reduction Strategy RTG Royal Thai Government SES Socio Economic Survey TAOs Tambon Administrative Organizations TDRI Thailand Development Research Institute UNDP United Nations Development Program UNESCAP United Nations for Economic and Social Cooperation for Asia Pacific Note: Royal Thai Government Fiscal Year (October 1 – September 30) TABLE OF CONTENTS PREFACE I ACKNOWLEDGEMENTS II EXECUTIVE SUMMARY III I. POVERTY IN THAILAND 1 II. CDP-PAM FRAMEWORK 4 III. PHASE I ACTIVITIES 6 A) Poverty Database Development 8 B) Measurement and Analysis of Poverty, Inequality and Vulnerability 11 C) Development of Poverty Reduction Strategy 14 D) Poverty Monitoring and Evaluation System 17 IV. PHASE II AND GOING FORWARD 18 ANNEXES Annex I Policy Matrix: Phase I 22 Annex II CDP-PAM Phase I Results Summary 30 Annex III CDP-PAM Phase II: Framework 42 TABLES Table 1Poverty situation in Thailand 1 Table 2Government Expenditure on Poverty Reduction Programs 3 Table 3Summary of CDP-PAM Phase I activities 7 PREFACE Eradicating poverty is a high priority for Thailand. With poverty reemerging as a central concern in the post-crisis period, Thailand has entered a process of reviewing poverty strategy – related policies, programs and projects. The government has recognized poverty alleviation as a high priority in the Ninth National Economic and Social Development Board (2002 –2006). Based in this framework, it also developed the Poverty Reduction Strategy, organized around five main strategies. The Royal Thai government has initiated to stimulate grass root economy. The Coun- try Development Partnership on Poverty Analysis and Monitoring (CDP-PAM), launched in May 2002, creates a welcome opportunity for the World Bank and other development partners to assist the government in achieving its goal. The CDP-PAM is a partnership program between the Royal Thai Government, with the National Economic and Social Development Board (NESDB) as a main partner, and the World Bank. It supports government’s effort in alleviating poverty through technical assistance and capacity building. The program itself is based on voluntary and mutual basis. Initial activities supported under phase I of CDP-PAM are classified into four areas: poverty database; measurement and analysis of poverty, inequality and vulnerability; development of poverty reduction strategies; and poverty monitoring and evaluation. Apart from the NESDB, other partners include the National Statistical Office (NSO), and Thailand Development Research Institute (TDRI). Capacity building and technical assistance have been mobilized through grant resource from the Asia-Europe Meeting Trust Fund (ASEM TF). Progresses made under CDP-PAM are reviewed annually through its monitoring workshop. They were held on October 29, 2003 and November 26, 2003, with participants from various stakeholders, including representatives from government agencies, civil society, and develop- ment partners. The objectives of workshops are to review and evaluate implemented activities in each area, and to obtain feedback on the design of the program as it moves forward. This monitoring report assesses overall performance of CPD-PAM in phase I, provides details of activities implemented, and lays down framework for phase II. It also integrates comments and suggestions from stakeholders during the monitoring workshop. As it moves to phase II, CDP-PAM will continue to support both government and non-government counterparts, together with other development partners in poverty related areas. In its second phase, NESDB will continue to be a focal point while aiming to expand partnership with development agncies both at the global and local levels. We look forward to our continued partnership on this important area. (Chakramon Phasukavanich) (Ian C. Porter) Secretary General Country Director, Thailand National Economic and Social Development Board The World Bank ACKNOWLEDGEMENTS This report was carried out under the general direction of Mr. Kittisak Sinthuvanich, Senior Advisor; Dr. Witit Rachatatanun, Executive Director of Community Economic Development and Income Distribution Office, National Economic Social Development Board (NESDB).The work has been prepared by a team led by Dr. Priyanut Piboolsravut, of the NESDB and comprising Ms. Suntaree Rangkusone, Ms. Anya Suwanasrinon and Ms. Patcharaboon Prabhasanobol, of the CDP-PAM Management Unit. The team was closely assisted by Dr. Kaspar Richter (Task Manager), Washington DC and Ms. Khuankaew Varakornkarn, of the World Bank Bangkok Office. Analytical inputs were provided by Dr. Somchai Jitsuchon, Thailand Development Research Institute (TDRI); Prof. Dr. Medhi Krongkaew, National Institute Development Administration; Prof. Dr. Heather Laurie, University of Essex; Prof. Boonsong Wattanakit, University of Khon Khaen; Prof. Dr. Nanak Kakawani; Prof. Dr. Anne E. Booth, School of Oriental and African studies University of London; Ms. Pornpimol Rojjanapo; Mr. Weera Nijtrirat; Dr. Parichart Siwaraksa, Dr. Ampai Harakunarak, Dr. Wisarn Pupphavesa and Ms. Sunan- tha Natenuj Each sub-project was initiated and managed efficiently by the NESDB staffs in the various offices: Dr. Poramethi Vimolsiri, Ms. Suwannee Kammun, Mr. Araya Ma –In, Mr. Suparat Manmin, Ms. Amornrat Kantee, Mr. Chaiyong Mongkonkitngam, Mr. Teeparat Vacharangkul, Ms. Somsri Luangmaneerat, Mr. Pichai Likitvorakul, Ms. Thiwaporn Tunchalearn, Ms. Punnipa Kasetsiri and also Dr. Wichai Durongpun. In addition, other counterparts in Thailand also contributed in successfully managing the project: Ms. Jirawan Boonperm and Staffs at National Statistic Office; and also TDRI staff. The views expressed in the report reflect those of the authors and not necessarily of those consulted in the preparation of the report. executive summary 1. Launched in May 2002, the Country Development Partnership on Poverty Analysis and Monitoring (CDP-PAM) is a partnership program of capacity building and technical assistance between the Royal Thai Government and the World Bank. This monitoring report reviews overall performance of CPD-PAM in phase I, provides details of activities implemented, and lays down framework for phase II. 2. Poverty alleviation is a central policy priority of the Royal Thai Government (RTG). It is one of four pillars of the Ninth National Economic and Social Development Plan (2002- 2006). A Poverty Reduction Strategy based on the Ninth Plan lays out the framework to reach the poverty objectives. Aiming to eradicate poverty by the end of the decade, RTG has adopted a series of measures to stimulate economic growth in rural areas and improve the lives of the urban poor. 3. To support the implementation of the Poverty Reduction Strategy, the National Economic and Social Development Board (NESDB) and the World Bank has collaborated closely and established a partnership under the Country Development Partnership on Poverty Analysis and Monitoring (CDP-PAM). CDP-PAM provides an important venue through which the World Bank and other development partners can assist the Thai Government in alleviating poverty and reaching the goal of the Ninth Plan, through capacity building activities, policy reform and social movement activities. The most important indicator of successes is an achievement of reform milestones, as agreed at the beginning of each year. 4. Five activities were committed at the beginning of the year and served as tangible benchmarks for evaluating success of the phase I. Towards the end of Phase I, these five activities were successfully completed, signifying the successful implementation of the program. Apart from these committed activities, CDP-PAM also implemented 6 more activities, spanning across its four components, with a focus on developing technical and analytical tools that enable the government to target poor areas. All these eleven activities were financially supported by the ASEM Trust Fund, with contribution from the government and the Bank budget. 5. As CDP-PAM moves towards its second phase, the emphasis of the program will be on identifying and supporting public actions with a high poverty reduction impact. In Phase II, the activities will link tools developed in Phase I and apply them jointly to more effective policy implications. 6. NESDB, together with NSO, will continue to be the focal agency. However, the partnership may be expanded to other line ministries such as Ministry of Interior and Ministry of Agriculture and Cooperatives to ensure a more holistic approach in poverty alleviation. Collaboration with international development partners will also be strengthened. C ountry Development Partnership on Poverty Analysis and Monitoring (CDP-PAM) 1. Poverty alleviation is a central policy priority of the Royal Thai Government (RTG). It is one of four pillars of the Ninth National Economic and Social Development Plan (2002- 2006). A Poverty Reduction Strategy based on the Ninth Plan lays out the framework to reach the poverty objectives. Aiming to eradicate poverty by the end of the decade, RTG has adopted a series of measures to stimulate economic growth in rural areas and improve the lives of the urban poor. 2. In support of the poverty alleviation agenda, the National Economic and Social Development Board (NESDB), the National Statistical Office (NSO), the World Bank, and other donors have launched the Country Development Partnership on Poverty Analysis and Monitoring (CDP-PAM) in May 2002. This report will present and review the work undertaken to date. Building on lessons learned, it will lay out the directions of CDP-PAM for the future. I. Poverty in Thailand 3. Although poverty reemerges as a central issue after the crisis, it has now recovered 1 and fallen below the pre-crisis level. The decade up to the mid-1990s was a period of strong growth and poverty reduction in Thailand, just as in East Asia as a whole, with poverty falling from over 30 percent to less than 12 percent. The trajectory of high growth with declining poverty was interrupted during the Asian Crisis, but the economic recovery over the last few years has again led to increasing living standards. In 2002, poverty had dropped below the pre-crisis level. The latest survey for 2002 shows that Thailand’s incidence of poverty fell to 9.8 percent of the population last year, below the level of 11.4 percent in 1996 and the peak level of 14.2 percent in 2000. The absolute number of poor fell to 6.2 million in 2002, from 6.8 million in 1996 and 8.8 million in 2000. Other indicators of poverty also fell, including the poverty gap (average income shortfall of the poor compared to the poverty line), and the poverty severity (distribution-sensitive poverty indicator). Table 1 : Poverty Situation in Thailand 1996 1998 2000 2002 Real growth GDP Per capita 4.8 -11.4 3.6 4.8 Poverty (%) 11.4 13.0 14.2 9.8 Poor (‘000) 6831 7943 8874 6215 Inequality 0.515 0.511 0.525 0.511 Population Growth 1.1 0.9 1.0 0.5 Source : National Economic and Social Development Board 4. The unexpected speed of poverty alleviation is illustrated by two benchmarks. Poverty alleviation is one of the targets in the Millennium Development Goals (MDGs), adopted in September 2000 by Thailand and the other members states of the United Nations. The target is to halve the proportion of the population below the poverty line between 1990 to 2015. Taking the national poverty line as reference point, this implies a target of 13.7% for Thailand. This goal is now achieved - 13 years ahead of schedule. The Ninth Plan sets a second, more ambitions, target for the poverty reduction. It is to reduce the poverty headcount to 12% by 2006. Again, poverty has already dropped below this threshold, four years before the end of the plan period. 5. To sustain poverty reduction efforts over the coming years the Poverty Reduction Strategy is organized around five strategies. These strategies include macroeconomic stability; capacity building for the poor; social protection; natural resources management; and public sector restructuring. It emphasizes the importance of sustainable and balanced rural and urban development and focuses on the empowerment of community organizations and civil society; decentralization and devolution of decision making power and resources; developing border provinces to serve as economic gateways; and providing greater access to sources of information and knowledge for remote regions. 6. The public sector plays a crucial role in alleviating poverty through supporting a holistic approach and promoting community participation. This approach requires partnership 2 with stakeholders, including public sector, local governments, private sector, civil society, NGOs, and others. In particular, Thailand has embraced decentralization, aiming to increase the share of local government revenue is slated to increase from 20% in FY2001 to 35% in FY2006. Communities are encouraged to design coherent poverty reduction strategies, which reflect their own needs and preferences. 7. The NESDB, together with other line ministries and stakeholders, developed a poverty reduction plan for the implementation of the Poverty Reduction Strategy during FY 2003- 04. The plan sets a budgeting framework for poverty alleviation programs with a specific focus on the Northeast. The Ministry of Interior is the focal point in preparing the budgeting framework of poverty programs for FY 2004-05. 8. In 2003, RTG allocated about 13.4% of the total budget for the implementation of poverty reduction strategy. This represents an increase compared to 2000, where this share equally 10.4%. The largest amount was allocated to promote the opportunity for the poor. Poverty reduction programs are targeted to poor villages. In 2003, 16,735 villages or about 23% of all villages have been identified as poor. Among these, 40% are located in the Northeast, 34% in the North, 18% in the Central, and 7% in the South. All poor communities will develop integrated poverty-focused community plans by 2005 Table 2 : Government Expenditure on Poverty Reduction Programs (Unit : Million Baht) Strategies Actual Actual Actual Budget for Expenditure Expenditure Expenditure 2003 2000 2001 2002 Enhancing opportunity for 47,448.67 56,176.30 116,487.56 112,075.02 the poor Developing social protection 32,600.94 34,736.70 12,816.27 12,834.25 Managing natural resource 11,306.37 6,263.79 6,165.04 8,680.84 Strengthening macroeconomic These two strategies are measures that will be taken framework to support poverty by the government, so there is no specific plan and reduction no need of budget. Restructuring public sector Source : The Comptroller General’s Department and the Bureau of Budget Compile by The National Economic and Social Development Board 9. The public resources were used for a series of measures and programs. Key initiatives included the revolving village fund of Bt 1 million per village, distributed to about 70,000 villages over a three-year horizon for a total cost of up to Bt 77 billion (around 1.5 percent of 2001 GDP); the debt suspension program; the one tambon–one product scheme; the 30 Baht health scheme; the People’s Bank; the land capitalization; the agricultural center initiative; the Ua Arthorn housing project; and the tax scheme. About 99% of all villages 3 and urban communities have established a village fund and 98% of the funds have been distributed. Products from one-tambon-one-product schemes achieved sales volume in 2002 of more than Bt 23,000 million. The 30 Baht health scheme aims to provide the poor health insurance at a lower cost and allow the poor to get equal access to health system. More than 45 million (or 97%) of eligible people have been issued with health insurance card. By February 2003, about 90 percent of those who applied for loan from under the people’s bank scheme received approval, totaling for 10,814 million bath. Three state-run banks (Bank of Agriculture and Agricultural Cooperatives, Krung Thai Bank, and Government Saving Bank) will provide loans to farmers with land holdings as collaterals. Over 7,000 agricultural centers were established at the sub-district level with the objective to transmit knowledge and techniques on agriculture to farmers. About 12,000 inexpensive homes have been provided to the poor in the Ua Arthorn housing project, which provides the poor with less expensive houses. Almost 4 millions tax payer, about 70% to all tax payer in Thailand, have benefited from income tax reductions. 10. These are encouraging signs that the programs have the potential of making a real contribution to poverty alleviation. However, fully-fledged evaluations of these measures are important to understand their impact on poverty and to enhance their effectiveness. The next section will explain how CDP-PAM has started to contribute to improvements in monitoring, analysis, strategies, and evaluation in the area of poverty alleviation. II. CDP-PAM Framework 11. CDP-PAM comes at an opportune time to support Thailand at a key juncture in the development of its anti-poverty policies. To support the NESDB in implementing the Poverty Reduction Strategy, the NESDB and the World Bank has collaborated closely and established a partnership under the Country Development Partnership on Poverty Analysis and Monitoring (CDP-PAM). CDPs is a multi year rolling reform program financed through a combination of Government, World Bank, other development partners and trust fund resources. The key strength of the CDP instrument is its voluntary and mutual character. Hence, CDP-PAM provides an important venue through which the World Bank and other development partners can assist the Thai Government in alleviating poverty and reaching the goal of the Ninth Plan, through capacity building activities, policy reform and social movement activities. The most important indicator of successes is an achievement of reform milestones, as agreed at the beginning of each year. 12. CDP-PAM serves as a catalyst in the poverty reduction work. CDP-PAM functions by providing technical assistance and capacity building to alleviate poverty which is NESDB’s mandate. Given its limited budget available and limited scope of work CDP-PAM can touch upon, CDP-PAM is considered itself as a catalyst in the poverty reduction work. By bringing in expertise from consultants and putting together knowledge from relate agencies, some necessary activities have been initiated. Activities to be supported under CDP-PAM 4 should meet two selection criteria: a) Identified by the government as priority areas with a reform agenda in the poverty reduction area; and b) Complement the expertise and ongoing work programs of other development partners. However, it is important that this start up activities be carried on within the NESDB to ensure its continuity and impact towards the poor. This is achievable through the voluntary and mutual natures of CDP program. These natures of CDP allow for a reform packages under the program to reflect a more consensual process, with sides having learned from each other and may compromise some of their reform preferences. Such arrangement has a potential for sustainable results. 13. The structure of CDP-PAM evolved around four components and five committed activities have been committed as benchmark for Phase I. CDP-PAM supports the transformation process of poverty reduction through its four main components: (i) developing and improving disaggregated poverty, issue specific on poverty and standard of living data base; (ii) improving knowledge and technique of measuring and analyzing poverty, inequality and vulnerability to support poverty reduction strategy action plan; (iii) strengthening poverty reduction through program designs covering inter-related issues on poverty, inequality, and vulnerability; and (iv) achieving an effective monitoring and evaluation system for related pro-poor projects. Through these four components, five activities have been committed and served as tangible benchmarks for evaluating success of the first year. These are (i) development of a poverty map for Thailand to identify poor and non-poor villages; (ii) feasibility study for panel Socio-Economic Survey, the key data source of poverty; (iii) review of poverty line methodology; (iv) preparation for the development of community plan; and (v) preparation of Millennium Development Goals Report. 14. A Steering committee selects, approves and monitors activities implemented under CDP-PAM. In its first phase, CDP-PAM has carried out 11 activities, including its 5 committed activities. To ensure successful implementation of CDP-PAM and its consistency with the government’s overall poverty reduction framework, a CDP-PAM Steering Committee was established. The Steering Committee consists of representatives from all units and departments involved in CDP-PAM project and performs the following tasks: a) Review the objectives and work programs of the CDP-PAM’s components to ensure its consistency with the government’s overall programs on poverty related areas; b) Provide guidance and suggestion regarding the implementation of the CDP-PAM; c) Approve term of references and workshops for all activities under CDP-PAM as proposed 5 by Project Coordination Unit; NESDB also created a project coordination unit (PCU) to support the work of the project manager in implementing and overseeing the day-to-day progress on the project in various aspects. The PCU will consist of Project Director, Project Deputy Director, Project Manager, Project Coordinator and two assistants. 15. Partnership has been extended to other development partners and institutions. As part of its nature, CPD-PAM encourages partnership with all stakeholders to enhance the implementation of poverty alleviation program. It is structured to include as much as possible the skills and planned activities of development partners. While NESDB is the focal agency, partnership has been extended to the National Statistical Office (NSO) and the Thailand Development Research Institution (TDRI). The NSO is the main agency when it comes to the implementation of poverty map and panel SES. It is also a main data provider for poverty analysis in many activities. TDRI is a focal agency in developing poverty map and plays an important role in conducting in-depth analysis on poverty and its related issues under the poverty partnership program phase II. There also exists a strong collaboration with international partners in several activities. UNESCAP and UNDP played important roles in organizing expert group meeting on reviewing the methodology of poverty line. In addition, UNDP and various UN Agencies also participated in several MDGs workshop. III. Phase I Activities 16. Enhancing opportunities for the poor through the implementation of Poverty reduction strategy is a desired outcome of CDP-PAM. To achieve such result, four intermediate outcomes have been laid down. These are (i) targeting interventions to tackle spatial distribution of poverty and inequality that can reduce regional variation in living standards; (ii) enhancing the effectiveness of methodology/tool for poverty measurement that analyzes poverty, inequality and vulnerability; (iii) developing knowledge to understand linkages between poverty and other key dimensions and strengthening partnership with other development partners for a more holistic approach to tackle spatial distribution of poverty and inequality; and (iv) creating an institutional environment to monitor and ensure progress towards eradicating poverty in multidimensional aspects. These outcomes are reflected in four components of CDP-PAM. In its first phase, 11 activities have been implemented, including 5 committed activities. 17. Committed activities were finished and phase I assessment workshop was organized. By October 2003, all activities were accomplished. A workshop among CDP-PAM network was organized to review achievements and plan for moving forward. In the monitoring workshop, all related agencies shared their views about the success and failures of each activity which would be lessons learned for phase II. 6 18. CDP-PAM creates impact through knowledge sharing and collaboration. Through its nature, CDP-PAM has development impact in three ways. First, through technical assistance provided and workshops organized, CDP-PAM has provided an updated knowledge and techniques on poverty such as methodology for poverty map and panel SES. Second, by disseminating sound data, analysis, monitoring, and evaluation, CDP-PAM can raise the profile of the poverty issue in the policy debate in Thailand and contribute to raising the quality of policy discussions. For example, the development of a poverty map for Thailand will be a key input in promoting a greater focus on overcoming the long-term poverty in the Northeast. Third, through workshops and seminars, CDP-PAM enhances coordination across different agencies, including policy makers in poverty related areas to share know- ledge and experiences in alleviating poverty and also creates an enabling environment for them to work together in integrative way. For example, the process of MDGR preparation brought in not only line ministries, but also international organizations to review and select appropriated indicators for Thailand. Table 3 : Summary of CDP-PAM Phase I Activities Activities Objective Deliverables Budget A.Poverty Database Development 1. Poverty Map To achieve a more Income-, and Consumption US$ 143,037* disaggregated database poverty maps 2. Panel SES To improve information Recommendations on US$ 53,279.05 on poverty dynamics implementation of Panel through collective data SES and on possible on a panel of household feasibility study 3. Poverty Database To integrate and improve NRD2C Web-based with US$ 34,871.43 Development for accessibility of NRD2C user query M&E database 4. Factor analysis To analyze factors Development factors the US$6,976.19 influencing development reflect the true standard of village level of living of village B. Measurement and analysis of Poverty, Inequality, and Vulnerability 5. Review of Poverty To review official Revised methodology for US$2380.95 Line Methodology methodology of poverty poverty line with new food line calculation for a basket and base year better capturing of current standard of living 6. Income Distribution To conduct in-depth Study on income distribution US$ 19,319.05 in Thailand analysis on income with recommended policy 7 situation in Thailand monitoring 7. Gender and Poverty To study roles of women A study on women roles in US$ 14,595.24 in local government poverty reduction through organization in poverty Tambon Administrative reduction Organization C. Development of Poverty Reduction Strategies 8. Empirical Study on To identify constraints and Report on relevant issues on US$ 207,000** Poverty opportunities in alleviating poverty, poverty web site, poverty and poverty conference 9. Preparation for To provide a plat form for Participatory workshops to US$ 116,971.43 Community Plan community in preparing its prepare community in Development own community plan community plan development 10. Piloting One Stop To seek alternative forms Recommendations for US$ 29,904.76 services of social service providing community participation in through community delivering social services D. Poverty Monitoring and Evaluation 11.National Millennium To undertake official review A draft of MDGs report to be US$ 42,088.81 Development Goals of development situation in submitted to cabinet and Report Thailand and prepare the launched in the second phase first national MDGs report *This activity is financed by Regional ASEM TF for Poverty Mapping **This activity is financed by ASEM TF executed by the World Bank A. Poverty Database Development 19. To efficiently and effectively alleviate poverty, policy makers need to know the current situation of poverty and its determinant. This includes who the poor are, where they live, how they earn their living, and the types of assets they possess. This is applicable through various sources of data, including the household level database, qualitative information, and administrative data source. Available data should be disaggregated, complemented by qualitative information, and accessible by policy maker. Relevant information includes household level survey, qualitative assessments, as well as administrative data on service provision and usage, and revenues and actual fiscal expenditures at various level of government. 20. The existing poverty database has shortcomings. The most relevant data source for poverty analysis is the socio-economic survey (SES), a household level database conducted every two year by the NSO. It is also complemented by the village- and household-level database from the Ministry of Interior, the NRD2C and BMN. However, although the SES is a reliable data source, its aim is to provide poverty picture at the regional and provincial level. A more disaggregate database is needed to support targeted policies. The findings of the NRD2C and BMN are not fully consistent with result from the SES. Finally, most of the data users are academics, rather than policy makers. 8 21. The poverty database component aims to develop and improve the measurement of poverty, inequality and vulnerability. Activities under this component include (i) the development of a poverty map to obtain disaggregated poverty estimates; (ii) a feasibility study of Panel Socio-economic survey to improve information on poverty dynamics; (iii) the integration of village level database to facilitate monitoring and evaluation of the poverty reduction strategy implementation; and (iv) factor analysis to link the poverty database. i) Development of Poverty Map 22. A disaggregated poverty database is needed for targeted poverty reduction policies. Distribution of poverty in Thailand is highly spatial in its nature. Close to 70 percent of the population living in villages, where poverty (19 percent) is far in excess of the national average. Hence, over 9 out of 10 poor reside in rural areas. In addition, poverty has a sharp regional dimension. For example, the Northeast has a poverty headcount of twice of the national average. The provincial differences in poverty are even greater than the regional differences. Provincial poverty estimates for 2000 show that the 17 poorest (out of a total 76) provinces in Thailand accounted for two-thirds of all the poor. While the typical observations of the SES may be enough to calculate poverty estimates at the provincial level with a high degree of precision, a more precise and disaggregated data base is needed to capture the poor at the lower level. 23. Poverty map assists policy makers in targeting the poor at the lower disaggregated level. Under Phase I, income- and consumption-based poverty maps for the year 2000 were developed. Poverty mapping combines household survey and census data to estimate either income-or consumption-based welfare indicators for small geographic areas such as districts and sub-district. A poverty map can contribute a disaggregated level of information to help policy makers in addressing concerns about regional inequality and lagging regions in a decentralizing fiscal framework, leading to better geographical targeting. TDRI is the focal agency with support from NESDB and NSO. The results have been disseminated at the national workshop. 24. The poverty map, complemented with lists of the poor from NRD2C, can result in better geographic poverty targeting. A validation of the poverty map with NRD2C revealed inconsistencies. The numbers of poor villages are different. TDRI conducted field trips to explore the reasons of the inconsistencies. The result showed that both lists work well in some sub-district and village but not in others. The problem for NRD2C is likely to be linked to the dimensions of subjective poverty incorporated in the measurement and inaccuracies in reporting. The poverty map technique might not have captured certain information adequately. Improving the estimations can possibly overcome this problem. Further investigating the overlaps and inconsistencies with the view of reconciling the two sources will be clearly important. 9 25. Identifying a responsible agency to regularly update poverty maps will ensure its sustainability. Poverty map techniques require that those who conduct it have a sound knowledge of econometrics and statistics and a good understanding of surveys and the census. In addition, policy makers need to access and understand the result. Hence, identifying the appropriate organization will ensure that the map is compiled correctly and regularly and utilized jointly with other tools for a better targeting. ii) Feasibility study of Panel Socio Economic Survey 26. Panel data base can deepen the understanding of the causes of poverty. Currently, the SES provides repeated cross sectional data, so that for each new round a new sample of households is surveyed. This data can be used to study the changes in the levels and patterns of poverty over time at the aggregate level. However, the database itself does not allow for an analysis of individual movements in and out of poverty. In addition, the analyst cannot link changes in the welfare of the households to changes in other characteristics, such as the labor market. Key users of the SES, including the National Economic and Social Development Board (NESDB) and the Thailand Development Research Institute (TDRI) have proposed that the SES be collected as a panel. 27. A Panel survey will improve information on poverty dynamics. The NSO contracted the Institution for Social and Economic Research of Essex in the UK to explore the possibility of implementing panel component in the SES. Panel data follow the same individuals, households, or dwellings over more than one survey. It has two advantages over cross- sectional data. First, they track individuals or households over time. For example, they capture individual movements into or out of poverty (poverty dynamics), and therefore permit the analysis of the factors that underlie mobility. Second, they provide rich information on past events. This allows the analyst to link changes in the welfare of households to changes in other characteristics, such as labor market situation (for example, loss of employment status) or the provision of public services (treatment in health center). Overall, these advantages imply that panel data can shed light on the causes of poverty while cross-sectional data typically only reveals correlates of poverty. The institute suggested that panel data are collected over a 3-year period, following at least 8,000 individuals over time and the panel SES should be established as separate survey from existing SES. 28. Although panel is crucial in understanding poverty dynamic, it is also costly to follow the same individuals over time. Conducting a longitudinal household panel survey is complex, requiring a clear understanding of the implications for sample and survey design, questionnaire design, sample management, data processing, data management, and longitudinal analysis. In a panel survey, having high quality data for research implies systems that ensure high data quality. Given the requirements and complications, the cost of 10 conducting such survey are high. The Institute has proposed to test a pilot first. At the same time, the NSO will seek to identify sources of funds to support the implementation of the panel survey, should the pilot program be successful. iii) Poverty Database Development for Poverty Research Phase II 29. The NRD2C provides information on different dimensions of poverty than the SES. However, there are some limitations in data access. NRD2C is a village level database on different aspects of village condition such as economy, education, health and sanitary, and natural resources and environment. It is conducted every two years whereby the representatives from Tambon Administrative Organization interview village committee or village leaders. The main objective of NRD2C is to provide information for planning, developing, prioritizing and evaluating policies. Based on NRD2C, the villages are categorized into 3 different levels for policy prioritization. However, the cost associated with data access are significant. Further, there is limited capacity to handle these data in local institutions. 30. Making the database accessible to the public will enhance the quality of information. To facilitate the research and development for policy planning, the data set will be transferred and systemized in an academic institution, in addition to the Ministry of Interior. Not only can the data be systemized in a user-friendlier format, it also helps to reduce the data access constraint. Hence, under this activity, NESDB contracted Khon Kaen University (KKU) to improve access of NRD2C and manage poverty database. The NRD2C is installed at the local university with a user-friendly web base application. In addition, the university also worked closely with the Community Development Department (CDD) at the Ministry of Interior to develop a user manual explaining how the web application is designed and providing training to CDD staff to effectively transfer database into the system. iv) Factor Analysis 31. Villages under NRD2C are categorized into different categories for the purpose of targeting. NRD2C categorizes village into 3 different levels, using index calculated from existing indicators. However, the current index used is not reliable and accurate. In addition, different weights should be given to different indicators in the index as each indicator may have different impact towards the standard of living of the village. 32. A proper index system is needed for the village classification to reflect the real situation. As the classification of villages will affect the implementation priority of government poverty reduction program, it is necessary that the index reflect village reality. Current, indicators from NRD2C used to categorize village are given equal weight. Hence, the prioritization will not reflect different surroundings, environment or infrastructure that each village has. A local consultant was contracted to analyze and identify factors behind index categorization 11 that would reflect the village situation. To achieve this, development factors for each village were selected, taking into account regional differences. A score was assigned to each factor and the total factor score was calculated. Village with lower total score have lower development. Hence the new categorization would reflect regional and village differences more appropriately. Verification between the original three level classification with this factor analysis in 19 villages showed 70% consistency. B. Measurement and Analysis of Poverty, Inequality, and Vulnerability 33. To understand its pattern and sources, poverty needs to be appropriately measured and analyzed. Sound indicators to measure and analyze poverty should be developed and updated to capture adequately disparities among social groups, gender, and regions. The selection of such indictors will depend on the country’s starting position and what types of data are presently or in future available, taking into account the national monitoring capacity. The measurement and analysis of poverty, inequality, and vulnerability are crucial as not only it allow policy makers to understand factors undermining the situation, but also to design effective intervention, and to assess the effectiveness of policies. 34. The methodology of poverty measurement needs to be updated and expanded for a sound analysis of poverty, inequality, and vulnerability. Currently, poverty line, calculated based on SES, is the official measurement of poverty. It provides a base line in which those whose income below poverty line are considered to be poor. Although a times series of poverty line has been established, its methodology needs to be updated to reflect the current consumption pattern. As for the measurement of inequality, the Gini Coefficient is being used to measure the extent of inequality. Beyond this, the analysis on inequality remained limited. There is no official measurement and analysis for vulnerability. 35. Inequality remains a critical problem over the last decade. Although poverty situation is improving, inequality remained high over the past several decades, with the Gini coefficient fluctuating around 0.50. In 1988, the 20% poorest quintile received 4.6 % share of income. The number declined to 4.2% in 2002. At the same time, the 20% richest quintile received 56.% in 2002. About 60 % of population share less than 15% of national income. 36. Measurement of vulnerability can help to identify groups that are likely to become or stay poor. The Asian crisis revealed that large fractions of the population are vulnerable to poverty. High risk can force households to diversify their income sources, perhaps at the cost of lower returns. Hence, specific measurement and analysis for vulnerable group are crucial. 37. Monetary measures of poverty should be complemented by non-monetary measures. Poverty is associated not only with insufficient income or consumption but also with insufficient outcomes with respect to health, nutrition, and literacy, and with deficient social 12 relations, insecurity, low self-esteem and powerlessness. 38. In Phase I, CDP-PAM supported three activities by NESDB, the main user of poverty data: (i) review of official methodology for poverty measurement to ensure it adequately captures living conditions in Thailand aftermath of economic crisis; (ii) study on income distribution in Thailand to design a set of policies aiming to reduce inequality in Thailand; and (iii) study on gender and poverty to analyze gender disparity aiming to better design effective policies to reduce poverty. i) Review official methodology for poverty measurement 39. Poverty line is an official tool to help the policy maker to identify the poor. The poor in Thailand are those whose income is below poverty line, the official technique developed by the NESDB and adopted by the government in 1998. Poverty line is the income level that is sufficient for an individual to enjoy the minimum standard of living. Thus, those whose incomes fall below poverty line are considered to be poor. The NESDB has used the official poverty lines to monitor poverty situation in Thailand. The poverty profiles, a result from poverty line, is applied by several government agencies to evaluate their poverty reduction policies. 40. An updating of the poverty line is important. The official poverty line, considered as an absolute concept, was developed by Kwakani and Krongkaew in 1998. It is comparable across regions and areas. However, the required data for poverty line calculations, including the food baskets and the spatial price indices, are constructed using 1992 as the base year. Because of changes in Thai society and economy since 1992, the poverty measure may not reflect the current consumption patterns and the differences in current costs of living between regions. In addition, local administration areas have been recently changed from 3 areas (municipal, sanitary, and villages) to 2 areas (municipal and rural). This leads to changes in the Social-Economic Survey (SES), the main survey used in calculating poverty line. 41. A revision of official poverty line methodology was undertaken. Under this activity, CDP-PAM collaborated closely with NSO, UNDP and UNESCAP to conduct an expert discussion group to review and revise poverty line calculation methodology. Poverty experts from many agencies attended and provided valuable suggestions. Based on the result of workshop, Professor Kwakani proposed that the base year for calculating poverty line be changed from 1992 to 2002. However, as the data of SES 2002 was not readily available at the time, 2001 was used as a base line. The new calculation showed a similar trend of poverty but high poverty incidence. Further, the number of poor people in Bangkok increased from a headcount ratio of 0.47 (using 1992 as based line) to 5.1 (using 2001 as a base line). ii) Income Distribution in Thailand: Determinants and Impacts 13 42. Over decades, high inequality has remained a chronic problem. Currently, the extent of inequality is measured by the Gini coefficient and the share of the poor by income quintile. However, there is little further analysis. An in-depth research and analysis of inequality and social welfare is needed to review situation and determinants of inequality in Thailand. In addition, the analysis should assess the impact of government’s programs and policies and provide policy guidelines to reduce inequality. 43. CDP-PAM contracted a study on in-depth analysis of inequality and country comparison. CDP-PAM financed a study on income distribution in Thailand where the consultants, working together with NESDB staff, reviewed income inequality situation in Thailand and analyzed impact of deterministic factors from government’s programs. A dominant theme in the literature on Thai economic development shows that the rapid economic growth of the economy since the 1960s has been very centered on Bangkok, with economic growth being lower in the North, the Northeast, and the South, resulting in regional inequality. In addition, the study contrasted the situation in Taiwan where inequality has been declining. It argued that five interventions (budgetary, monetary, price, minimum wage, and trade and exchange rate policies) are key for inequality reduction. iii) The Study of women participation in Tambon Administrative Organization and Poverty Reduction 44. Poverty has a gender dimension. Although the gender gap in Thailand has narrowed, a better understanding of gender dimensions of poverty will affect how the policies are prioritized. Over the last three decades, gender gaps have narrowed, especially in health and education. Enrollment of women has increased at all levels, and more women than men are now enrolled in higher education. Female workers have fared better than males during the crisis, and female labor force participation is high. But in other areas, there are clear disparities that may trap women in poverty. More women than men are employed at less than the minimum wage; average wages are lower for women than for men; older female headed households show a significant probability to be poor, especially in the Northeast; women are a small minority of elected office holders; and poor women are still turning to prostitution. Empowering women by promoting them to participate in local government will allow them to express their needs and play a role in prioritizing policies. 45. Increasing the role of women in local government can strengthen communities. According to previous studies on people participation in Tambon, it appeared that there were only a few women involved. Only 2% of TAO members are female. As a result, NESDB has been interested in not only supporting the study on women participation in TAO but also collaborating in order to pave way for changing direction and policy. This will be an important 14 step to promote women’s role in development process at sub-district level. Research and field visits suggest that women would not necessarily have different priorities poverty reduction policies. However, having more women participating in the TAO could develop and support community’s strength. In addition, women’s awareness of honesty might improve transparency in TAO management. C. Development of Poverty Reduction Strategy 46. The priority public actions to raise sustainable growth and reduce poverty constitute the heart of poverty reduction strategy. They should be clearly stated and incorporated in a way that takes into account what is known of the linkages between difference policies, their appropriate sequencing, and the expected contribution of policy actions to the attainment of long term goals and intermediate indicators. 47. NESDB developed Poverty Reduction Strategy to support the poverty alleviation goal of the Ninth Plan. The strategies organized around five strategies with specific goals on each of them. It is aimed at enhancing the potential and quality of life for the poor both in rural and urban areas, developing and strengthening social safety net system, and promoting structural reforms in the economy. The five strategies include macroeconomic, capacity building for the poor, social protection, natural resource management, and public sector restructuring. 48. Government sets poverty alleviation as its first priority. Five major government policies emphasize community empowerment and economic development at the grassroots level.1 Currently, seven main ministries are involved in poverty alleviation programs. In 2002, 76,694 million baht from the total budget was allocated for poverty alleviation. The programs emphasize job creation, public welfare for the poor, and providing support to Tambon local administrative organization. In addition, 8,500 million bath was allocated in 2001 for the development of community plan. 49. The poverty alleviation framework should take into account key poverty issues in Thailand and promote coordination across agencies. With growth lower than in the pre- crisis period, the focus should be on making markets work for poor people and improving the targeting of government spending. The focus of poverty concerns is the Northeast of Thailand as two in three of all poor reside there. As the crisis revealed, private and informal safety nets were effective but not adequate to cushion the effects of the economic contraction, particularly on the poor. There also exists high unequal income distribution. Poverty among certain sub-groups and in certain areas appears to be chronic and resistant to the benefits of growth, posing a possible “structural� dimension to poverty. Although currently there are many poverty alleviation programs, there still lacks of effective coordination system. This results in inefficient resource usage and slower poverty alleviation. 50. The CDP-PAM component on poverty reduction strategies aims to strengthen poverty 15 program designs. Three activities were implemented. These are (i) empirical studies on poverty in Thailand to design effective policies for reducing poverty and raising the profile of poverty issue in the public debate; (ii) the implementation of community plans to strengthen and empower community in developing their own community plans and guidelines on improving welfare; and (iii) the development of one stop service in the communities to improve access to basic services and social welfare programs. i) Empirical studies on Poverty in Thailand 51. Empirical poverty studies identify major constraints and opportunities for further poverty reduction. Under this activity, the World Bank collaborated with Thailand Development Research Institute (TDRI) on in-depth analysis of poverty issues. The first phase of this partnership ended in December 2001 with the TDRI Year End conference in 2001. The main objective of the second phase is to increase the understanding of the effectiveness of poverty policies. Specifically, the study identified factors contributing to success and failures of policy implementation. TDRI conducted research in five areas, namely: (a) the old age income security and the poverty; (b) the implementation and im- 1 These five government programs include i) debt suspension for farmers; ii) establishment of people’s bank; iii) establishment of village fund scheme; iv) One Tambon One Product; and v) Universal health insurance. pacts of the 30 baht health care scheme on the poor in Thailand; (c) the risk-sharing, social safety nets and chronic poverty in Thailand; (d) the government reform and poverty in Thai- land; and (e) the social capital and the poor. The methodology included participatory meet- ings and brainstorming with the poor, seminars with other development partners. A poverty website was maintained and updated. The activity ended with a national conference on “ How to Eradicate the Poverty in Thailand in 6 Year?� The conference was attended by almost 300 participants. 52. Community participation is crucial in poverty alleviation. Initiation from and participation of local communities are crucial in poverty alleviation at the grass root level. Policies often fail when they are designed top-down and applied universally rather than to target groups. Communications between the poor and the service providers are sometimes deficient and often overlooked, resulting in mis-alignment of politics at the national and local levels. ii) Preparation of Community Plan Development 53. Bringing in the poor to participate in poverty reduction would strengthen process and make it more sustainable. Participation leads to a more inclusive and equitable processes for formulating, implementing, and monitoring poverty reduction strategies. Poverty reduction strategy process is more likely to be effective if the knowledge and experience of a range of stakeholders, including the poor and vulnerable groups, are tapped and their 16 perspectives systematically incorporated into the design and implementation of the strategy. 54. CDP-PAM supports community participatory process through the preparation of community plan. RTG plans to integrate several existing community plans which so far have been developed separately. The aim is for all communities to have their own community plans with a focus on poverty reduction. The government has allocated about 8,500 million bath of its budget to support this process over three-year process. CDP-PAM has worked with NESDB to support this development of community plan process during its preparation. Ten regional workshops were organized, bringing in various stakeholders to prepare guidelines and manuals to be used during the actual process of community plan development. Through these workshops, existing community plans were assessed and those with best practices are adopted. These workshops promote participatory process at all levels and strengthen cooperation across development partners in developing community plans at the targeted sub-district level, with an aim to reduce poverty. 55. The implementation of community plan involves several agencies. It is important to have proper monitoring system established. NESDB plans to summarize lessons learned during the preparation process which will be useful during the implementation. One of the lessons learned from this process is the importance of strong community leaders. iii) Piloting One Stop Service in Community 56. Informal safety net should be complemented by a formal system. Thai society placed a high value on close community and family ties, resulting in a strong informal safety net. The reliance of the informal safety net and support from the community and family were major forms of assistance during the crisis. The crisis also revealed that informal system was not sufficient. A formal system would help individuals and communities to better manage risks. In the past, components of a formal safety net have been fragmented and not well targeted. Further, there is no early warning system. RTG aims to develop a more balanced strategy which places adequate emphasis on public mechanisms to complement family and community based coping strategies. 57. One-stop-services are a formal system managed by the community. The Ninth Plan emphasizes the development of measures to improve the efficiency of social safety net program so that the poor and the disadvantaged are protected and become self-reliant in the long run. NESDB, in collaboration with CDP-PAM, developed a pilot program for one- stop-services at five pilot communities. This study investigates the capacity of communities to deliver its own social safety net. The findings will be integrated into the development of the administrative models suitable for different areas. Five pilot provinces were selected and participatory workshops were organized. 17 58. Strong community leader are crucial for sustainability of the program. The study found that common problems facing rural communities were income generation, employment, welfare, debt, natural peril and environment. It also showed that in fact communities have their own capital, such as natural resources, local wisdom, tradition and culture. The participatory session assisted communities to realize their strength and come up with measures to utilize those social capitals to support the vulnerable within the communities. Strong leadership is important for utilizing a holistic approach that brings in collaboration from all stakeholders. D. POVERTY MONITORING AND EVALUATION SYSTEM 59. Effective outcome monitoring will enable the assessment of progress made toward poverty reduction goals. A poverty monitoring system is needed to track key indicators over time and space and see whether they change as a result of poverty reduction strategy while the impact evaluation of selected projects and programs help to determine the extent of which improvements in outcome are due to specific public actions. Monitoring and evaluation systems are necessary in order to assess whether a poverty reduction strategy is effective in reducing poverty. Systematic monitoring and evaluating of progress, which would allow experience to be gained on the relationship between actions and outcomes, is a crucial element of successful implementation. 60. Proper monitoring and evaluation system needs to be established. NESDB regularly monitors and evaluates RTG’s poverty reduction programs. However, there is no systematic approach and no official system. The linkage with decision maker is crucial to influence the design and implementation of poverty reduction policies. 61. Dissemination of evaluation is also necessary. Dissemination of results is critical for usage. Results that are not widely disseminated, through mechanisms tailored to different groups in civil society, will not be used, and the resources that were spent in getting such results will be wasted. Non-governmental actors – be they research institutions, civil society organizations, special-interest and advocacy groups, or others – have an important role to play in the design of the monitoring and evaluation system, in actually carrying out monitoring and evaluation activities, and in using the results. 62. The component on poverty monitoring and evaluation under CDP-PAM aims assists NESDB and NSO in building up an effective monitoring and evaluation system. The main activity under this component is the preparation of MDG-Report (MDG-R). 63. As part of agreement made during the millennium declaration, Thailand committed to preparing MDG-Rs that update every five years the status of 48 MDG indicators on poverty, education, health, gender, environment, and international collaboration. The process of preparing the first MDG-R involves many stakeholders participating in workshops organizing 18 around the eight goals. Participants agreed on targets and indicators, which are localized to suite current policies and existing indicators. These indicators are to be monitored over time, resulting in the establishment of proper monitoring system. 64. MDG-Plus and Provincial MDGs, the first sub-national MDGs, have been introduced. Given that Thailand has met most of targets and indicators, the concept of MDG-Plus has been introduced. Under MDG-Plus, more ambitious localized indicators with expanded coverage and quality will be monitored. For example, the 3rd MDG is to ensure that by 2015, there will be universal primary education for both boys and girls. Thailand has already achieved this target. The MDG-Plus expanded the target to the achievement of secondary education. MDG-Plus indicators were selected through the consensus of workshop participants. Currently, 23 MDGs Plus indicators have been identified. In addition, although nationally many targets have been achieved, there are disparities at the provincial level. Mae Hong Son, one of the poorest northern provinces, was selected as a pilot province to prepare a Provincial MDG-R. This project is supported by NESDB, together with its Northern office, UNDP and the World Bank. IV. Phase II and Going Forward 65. In Phase II, CDP-PAM will build on knowledge and network created in the initial phase to support improved poverty reduction policies. The emphasis will be on identify- ing and supporting public actions with a high poverty reduction impact. In Phase I, CDP- PAM activities focused on developing technical and analytical tools that enable the govern- ment to target poor areas such as poverty map and poverty database. In Phase II, the activi- ties should link these tools and apply them jointly to more effective policy implications. CDP-PAM will connect activities of Phase II in three regards. First, newly generated infor- mation will be matched with existing databases to reassess poverty in relation to its spatial dimension. Secondly, the improved understanding of the pattern and dynamic of poverty will be used as input into strategies and policies for poverty alleviation. Thirdly, the con- solidated poverty database will be applied to evaluate the incidence of the government’s resource allocation. Finally, the created tools and mechanism will enable sharing knowl- edge and experiences in alleviating poverty. 66. The Phase II partnership will be extended to other agencies. NESDB, together with NSO, will continue to be the focal agency. However, the partnership may be expanded to other line ministries such as Ministry of Interior and Ministry of Agriculture and Cooperatives to ensure a more holistic approach in poverty alleviation. Collaboration with international development partners will be strengthened. 19 67. Moving to Phase II, CDP-PAM aims to sharpen the government’s focus on poverty alleviation inline with ongoing reforms, through a better database and a better understanding of poverty. This implies both continuity and linkages of project components. The project will keep the broad focus on poverty and related issues by pursuing work in the four areas of Phase I. Depending on progress made during Phase I, some activities may continue into Phase II (SES panel, income distribution, and one-stop services). 68. For the poverty database component, the integration of the existing poverty database will be crucial. Phase II will support activities that integrate the existing poverty databases, ensure consistency with the revised poverty line definition, develop a corresponding spatial fiscal database, and improve the incorporation of dynamic aspects of poverty. The activities will ensure that relevant government agencies build adequate capacity to update the poverty database in the future, as new data becomes available. The decentralization process implies demand by local decision makers for reliable and disaggregated information on living standards and the distribution of wealth. An understanding of poverty and inequality levels at detailed spatial scale is a prerequisite for geographic targeting of interventions aimed at improving welfare levels. There will be a continuation of several activities. The poverty mapping work will validate results with NRD2C and possibly updated the findings with the latest data. Cheaper software packages for poverty map will be explored. A responsible agency will be identified, and staff adequately trained. Concerning the SES Panel, NSO agreed to conduct a pilot panel. At the same time, preparation work for an implementation of panel as an official survey will go forward. The database development will also strengthen the participation of users, including local communities, research centers and universities. 69. The component of analysis and measurement of poverty will focus on capacity build- ing on up-to-date analytical tools and studies on identified knowledge gap. Improving knowledge of techniques to measure and analyze poverty, inequality, and vulnerability will support the government’s efforts to monitor changes in the living standards of the poor. Poverty reduction policies often go through both macro economic and structural instruments aimed at enhancing economic activity and growth. The actual changes in living standards generated by these interventions is complicated by the fundamental difficulty of establishing satisfactory linkages between micro and macro analysis. There are various tools presently available to evaluate the impact of economic polices in general on poverty reduction, or on the distribution of living standards. In particular, there methods can address issues around the common thread of “incidence analysis,� related to indirect taxation and ex-post point of view. NESDB is responsible for providing assessments of the impact of policy changes on poverty and inequality, yet it lacks the tools to conduct such analyses. The activity in the second phase includes modeling of impact of fiscal policy on income distribution. Further, poverty has been persistently high in the Northeast compared to other regions in the country. While one in three Thai live in the Northeast, two in three poor reside there. The World Bank will collaborate with the Northeast office of NESDB and other partners to develop a 20 pilot framework for specific strategies and measures to promote economic development in the Northeast. 70. The ultimate objective of measuring and analyzing poverty is to design more effective strategies. Over the last few years, Thailand has embraced a decentralization process, aiming to increase the share of local government revenue is slated to increase from 20% in FY2001 to 35% in FY2006. However, many issues remain to be resolved. The devolution of revenues, functions, and personnel has not been done in an integrated manner. Communities do not have coherent poverty reduction strategies, which reflect their own needs and preferences. Local government capacity is extremely limited, and few personnel have been transferred to the local level. There are approximately 8,000 tambons, many of which are too small to take on broader responsibilities. The challenge is to strengthen capacities at the local level to ensure a better access of the poor to basic social services. Further, it will be important to build on the lessons learnt during this phase in the preparation of NESDB’s next development plan. Building on Phase I, future activities of the strategy component include supporting the implementation of Tambon level community plans and pilot studies on better social service delivery. 71. Monitoring progress of poverty reduction in Thailand requires institutionalizing a sys- tem of data collection, analysis and reporting on a set of well-defined indicators. Moni- toring and evaluation systems enable the government to assess whether a poverty reduction strategy is effective in reducing poverty. Monitoring concerns the issue of measuring the progress towards poverty reduction goals. Given the multi-dimensional nature of poverty and the commitment to the Millennium Development Goals, this requires monitoring both consumption-based poverty and other dimensions of well-being, like access to basic ser- vices (such as education, health, safe drinking water). Disaggregated information by region and household characteristics is essential for understanding how overall trends are related to the welfare of specific groups. Apart from monitoring, the evaluation of specific policies and programs determines is essential to assess the extent to which improvements in out- comes are due to those public actions. The dissemination of monitoring and evaluation are critical. Findings that are not widely disseminated, through various mechanisms tailored to different groups in government and civil society, will not be used, and the resources that were spent in getting such results will be wasted. Proposed activities for Phase II include provincial level MDGs Report, a Village Fund impact evaluation, and knowledge dissemi- nation. 21 22 Annex I: Policy Matrix Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) I. Poverty Database A comprehensive and up-to-date database on poverty, inequality and vulnerability is an essential input into developing and monitoring poverty reduction strategies Objective: To develop and improve disaggregated poverty, issue-specific on poverty and standard of living data, spanning both non-participatory and participatory 1. Comprehensive Poverty Database a) Poverty Mapping (Achieving - Full implementation of poverty - Updated poverty map based on - Capacity Building for internal - Based on international practice, NESDB and NSO work a more disaggregated poverty mapping, both income and recent village level income and staff of NESDB/NSO in poverty jointly with TDRI to develop better spatially disaggregated related data) consumption based, for the consumption data set. map production and updating poverty information through the poverty mapping project. [ NESDB; NSO; TDRI; WB] whole kingdom - Updated poverty map based on technique. - Review and assess Socio-economic Survey and Census - Workshop to disseminate results the result of review poverty line - Updated poverty map based on and identify common variables. within the NESDB/NSO and workshop and SES panel. SES 2004. - Review, assess and integrate three main data sources academia. - Identification of target villages (SES, CENSUS and VS1) and determine the specification - Capacity Building program for based on the comparison of the statistical model. NESDB/NSO staff on poverty between the result of poverty - Develop estimation of stratum-level regression models mapping techniques map and village level data base and carry out relevant diagnostic tests. - Field trips to pilot provinces to NRD2C. - Simulate estimations of poverty and inequality measures validate result of poverty map - Workshop to disseminate results and standard errors. - Workshop to present results to of updated poverty map. - Validate poverty estimate, using village level data sets. central government, line - Guidelines to depict changes in - Validate the findings of poverty mapping through field ministries, civil society and spatial distribution of poverty trips in pilot provinces to see how well the statistical local government officers and inequality, based on results analysis matches with casual observations. . of updated poverty map. - Integrate the use of advanced GIS method in cooperation - Capacity Building for internal with related ministries such as Ministry of ICT, to improve staffs of NESDB/NSO in dissemination of poverty map. poverty map production and - Update poverty map annually, using village data set. updating technique. - Based on the results from reviewing poverty line and SES panel feasibility study, update poverty map. - Identify targeted villages based on the comparison between poverty map to findings from NRD2C and BMN - Use results from poverty map to further analyze the regional and provincial inequality for better geographical targeting policies. - Utilize results from poverty map in policy reform areas such as in the decentralizing fiscal framework. Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) b) Panel Data for SES - Workshop to disseminate the - Feasibility study on SES panel - Implementation of the Panel - Study and analyze the feasibility of converting SES into (Improving information on result of the possible integration component. component into SES full scale panel, based on international good practice. poverty dynamics through of SES panel. - Workshop on SES panel - Produce feasibility study on SES panel component, collective data on a panel of - Proposal on feasibility study for component. including costing, taking into account recent proposals to household) concerting SES into panel - Publication of SES manual for conduct çlighté annual SES survey. [NSO; NESDB, WB] household survey panel component. - Develop and implement pilot projects on SES panel - Workshop on SES panel - Capacity Building program for component and light survey instrument. component. NSO staff. - Develop a proposal for capacity building to prepare NSO staff for the new SES survey. c) Poverty Database - A website containing BMN and - A website containing a time - Tambon Level database data - Systematically review the standard of living data i.e. BMN Development for poverty NRD2C 2001 ready to be down- series of BMN and NRD2C. entry and application with and NRD2C research and monitoring and loaded. - Updated version of database linkages to data collecting - Prepare, transfer, systemize and manage poverty data from Evaluation System: Phase I & - Training workshop for related - Pilot projects for Tam bon level center institutions Ministry of Interior to selected academic institution and II (Managing, Improving and officials; NESDB, NSO; and database. NESDB for further poverty research, planning and future Integrating poverty database at their regional staffs, MOI and monitoring and evaluation of poverty reduction policy. the village level to facilitate Tambon Administration Office - Integrate two database from MOI for better data monitoring and evaluation the Staffs consistency and data manipulation through data PRS implementation) - Publication of user manual and verification [NESDB; MOI; KKU, NSO] CD-Rom to be disseminated - Identify potential research areas for monitoring and - Linking to NESDB’s Provincial evaluation of poverty reduction policy in Thailand. poverty profile project - Update database based on data from MOI and restructure - A survey manual and a survey database to reduce inconsistency across village level data form used for improving - Create web application in maintaining database using NRD2C data collection Tambon internet’s infrastructure. - Link the database to the provincial poverty profile initially conducted in two pilot CEO provinces located in the Northern part of Thailand d) Poverty Database: Toward - Study on compatibility and - Comparative study based on - Improve survey method and adjust questions for NRD2C compatibility of poverty map consistency of poverty database various years of NRD2C - Systematically review and compare results derived from and PRS action plan database - Factor Analysis result for through a factor analysis poverty mapping exercise and NESDB’s poverty reduction (Achieving a bridging link of NRD2C 2001 approach strategic approach using BMN and NRD2C in identifying poverty database aiming to - Workshop to disseminate the poor group at Tambon level. support poverty reduction findings - Analyze NRD2C database through a Factor Analysis strategic action plan) approach [NESDB] - Analyze data and propose a policy to support PRS action plan 23 24 Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) e) Regional Cooperation on - Establishment of Poverty - Establishment of Poverty Center - Consolidate poverty database not only within the NESDB Poverty Reduction Library /Library at the NESDB but also with line agencies such as the Ministry of Interior. [NESDB, WBI] - Consolidation of poverty - Workshops and trainings on - Review and compile poverty related studies, including database poverty related issues. works done under CDP-PAM and by others. - Workshops and training on - Coordinate with line agencies to share with neighboring poverty related issues. countries the learning experiences on poverty map and - Establish Global Distance poverty reduction strategy. Learning Network - Coordinate with World Bank Institute to bring in experts and initiate learning session with neighboring countries. II. Measurement and Analysis As the national planning institution, NESDB is the main user of poverty data. It is responsible for measuring trends in living standards and analyzing the of Poverty, Inequality and pattern and causes of poverty, inequality and vulnerability Vulnerability Objective: To improve the knowledge and techniques of measuring and analyzing poverty, inequality, and vulnerability to support poverty reduction strategy action plan 1. Development of Poverty, Inequality and Vulnerability Measurement Techniques a) Review of Official Poverty - Expert Group Meeting on - Adjusted poverty line based on - A series of adjusted poverty - Review official methodology for poverty measurement to Line (revising official “Review of Thailand’s Official the proposals submitted to the lines ensure it adequately captures living conditions in Thailand methodology for poverty poverty line.� NESDB. after the crisis through a brainstorming discussion. measurement to ensure it - A proposal on the revised - A new set of a series of the - Based on the result of the workshop, update the technique adequately captures living technique for calculating adjusted poverty line use to measure poverty. conditions in Thailand aftermath poverty line, based on the result - Training workshop for NESDB - Improve knowledge and capacity for NESDB staffs in of economic crisis) of the meeting. and NSO staff on the revised accordance to the adjusted poverty line calculation [NESDB, UNESCAP, UNDP] methodology for poverty line technique. calculation - Based on the reviewed technique, updated the time series of poverty line b) Income Distribution in - Study on aspects and technique - Extending the selected - Review income inequality in Thailand by comparatively Thailand: Cause and Impact in analyzing income technique to analyze examining all income inequalities models and their results; (Designing a set of policies distribution, emphasizing on governmental policies impacts - Determine the source of inequality in Thailand; aiming to reduce inequality determinants and impacts of on income distribution in - Establish framework within NESDB for analyzing in Thailand) policy. Thailand, with a focus on the inequality in Thailand; [NESDB] - National Seminars on technique connection between macro- - Conduct analysis and evaluate government programs on in analyzing inequality in impacts and micro-foundation income distribution and welfare improvement; Thailand. response. - Based on international best practice, develop methods for - A report of income inequality - Training workshop for NESDB calculating and writing programs for data processing from and quantitative choices for on inequality and social welfare SES. analysis of policy impacts analysis Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) - Capacity building workshop for - Extend the analytical technique to capture a connecting the NESDB staff on analyzing channel between micro-level and macro-impacts, with a inequality and assessing social close cooperation with other line ministries, such as welfare impacts on income Ministry of Finance on analysis of tax policy on income distribution. distribution. - A manual of inequality analysis - Develop a set of policy recommendations aiming to reduce technique. income gap while promoting social welfare in Thailand - Publication of a series of technical notes on inequality methodologies. 2. Development of Poverty, Inequality and Vulnerability Analysis a) Gender and Poverty - Workshop on “Gender, Poverty - Implementation of action plan - Proposals to NSO to integrate - Conduct in-depth study on the relationship between gender (analyzing the gender disparity and Development Policy in that promote gender equality urban poverty aspects into disparities and poverty severity aiming to better design effective Thailand� Socio-economic survey (SES) - Analyze women’s role in the local government and policies to reduce poverty) - Policy paper focusing on roles of administrative organization and their role in reducing [NESDB] women’s in local administrative poverty. level (Tambon Administrative - Develop proposals for gender related poverty reduction Organization) to reduce poverty policy - Translate gender dimension of poverty into the selection and design of priority public actions. b) Urban Poverty (conducting - Workshop on concepts and - Analyze and review the determinants of urban poverty to urban poverty profile to better determinants of urban poverty. construct urban poverty profile. understand of deprivations and - Identification of monitorable - Identify indicators to be collected for producing and constraints in the urban settings) indicators for urban poverty monitoring urban poverty. [NESDB] - Policy Proposal focusing on - Revise SES to have aspects of Urban settings. reducing urban poverty based on constructed indicators. c) Public Expenditure and - Study on the pattern of - Assess government spending in terms of equity and Poverty (assessing the pattern of government’s resource spending allocative efficiency; the government’s resource on poverty reduction - Evaluate the incidence of government spending in targeted allocation and its link to poverty - Identification of poverty areas based on NRD2C and results from poverty map; reduction strategy) indicators and targets to be - Analyze the cost-effectiveness of government’s spending incorporated in public services on poverty reduction programs agreements. - Identify poverty indicators to be incorporated in the pubic - Training workshop for NESDB services agreements; staff on analyzing government - Determine the role of local administration in public spending. expenditure through decentralization process; 25 26 Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) - Identify good practices in budgeting and public financial management that would allow an effective implementation of pro-poor policies; - Coordinate with other line agencies, such as Ministry of Finance and Bank of Thailand to promote effective pattern of public expenditure. II. Proverty Reduction An effective Poverty Reduction Strategy should reflect a comprehensive understanding of poverty and its determinants. In addition, it should assist in Strategy choosing public actions that have the highest poverty impact, which are fully costed and prioritized consistent with institutional and fiscal constraints. Objective: To strengthen poverty reduction strategy through program designs covering inter-related issues on poverty, inequality and vulnerability with a main focus on realistic practical and reliable actions. 1. Proverty Reduction Framework a) Poverty in Thailand: - Workshop on “Thailand’s - Updating poverty website - Updating poverty website. - Review design, coverage, and effectiveness of policies, Concepts and empirical Poverty Reduction Strategy: A - Implementation of policy - Implementation of the pro-poor programs, regulations and institutions with regard to three- Studies (Designing effective three-pronged approach to proposal. programs. pronged approach. policies for reducing poverty addressing the three dimensions - Workshop to review policy - Review and analyze provincial level variables , including and raising the profile of poverty of poverty.� proposals of poverty mapping infrastructure, public services and fiscal policy that can be issues in the public debate) - Workshop on “Multivariate project. used in the multivariate analysis. [NESDB, TDRI] analysis of the causes and - Policy proposals on - Based on the Socio-economic Survey and possible pattern of poverty.� geographical targeting provincial variables, develop a policy oriented multivariate - Workshops to share the result of submitted to PDPC analysis of the pattern and causes of poverty . participatory meetings and to - Analyze the nature, the success, and the failure of poverty clarify the operational strength reduction implementation and weakness of poverty - Review of theoretical literature concerning chronic reduction. poverty. - Regional workshop on “Credit - Develop methodology to decompose the transient and and Debt Policies of the Pooré chronic components of poverty measures. - Regional workshop on çRural - Study on international good practice in making poverty land and collateral policy.� map relevant for policy and program design. - Regional workshop on - Develop criteria and analytical tools in prioritizing targeted “Implementation of Universal programs. Health.� - Using poverty map results, develop and propose programs - The implementation of Poverty that are more targeted towards the poor. website Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) - Television programs on poverty - Publication of the research on Development and Poverty; Chronic Poverty, Public Sector Reform and Poverty in Thailand, Social Protection Mechanism; and Governance and Poverty 2. Supporting Poverty Reduction Strategic Action a) Supporting Community - Selecting targeted areas/groups - Implementation of and - Review and link all poverty reduction plan projects at Plan and Welfare Development for action monitoring PRS action plans different management levels to sharpen PRS action plan. (Strengthening and empowering - Reviewing governmental - Workshops to promote the - Integrate the projects to achieve a most effective plan to community in developing projects and plans ranging from implementation of community attack poverty in Thailand community plan and guideline on local to municipal level plan - Develop discussion on PRS among experts and related improving welfare, aiming to - Workshops to stimulate - Implementation of action plans parties, and report results to the Cabinet reduce poverty) [NESDB} discussion on community plan in targeted areas in each region. - Based on village level data i.e. Poverty line, BMN and and effective community - Implementation of community NRD2C, identify both income and non-income criteria to welfare welfare in pilot areas. be used in determining targeted areas in four regions- - Workshops for trainers on - Using the prepared manual in northern, southern, central and northeast, with a close community plans and welfare the Implementation of the collaboration with MOI. development government’s Integrated - Conduct a field trip in four regions. - Publication of training manual. Community Development Plan - Work closely with selected community in developing their - Action plans developed by local Project own community action plans that are in line with Poverty management of the targeted Reduction Strategy (PRS). areas. - Develop action plans with a clearly defined - Framework for each community implementation framework and role of each sector in to develop better community reducing poverty in targeted areas. welfare. - Provide training to leader in the targeted community to - Workshops on “Preparation for serve as focal point in each region to assist other Integrated Community communities in developing further action plans. Development Plan among - Organize workshops to assure the main objectives of the development partners� project, among related development partners, from the - Publication of operational policy level to field operation. The output of the project manual used for preparing will be used to support the “Integrated Community community development plan Development Plan to Strengthen Community and Alleviate 27 28 Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) Poverty,� which will be supported by the government’s regular budget. - Review best practices of those on-going and complete Community Development Plans, through a brainstorming process, with an aim to prepare an operational manual addressing objectives, approaches and process to achieve effective community development plan. - Review the management mechanism of social safety nets b) Social Protection (Improving - Workshop on practical - NESDB submits best practices provided by both public and private sector and propose access to basic services and management of social safety to PDPC. measures for management reforms social welfare programs) nets mechanism. - Workshop on the - Develop the mechanism of social safety nets for the poor (NESDB) - Pilot Projects on the implementation of one stop and the vulnerability through coordination with relevant establishment of the one stop services for social safety nets agencies both public and private sector as well as service. programs. community organization - Implementation of policy - Develop proposal for the management of one stop service proposal. that would provide the poor with better access of social safety nets programs. II. Proverty Monitoring and A poverty monitoring system is needed to track key indicators over time and space and see whether they change as a result of Poverty Reduction Strategy Evaluation System while the impact evaluation of selected projects and programs help to determine the extent of which improvements in outcome are due to specific public actions. Objective: To achieve an effective monitoring and evaluation system for all pro-poor projects within NESDB and other partners 1. Improvement of Monitoring and Evaluation System a) Introductory workshops on - MDGs Workshops with line - Pilot Projects on MDGs at the - International regional - Conduct stocktaking exercise with line ministries to the relevance and Application ministries provincial level Workshops on MDGs identify existing data and indicators to reach a preliminary of the Millennium - Publication of technical manual - Database for MDGs Plus assessment of current status of MDGs in Thailand Development Goal (MDG) in for MDGs indicators Indicators for Thailand - Undertake an initial review of the official MDG in linking Thailand (with UNDP) - Publication of MDGs Report - Domestic regional Workshops to the 9th National plan and discuss on process and on (undertaking official review for Thailand on MDGs MDGs’ roles in development of Thailand of development situation in - Draft of Cabinet Paper on - Prepare target areas and indicators to be used for connecting with poverty and MDGs monitoring development level according to MDGs. standard of living in Thailand) - Establishment of Network of - Select indicators for MDGs plus to monitor and evaluation [UNDP, NESDB] practitioners by NESDB the development situation at the medium term - Based on the indicators from BMN and NRD2C, identify appropriate indicators to be monitored and evaluated for MDGs plus; Objectives/Outputs Benchmark Capacity Building and Policy Reform Year 1 (02-03) Year 2 (03-04) Year 3 (04-05) b) Monitoring and Evaluation - Research on a framework for - A manual of monitoring System for PRS (Designing a monitoring and evaluating poverty reduction program and system to monitor and evaluate community plan development evaluating outcomes of effectiveness of community in reducing poverty promoting community plan plan development approach to - Workshop to build capacity development approach reduce poverty) of NESDB, NSO and Development partners staffs on monitoring and evaluating community base development projects c) Government Policy and - Designed a framework to - Implementing the framework Poverty Reduction Strategy: monitor and evaluate PRS in all areas and draw a set of Monitoring Projects and - Workshop to disseminate the policy recommendations from Evaluating Impacts framework the findings. (Monitoring and evaluating - A manual for monitoring and government policies on Poverty evaluating government policy. Reduction Strategy (PRS)) 29 Annex II: CDP-PAM Results Summary Poverty Mapping I.Part I: 1. Activity Poverty Mapping 2. Responsible Agency TDRI 3. Project Manager Dr. Somchai Jitsuchon Part II: 1. Budget US$ 170,414 2. Disbursement Amount US$ 143,037 3. Starting Date April 17, 2002 4. Ending Date October 30, 2003 5. Period 18 months Part III: 1. Objective To develop the poverty maps, both income and consumption based, and companying tools and documentation, for pilot provinces and then the whole kingdom by applying the methodology as outlined in Elbers (2001) taking into account Thailand circumstances. In addition, training will be provided to NSO and NESDB staff on the methodology and the procedure of generating, updating, and interpreting and 30 presenting the results, of a poverty map. 2. Project results The results of the poverty mapping show that the map matches well with the SES at national level and regional level while less so at province level. However, there are disagreements between the map and the NRD2C. Thus a cross-validation of these data such as fields visit and existing welfare indicator comparison is needed. A poverty map can contribute to a wealth of information to help policy makers in addressing concerns about regional inequality and lagging regions in a decentralizing fiscal framework, leading to better geographical targeting. Panel Data for Socio-economic Survey Part I: 1. Activity Panel Data for Socio-economic Survey (SES) 2. Responsible Agency NSO, WB 3. Project Manager Ms. Jirawan Boonperm (Consultant: Prof. Dr. Medhi Krongkaew, Dr. Heather Laurie) Part II: 1. Budget US$ 53,160 2. Disbursement Amount US$ 48,380.57 3. Starting Date June 1, 2002 4. Ending Date October 31, 2003 5. Period 5 months Part III: 1. Objective To conduct a feasibility study reviewing the options to transform the SES from a cross-sectional to a panel survey. This assessment will draw on experiences from other countries with panel data sets, and take into account how such a revision would affect other recommendations for SES development. 31 2. Project results The result show that compared to cross-sectional data, panel data, which follow the same individuals, households over more than one survey, can reflect changes in the level and patterns of poverty over time at the aggregate level more effectively especially in aspect of poverty dynamic. In a panel survey, having high quality data for research implies systems that ensure high data quality. Given the requirements and complications, the cost of conducting survey are high and also, there is a need for technical support. NSO will seek to identify sources of funds to support the implementation of the panel survey. Poverty Database Development for Poverty Research Phrase II III.Part I: 1. Activity Poverty Database Development for Poverty Research Phrase II 2. Responsible Agency NESDB, MOI, KKU, NSO 3. Project Manager Mr. Suparat manmin (Consultant: Mr. Boonsong Watanakit) Part II: 1. Budget US$ 34,871.43 2. Disbursement Amount US$ 32,183.27 3. Starting Date December 2, 2002 4. Ending Date October 31, 2003 5. Period 11 months Part III: 1. Objective To manage, improve and integrate poverty database at the village level to facilitate monitoring and evaluation of the implementation of the poverty reduction strategy To improve quality of the NRD2C database through a better data collection plan 2. Project results The NRD2C is installed at Khon Khaen University with a user-friendly web base application. The University worked closely with the Community Development 32 Department (CDD), of the Ministry of Interior, to develop a user manual explaining how the web application is designed. Moreover, the responsible agencies organized a series of training on the NRD2C questionnaire in order to enable mainly CDD officers to better understand the NRD2C questionnaire and gain technique in data collection. Factor Analysis IV.Part I: 1. Activity Factor Analysis 2. Responsible Agency NESDB 3. Project Manager Mr. Chaiyong Mongkonkidngam Part II: 1. Budget US$ 7,060.24 2. Disbursement Amount US$ 34,871.43 3. Starting Date December 2, 2002 4. Ending Date October 31, 2003 5. Period 11 months Part III: 1. Objective To study and analyze factors that influence development , based on a village survey NRD2C to prioritize level of village development in Thailand 2. Project results The new categorization through Exploratory Data Analy- sis Method, using NRD2c indicator database, can identify the factor influencing on socio-economic condition of villages more appropriately. Thus it will 33 reflect regional and village differences more efficiently. Verification between the original three level classification with this factor analysis in 19 villages showed 70% consistency Review of Thailand’s Official Poverty Line V.Part I: 1. Activity Review of Thailand’s Official Poverty Line 2. Responsible Agency NESDB, UNESCAP, UNDP 3. Project Manager Mr. Teparat Watcharangkul (Consultant: Nanak Kakawani) Part II: 1. Budget US$ 2,380.95 2. Disbursement Amount US$ 1,227.82 3. Starting Date February 1, 2003 4. Ending Date June 30, 2003 5. Period 5 months Part III: 1. Objective To review of current Thailand’s poverty line to ensure its adequately capturing the current standard of living in Thailand; To propose possible adjustment on methodology for poverty line calculation technique 2. Project results It is important to address the social norm acceptance issue, especially on the non-food component such as education, health and etc. 34 It is also necessary to focus on the needed analysis classification, based on sex and age, for instance on clothing which woman usually needs it more than man. It is a crucial point that economies of scales be taken into account for the line calculation. Weighting on goods prices, adding more items in the basket to assure full representative of needs, and dealing more on consistency issue, should be considered. It is important to concern on quality of goods such as clothing, shoes, when calculating price index of the non- food items across regions. Income Distribution in Thailand: Determinants and Impacts VI.Part I: 1. Activity Income Distribution in Thailand: Determinants and Impacts 2. Responsible Agency NESDB 3. Project Manager Ms. Somsri Luangmaneerat (Consultant: Prof. Dr. Medhi Krongkaew, Prof. Dr. Anne E. Booth) Part II: 1. Budget US$ 19,319.05 2. Disbursement Amount US$ 16,605.51 3. Starting Date June 1, 2003 4. Ending Date October 31, 2003 5. Period 5 months Part III: 1. Objective To review the general background of income distribution in Thailand for deeper understanding the situation of income inequality; To formulate suggestions, concerning the policies to alleviate the income inequality and the tools for simulating the impact of specific policy intervention on 35 income distribution. 2. Project results The study on in-depth analysis of inequality showed that the rapid economic growth of the country since 1960s has centered on Bangkok, with economic growth being lower in the North, the Northeast and the South, resulting in regional disparities. The study suggests policy interventions (budgetary, monetary, price, minimum wage, and trade and exchange rate policies) which might be most effective in reducing income inequality in Thailand and indicates how the results of such interventions might be monitored. The Study of Women Participation in Tumbon Administrative Organization and Poverty Reduction VII.Part I: 1. Activity The Study of Women Participation in Tumbon Administrative Organization (TAO) and Poverty Reduction 2. Responsible Agency NESDB 3. Project Manager Ms. Anya Suwansrinon (Consultant: Ms. Pornpimol Rojjanapo) Part II: 1. Budget US$ 14,595.24 2. Disbursement Amount US$ 13,817.11 3. Starting Date January 31, 2003 4. Ending Date October 31, 2003 5. Period 9 months Part III: 1. Objective To make a comparative study on the potential of TAO poverty reduction before and after women participating in its operation; To study factors and incentives leading to recognition of women in TAO, including analyze factors leading to success and obstacles of women; 36 To make suggestion and recommendation for guide- lining policy and measures in poverty reduction with an emphasis on supporting and promoting women role in TAO 2. Project results The study showed that increasing the role of women in the TAO can strengthen the efficiency of community development programs. Despite finding that women would not necessarily have different priorities poverty reduction policies, research and field visits showed that having more women participating in the TAO could develop and support community’s strength. Empirical Studies on Poverty in Thailand: Phase II VIII.Part I: 1. Activity Empirical Studies on Poverty in Thailand: Phase II 2. Responsible Agency TDRI 3. Project Manager Dr. Somchai Jitsuchon Part II: 1. Budget US$ 207,000 2. Disbursement Amount US$ 207,000 3. Starting Date October 1, 2002 4. Ending Date May 31, 2003 5. Period 8 months Part III: 1. Objective To design effective poverty reduction policies and raise poverty issues in the public debate. This partnership puts emphasis on identifying major constraints to and opportunities for further reduction of poverty and bringing to the fore of policy debate the issues of equity and distribution in Thailand. In addition, the activity will encourage full participation by all stakeholders through networking with other related agencies and civil society groups in carrying 37 out the activities in the project. 2. Project results The study continued desk researches from the phase I as follows; The first desk research stressed the importance among the elderly, and recommended that a universal pensions should be adopt to all people older than 60 years who are not eligible to any other government assistance programs. The second desk found that the 30 baht scheme reaches the poor much better than past attempts in health care provision. The poor are now better insured against catastrophic illness. The third desk found that there are heterogeneities among households in terms of ability to insure oneself against income fluctuations. Yet, specific key characteristics, leading to reduction of chronic poverty were not mentioned in the paper. The ultimate contributions of government reforms are either too early to evaluate or there are still no evidences to conclude either way. Preparation of Community Plan Development IX.Part I: 1. Activity Preparation of Community Plan Development 2. Responsible Agency NESDB 3. Project Manager Mr. Araya Ma-In, Mr. Pichai Likitworakul, Ms. Thivaporn Tuncharuen Part II: 1. Budget US$ 121,921.93 2. Disbursement Amount US$ 107,339.96 3. Starting Date June 4, 2002 4. Ending Date October 31, 2003 5. Period 16 months Part III: 1. Objective To strengthen cooperation across development partners in developing community plan at the target Tambons, with an aim to reduce poverty; To promote participatory approach at all levels to support Poverty Reduction Strategy; To support an establishment of poverty reduction insti- tute; To assess successful community plan to further adopting 38 as best practice for development partners to implement in community; To prepare development partners for the government’s integrated community development plan project. 2. Project results Ten regional workshops were organized, bringing in various stakeholders to prepare guidelines and manuals to be used during the actual process of community plan development on which the government has allocated approximately 8,500 million bath. Existing community plans were assessed and those with best practices are adopted which will be useful during the implementation of the government budget. Based on regional workshops and field trips, community participation as the key actor in solving community problems was strengthened. Piloting One Stop Service in Community X.Part I: 1. Activity Piloting One Stop Service in Community 2. Responsible Agency NESDB 3. Project Manager Ms. Suwannee Kongmun Part II: 1. Budget US$ 28,904.76 2. Disbursement Amount US$ 26,911.13 3. Starting Date October 1 , 2002 4. Ending Date October 31, 2003 5. Period 12 months Part III: 1. Objective To pilot study a social safety net to search for effective management and realistic result; To develop a proposal for the management of one stop service providing better access for the poor to social safety net programs 2. Project results The study investigated the capacity of pilot communities to deliver their own social safety net. The finding will be integrated into the development of the administrative 39 models suitable for different areas. The study found that common problems of rural commu- nities are income generation, employment, welfare, debt, natural peril and environment. In fact, communities have their own capitals and the participatory session assisted communities to realize their strength and come up with measures to utilize those capitals to support the vulnerable within the communities. Strong leadership is an important condition for the community program success. Millennium Development Goals (MDGs) in Thailand XI.Part I: 1. Activity Millennium Development Goals (MDGs) in Thailand 2. Responsible Agency NESDB, UNDP, WB 3. Project Manager Ms. Punnipa Kasetsiri (Consultant: Ms. Parichart Siwalucka, Mr. Nazir Ahmad) Part II: 1. Budget US$ 42,088.81 2. Disbursement Amount US$ 38,185.88 3. Starting Date December 1, 2002 4. Ending Date October 31, 2003 5. Period 11 months Part III: 1. Objective To undertake official review of development situation in Thailand, based on Millennium Development Goals (MDGs) indicators. To create an enabling institutional environment where the national policy framework takes into account the MDGs and to undertake joint advocacy to promote and ensure progress towards attaining the MDGs 2. Project results The first MDG-Report (MDG-R) was prepared, stressing 40 8 goals (poverty, education, child mortality, maternal health, HIV/AIDS, gender, environment, and international collaboration) Participants agreed on targets and indicators, which are localized to suite current policies and existing indicators. MDG-Plus and provincial MDGs, the first sub-national MDGs, have been introduced. Date of Submission: May 19, 2003 SUMMARY TECHNICAL ASSISTANCE FUNDING PROPOSAL FOR ASEM TRUST FUND A. COUNTRY[NB2] : Thailand B. PROJECT[NB3] NAME : Capacity Building and Strategy for Poverty Reduction II C. TECHNICAL ASSISTANCE SUMMARY The proposal will support the implementation of the second stage of CDP-PAM. The technical assistance will be in the form of capacity building activities, policy reform and social movement activities to support the efforts to successfully implement the poverty reduction strategy based on the Ninth Plan. The focus will be to assist on a selective basis policy reforms of the government’ 41 s poverty reduction agenda through improved data, analysis, actions, and monitoring and evaluation. A central topic will be to enhance the knowledge of, and to design appropriate poverty strategies to reduce, spatial differences in poverty, inequality, and other social indicators. Despite Thailand’s impressive progress with poverty reduction, pockets of deprivation still exist and regional disparities are high. A better understanding of poverty at the local level is not just important for ensuring adequate monitoring in the context of the ongoing decentralization, but also for formulating appropriate policies to accelerate growth and poverty reduction in lagging regions. D. AMOUNT OF GRANT REQUESTED US$ 920,000 E. SECTOR BOARD REVIEWERS’ COMMENTS Please retain the sector board’s comments before submitting the proposal to the In-Country Steering Committee. Name: Tamar Manuelyan Atinc (Sector Manager, EASPR) Date: May 16, 2003 Comments: The CDP-PAM ASEM TF proposal has my strong support. Building on outputs of the first phase of CDP-PAM, the proposal focuses on following through essential improvements in poverty analysis and monitoring to ensure policy reform impact. It is fully consistent with the Poverty Reduction Strategy of the Ninth Plan and the World Bank Country Assistance Strategy. F. IN-COUNTRY STEERING COMMITTEE ENDORSEMENT Name: Thailand’s In-Country Steering Committee Date: June 3rd, 2003 Comments: The ICSC has fully endorsed the proposal. The proposal is ranked first among the three proposals submitted to the committee. It is in line with the objective of the Ninth National Economic and Social Development Plan (9th Plan) and the Poverty Reduction Strategies where poverty alleviation is the main expected result. In addition, it is also consistent with the World Bank Country Assistance Strategy. Successful implementation of this proposal will enhance knowledge on poverty, promote research capacity, expand dialogue and trainings, as well as develop systems of poverty 42 monitoring and poverty policy evaluation systems. Annex III: CDP-PAM Phase II Framework TECHNICAL ASSISTANCE FUNDING PROPOSAL FOR ASEM TRUST FUND A. COUNTRY[NB5] : Thailand B. PROJECT NAME : Capacity Building and Strategy for Poverty Reduction II C. TASK TEAM LEADER/MANAGING UNIT Kaspar Richter, EASPR D. FINANCING PLAN ASEM USD 920,000 (excluding managing unit costs) Government (in-kind and/or cash) USD 70,000 (in cash) USD 160,000 (counterpart, in-kind contribution) Other (state which) USD 150,000 (World Bank internal budget) TOTAL USD 1,300,000 E. BACKGROUND The Background should include a brief description of the sector framework and the relationship to the Country Assistance Strategy for the sector. Include reference to related planned and/or on-going activities (such as loan/credit, and technical assistance funded from other sources, e.g., PHRD). The 2002 Country Assistance Strategy (CAS) provides a framework for the World Bank to engage as a Development Partner in the implementation of Thailand’s development and poverty reduction agenda. This support is delivered mainly through multi-year Country Development Partnerships which address a Government led program of reforms in well-defined and specific areas. These partnerships leverage financing of the Government, World Bank, and other donors 43 with trust fund resources. The CDP on Poverty Analysis and Monitoring (CDP-PAM) is one of the four ongoing CDPs, with the Office of the National Economic and Social Development Board (NESDB) as lead Government agency. It supports a series of capacity building and technical assistance activities with a focus on upgrading the poverty data base; improving poverty analysis, developing anti-poverty policies, and enhancing poverty monitoring and evaluation. The first year’s activities are expected to be concluded successfully by October 2003. Expected key outputs include the development of a poverty map, a feasibility study on a panel component of the Thai Socio-Economic Survey (SES), an expert review meeting on the official poverty line methodology, a manual and training program for community leader to prepare unified poverty- oriented community strategies, and the Millennium Development Goals Report (MDG-R). This proposal requests funding of a second stage of CDP-PAM, which will involve the application of technical and analytical insights gained and a consolidation of the outcomes achieved in the first stage to improve their policy reform impact. In addition, the World Bank has provided significant support to the Thai poverty reduction program through intensive policy dialogue, technical assistance, and knowledge sharing as follows: ASEM Trust Fund (TF050488) of USD 207,000, which will be closed in October 2003, support the NESDB in articulating anti poverty policy as well as assisting relevant government agencies in their anti-poverty approaches. The technical assistance, implementing through local institution - Thailand Development Research Institute (TDRI) -has helped to build consensus on appropriate definition of poverty, inequality and its dimensions in Thailand, to promote participatory implementation strategy, to improve public awareness programs and to help bring to the fore issues of equity and distribution of Thailand’s achievements in the social domain. ASEM Trust Fund (TF050489) of USD 375,000, which will be closed in October 2003, assist the government in developing and implementing its 9th National Economic and Social Development Plan (2002-2006) with a focus on poverty reduction. The technical assistance has supported the government in implementing effective poverty reduction strategies through the development of basic tools for public policy, new indicators that are more relevant to the Thai context, and poverty monitoring and policy evaluation system. ASEM Trust Fund (TF023261) of USD 843,800, which closed in August 2002, assisted the NESDB, and other institution in countries affected by the Asian crisis, in developing capacity to monitor the impacts and incidence of public expenditure, the level of poverty and the profile of the poor, and the community role in local development and poverty reduction. Through this grant, the followings were achieved: (1) community data system which resulted in a better understanding of the data development and management as well as budget allocation, (2) structural poverty analysis which broaden poverty indicators that covered all aspects, and (3) development of poverty database through systematic village level data. The CDP-PAM comes at an opportune time to assist Thailand at a key juncture in the development 44 of its anti-poverty policies. The decade up to the mid-1990s was a period of strong growth and poverty reduction in Thailand, just as in East Asia as a whole, with poverty falling from over 30 percent to less than 12 percent. The trajectory of high growth with declining poverty was interrupted during the Asian crisis, but the economic recovery over the last few years has again led to increasing living standards. In 2002, poverty is likely to have dropped below the level before the crisis. However, the moderate outlook for the Thai economy over the next years casts doubts over whether economic growth alone will be sufficient to ensure a continuous decline in poverty rates. In addition, the crisis also demonstrated that broader sections of the population remain vulnerable to poverty in the face of adverse shocks. Further, economic growth has benefited some regions more than others, and some districts continue to be marred by poverty. Finally, the country is struggling to reconcile the structural changes arising in the transition from an agricultural-based to an urbanized service-driven economy with the desire to preserve strong communities and traditional social institutions. With poverty reemerging as a central concern in post-crisis period, Thailand has entered a process of reviewing poverty policies, programs, and projects. The government has recognized poverty alleviation as a high priority area in the Ninth National Economic and Social Development Plan (2002-2006). The government also developed a Poverty Reduction Strategy based on the framework of Ninth Plan, and organized around five strategies (macroeconomic; capacity building for the poor; social protection; natural resource management; and public sector restructuring). The Poverty Reduction Strategy emphasizes the importance of sustainable and balanced rural and urban development and focuses on the empowerment of community organizations and civil society; decentralization and devolution of decision making power and resources; developing border provinces to serve as economic gateways; and providing greater access to sources of information and knowledge for remote regions. The government has emphasized poverty reduction as a central policy focus. It has implemented fiscal spending programs targeted at rural areas, including a revolving village fund of Bt1 million, distributed to about 70,000 villages over a three-year horizon for a total cost of up to Bt 77 billion (around 1.5 percent of 2001 GDP). In addition, the government has declared poverty reduction as one of the four national agenda where the issues will be handled in a systematic manner, along with strengthening competitiveness, improving social capital, and promoting sustainable development. F. OBJECTIVES The objective of this proposal is to support the second stage of CDP-PAM. The focus are capacity building activities, policy reform and community activities to support the efforts to successfully implement the poverty reduction strategy based on the Ninth Plan. The nature of CDP-PAM is a multi-year rolling reform program financed through a combination of Government, World Bank, other donors, and trust fund resources. While CDP-PAM is supporting an ongoing operational program of capacity building and reform implementation, the most important indicator is an achievement of reform milestones, as agreed at the beginning of each year. The key strength of the CDP instrument is its voluntary and mutual character. This nature of the CDP instrument 45 means that reform packages will reflect a more consensual process, with both sides having learned from each other and may compromise some of their reform preferences. Such arrangement have a potential for sustainable results. CDP-PAM assists NESDB and other government agencies to develop capacity to formulate, implement, and evaluate poverty reduction policies. The objectives are as follows: To provide timely information by developing and upgrading the poverty data base; To improve the understanding of the pattern and causes of poverty by applying new methodologies to poverty analysis; To strengthen the poverty focus of government policies by assisting in the development of poverty reduction strategies; and To enable policy makers to target interventions more effectively by monitoring progress towards poverty reduction goals and evaluating selected policies and programs. G. DESCRIPTION OF PROPOSED TECHNICAL ASSISTANCE This section describes the broad content of the proposed components and lists specific activities that are planned based on the experience and outputs of the first stage of CDP-PAM. The focus will continue to be to assist on a selective basis policy reforms of the government’s poverty reduction agenda through improved data, analysis, actions, and monitoring and evaluation. A central topic will be to enhance the knowledge of, and to design appropriate poverty strategies to reduce, spatial differences in poverty, inequality, and other social indicators. Despite Thailand’s impressive progress with poverty reduction, pockets of deprivation still exist and regional dis- parities are high. A better understanding of poverty at the local level is not just important for ensuring adequate monitoring in the context of the ongoing decentralization, but also for formulating appropriate policies to accelerate growth and poverty reduction in lagging regions. Overall, there are six components, comprising the four basic themes, and two cross-cutting categories: I) Upgrade poverty database (US$180,000) II) Deepen analysis of and knowledge about poverty and inequality (US$80,000) III) Develop poverty reduction policies and strategies (US$180,000) IV) Monitor progress in poverty reduction and evaluate anti-poverty policies (US$130,000) V) North-East development strategy (US$200,000) VI) Project Implementation Unit (US$150,000). Component 1: Upgrade poverty database (US$ 180,000) A comprehensive and up-to-date poverty database is an essential input into developing and monitoring poverty reduction policies. One key aspect of such a database is the spatial dimension of poverty. Thailand’s decentralization process is likely to lead to a shifting of expenditure 46 responsibilities from central government to regional or local governmental or non-governmental agents. The design of decentralization processes and local decision-making need to be based on reliable, locally relevant information on living standards and the distribution of wealth. An understanding of poverty and inequality levels at detailed spatial scale is a prerequisite for geographic targeting of interventions aimed at improving welfare levels. Key outputs from the first phase of CDP-PAM included the creation of a poverty map, estimating consumption- and income-based welfare indicators for small geographic areas such as districts and sub-districts; the consolidation of existing village-level databases (BMN, NRD2C); and the revision of the official poverty line definition to improve its regional representatives. Building on these outputs, the second stage of CDP-PAM will support activities that integrate the existing poverty data bases, ensure consistency with the revised poverty line definition, develop a corresponding spatial fiscal data base, and improve the incorporation of dynamic aspects of poverty: Consolidation of poverty map and databases such as NRD2C, BMN, and MDGs. By comparing and integrating the results from poverty map with alternative databases for standard of living (BMN, NRD2C, MDG), policy makers and researchers will gain a better picture on the spatial poverty profile. This improved database can serve as a basis for revisions of the government list of “poor� districts. A particular focus of this comparison should also be on urban areas. Household survey data suggests poverty is absent from Bangkok, and low in other urban centers. This contradicts qualitative studies on the existence of urban slums and joblessness, and raises concerns about the representativeness of the households survey in urban areas. Poverty line revision. The poverty line methodology will be revised and updated using the 2002 SES. This will require an adjustment of poverty statistics from previous surveys, and of data sets derived using the poverty line, including the poverty map. This activity should be accompanied with capacity building on the revised methodology. SES panel: Panel data, which follows the unit of observation over time, is important for insights in dynamic issues, like the escaping out of, or falling back into poverty. Following recommendations of panel survey experts, provided during the first stage of CDP-PAM, a pilot survey with a SES panel will be conducted. Fiscal data base: The incidence of government spending and taxation across regions and sectors plays an important role in determining poverty outcomes. Yet, disaggregated information on the allocation of public resources is scattered. This activity brings together different data sources to develop a fiscal data base. Component 2: Deepen analysis of and knowledge about poverty and inequality (US$ 80,000) Improving the knowledge of techniques to measure and analyze poverty, inequality, and vulnerability will support the government’s efforts to monitor changes in the living standards of the poor. This component includes both capacity building on up-to-date analytical tools and studies on identified knowledge gaps. Poverty reduction policies often go through both macro- 47 economic and structural instruments aimed at enhancing economic activity and growth. The actual changes in living standards generated by these interventions is complicated by the fundamental difficulty of establishing satisfactory linkages between micro and macro analysis. There are various tools presently available to evaluate the impact of economic policies in general on poverty reduction, or on the distribution of living standards. In particular, these methods can address issues around the common thread of çincidence analysisé, related to indirect taxation and subsidies, public spending programs, at the national and local levels and from an ex-ante and an ex-post point of view. NESDB is responsible for providing assessments of the impact of policy changes on poverty and inequality, yet it lacks the tools to conduct such analyses. This component includes the following activity: Modelling of impact of fiscal policy on income distribution. Government expenditure and taxation decisions have a direct impact on the income distribution. A simple yet informative tool will be developed that captures the distributional impact of, for example, changes in tax rates and benefit schemes. Component 3: Develop poverty reduction policies and strategies (US$ 180,000) The ultimate objective of measuring and analyzing poverty is to design more effective policies. Drawing on the lessons from the other components, this activity focuses on identifying public actions with a high poverty reduction impact, taking into account institutional and fiscal constraints. Over the last few years, Thailand has embraced a decentralization process, aiming to increase the share of local government revenue from 20% in FY2001 to 35% in FY2006. However, many issues remain to be resolved. The devolution of revenues, functions, and personnel have not been done in an integrated manner. Communities do not have coherent poverty reduction strategies, which reflect their own needs and preferences. Local government capacity is extremely limited, and few personnel have been transferred to the local level. There are approximately 8,000 tambons, many of which are too small to take on broader responsibilities. The challenge is to strengthen capacities at the local level to ensure a better access of the poor to basic social services. Further, it will be important to build on the lessons learnt during this phase in the preparation of NESDB’s next development plan. During the first phase of CDP-PAM, a manual on poverty-focused community development plans was developed, and workshops were held in all regions to instruct community leader on these manuals. Further, a study was conducted to review options to develop çone-stop servicesé at the local level to enhance access of the poor to social safety net programs. Building on these activities, planned activities for the next stage include: Implementation of Tambon-level community plans: Thailand aims at developing unified poverty oriented community plans in all poor districts over the next three years, following guidelines developed as part of CDP-PAM’s first year’s activities. This activity will develop and apply a system to monitor the progress in designing and implementing the Tambon level community plans. Social service delivery and decentralization: “One-stop� services may play an important 48 role in strengthening local government’s capacity to deliver services in an efficient and transparent manner. This activity will support the implementation of such services in selected pilot communities. Beyond the Ninth Plan: Economic growth and grassroot initiatives is likely to lower poverty to a single digit number over the next year and eliminate absolute deprivation for all but a small segment of the population. Nevertheless, vulnerability to income and health shocks, unequal distribution of resources and opportunities, environmental degradation, and the challenges of the globalized world remain fundamental challenges. Based on the lessons learnt from CDP-PAM and other activities, this task will review selected issues on the poverty agenda as an input into the preparations for Thailand’s next development plan, which are scheduled to commence during 2005. Compenent 4: Monitoring progress in poverty reduction and evaluate anti-poverty policies (US$ 130,000) Monitoring and evaluation systems enable the government to assess whether a poverty reduction strategy is effective in reducing poverty. Monitoring concerns the issue of measuring the progress towards poverty reduction goals. Monitoring progress on the implementation of the poverty reduction strategy for Thailand will entail institutionalizing a system of data collection, analysis and reporting on a set of well-defined indicators. Given the multi-dimensional nature of poverty and the commitment to the Millennium Development Goals, this requires monitoring both consumption-based poverty and other dimensions of well-being, like access to basic services (such as education, health, safe drinking water). Disaggregated information by region and household characteristics is essential for understanding how overall trends are related to the welfare of specific groups. Apart from monitoring, the evaluation of specific policies and programs is essential to assess the extent to which improvements in outcomes are due to those public actions. The dissemination of monitoring and evaluation are critical. Findings that are not widely disseminated, through various mechanisms tailored to different groups in government and civil society, will not be used, and the resources that were spent in getting such results will be wasted. One of the key outputs of CDP-PAM’s first year-activities is the Millennium Development Goals Report (MDG-R). With the collaboration of donors and the inputs from various government agencies, NESDB developed a çMDG-plusé agenda, standing for more ambitious progress in social development than reflected in MDGs. Targets go beyond the global blueprint in terms of quality, scope, and spatial dimension, highlighting variation across provinces. Proposed activities for the second stage include: Province-level MDG Reports: While Thailand will meet or surpass most of the MDGs at the national level, the picture is less satisfactory at the province level. This activity focuses on providing disaggregated monitoring of the progress towards the MDGs. As a pilot project to assess the challenges of meeting the MDGs in lagging areas, a Provincial MDGs- Report for Mae Hong Son, the northearn province, will be prepared. Mae Hong Son is an ideal candidate for this pilot as it is one of the poorest provinces in the country and is home to an ethnically diversified population (Thai, Karens, and Chinese, including a large refugee 49 population from bordering Burma.) Village Fund Evaluation: One of the recent key initiatives of the government is the Village and Urban Community Fund (VUCF). It is a revolving fund of Bt1 million (about US$23,000), distributed nationwide to the about 70,000 villages over a three-year horizon for a total cost of up to Bt 77 billion (around 1.5 percent of 2001 GDP). VUCF has been implemented for almost two years, yet there has been no rigorous impact evaluation to date. This study will evaluate the VUCF impact on household poverty and other social indicators using matching and difference-in-differences techniques. Knowledge dissemination: An essential component of any poverty monitoring system is dissemination of findings and experiences. NESDB, as focal agency in Thailand to design and implement the poverty reduction strategy, and as key user of NSO’s poverty database, has a wide experience on progress in poverty reduction, and successes and failures of specific poverty reduction initiatives. Through development of an interactive poverty website and organizations of poverty workshops, a forum of regional cooperation will be established. Under such forum, knowledge on poverty and poverty monitoring indicators will be shared and network with other countries in the region will be created. Component 5: Development strategy for the North-East (US$ 200,000) While large parts of Thailand’s underwent a dramatic urbanization and modernization process over the last decades, the Northeast has remained at the periphery of this development push. Thailand’s Northeast is the poorest and most populous region in the country. About three fifth of the poor live in the Northeast. The poverty headcount of around 20 percent is about twice the national average, and income inequality is the highest among all regions, with a Gini coefficient of 0.52. Further, the recent Asian crisis illustrated the specific vulnerability of the Northeast, which suffered most from the economic downturn. The literature refers to a wide range of reasons for the underdevelopment, including social, economic, environmental, ethnic, and political factors. For example, most farms in the Northeast depend on rain water, and are confronted with problems like soil salinity, soil erosion, and the depletion of forest areas. Farmers are also highly exposed to adverse price movements in rice and sugarcane. The persistence of the gap in living standards between the Northeast and the rest of the country suggest that there is little reson to believe that these differences will disappear very quickly. Factor mobility and inter-regional trade, and technology or know-how diffusion through imitation across regions and migration, may not be large enough to equalize per capita income differences any time soon. In the absence of convergence, addressing poverty in the Northeast may therefore require both removing internal barriers to goods and factor mobility and direct policy interventions that encourage a faster development. However, long experience with regional policy in industrial countries suggests that there is no easy way to iron out subnational differences. In particular, there is little evidence that large public infrastructure investments in subnational regions, or strategic investments in leading sectors or industries, can be used to create growth poles. Similarly, equalizing fiscal transfer systems have often failed to generate an economic dynamism that would prevent poorer regions from becoming permanently dependent on the central government. 50 The objective of this component is to provide a succint analytical summary of the causes of the deprivation in the Northeast, and to develop a Northeast strategy to overcome the challenges of backwardness. In addition to a nation-wide investment climate survey, NESDB and the World Bank agreed that this report be one of two World Bank inputs into the preparation of the mid- term review of the Ninth Plan scheduled for the second half of 2004. This work will be conducted in close collaboration with NESDB’s Northeast center, drawing on local and international expertise. This study will serve as a pilot exercise on developing a regional strategy in line with the Ninth Plan. NESDB can subsequently draw on this experience to layout similar strategies for the other four regions. In particular, this study will: 1. Compile a comprehensive comparative database of the Northeast with the other regions, drawing on the Socio-Economic Surveys and and labor force surveys, and regional level data sets.2 2. Review the current poverty situation, covering all relevant dimensions of living standards; 3. Review the successes and failures of public actions, focusing on large scale development projects and current government initiatives; 2 Parts of the SES, including information on agriculture and household incomes, are typically only entered from the hardcopies in summary form. It will be important to ensure that all relevant sections of the SES will be entered electronically. 4. Evaluate the contribution of alternative factors to the Northeast’s economic backwardness compared to other regions in Thailand, including low productivity in agriculture, limited human capital, extensive migration towards Bangkok and other urban areas, poor investment climate, weak governance, lack of resources, underdeveloped trade etc; and 5. Propose a development strategy for the Northeast region. Component 6: Project Coordination Unit and Dissemination (US$ 150,000) Given the broad area and program addressed by CDP-PAM as well as the need for coordination across components, the Project Coordination Unit (PCU) was established, led by a project coordinator, who was appointed by the NESDB for overseeing the day-to-day activities on the project. This unit has provided cross support to CDP-PAM steering committee and all relevant agencies under CDP-PAM and the consultants have worked successfully with CDP-PAM throughout its first stage. The NESDB and the Bank concur that this continued arragement is necessary to maintain the momentum and ensure that key reforms are implemented in stage 2. H. EXPECTED OUTPUTS CDP-PAM is moving toward its second and third year of implementation, building on list of completed technical, analytical, and policy reports and experiences. Building on these, the forthcoming output will consist of three categories: technical assistance and analysis, workshops 51 and capacity building, and implementation and dissesmination. Corresponding to each component in section G, the following outputs are expected from the second phase: Component 1: Upgrading poverty database 1.1 Consolidation of poverty map and village database - NRD2C and BMN to identify poor areas. 1.2 Development of urban poverty indicators. 1.3 Implication of poverty line revision for panel component of Socio-economic Survey and poverty map. 1.4 Pilot study on setting up a panel SES component. 1.5 Capacity building for NSO staff for the implementation of Panel component of Socio- economic Survey. 1.6 Development of disaggregated fiscal database to identify incidence of government spending and its impact on poverty reduction. Component 2: Deepending analysis of and knowledge about poverty and inequality 2.1 Analytical tools for analyzing income inequality and evaluating government programs on distribution of income and welfare in Thailand. 2.2 Capacity building for the government staff on income inequality analysis. Component 3: Develop poverty reduction policies and strategies 3.1 Development of a system to monitor and evaluate the implementation of the community plans and welfare development. 3.2 Implementation of pilot programs for “one stop� social service delivery. 3.3 Review of lessons learnt from CDP-PAM for NESDB’s next development plan. Component 4: Monitor progress in poverty reduction and evaluate anti-poverty policies 4.1 Implementation of monitoring system at the provincial and regional level in accordance with the Millennium Development Goals (MDGs) 4.2 Establishment of the system to monitor the result of the village fund implementation and its impacts. 4.3 Dissemination of poverty related issues through poverty web site and regional cooperation. Component 5: Development strategy for the North-East 5.1 Review of pattern of poverty situation in the Northeast and of causes for the region’s economic backwardness. 5.2 Establishment of comprehensive comparative database of the northeast with other regions. 5.3 Framework and guidelines for formulating Poverty Reduction Strategy for the Northeast region. Component 6: Project Coordination Unit and Dissemination 52 6.1 Implementation of activities under CDP-PAM with regular consultations with CDP-PAM Steering Committee. 6.2 Monitoring workshops with government, line agencies, civil service organizations (CSO), non-governmental organization (NGO), and academia, is held to review lessons leanred and implementation progress of CDP-PAM. 6.3 Dissemination of key findings and policy results. I. MONITORING INDICATORS Component 1: Upgrading poverty database Consolidated poverty database is institutionalized and is utilized for further poverty analysis and for better targeted poverty reduction policies. Poverty indicators for urban poor are are developed. Updated poverty line is implemented to establish accurate poverty measurement that reflect true cost of living. Characteristics that cause changes in the welfare of households are identified by tracking same households over time through panel SES. Government resources are allocated towards targeted poor areas. Local authorities are able to make better decisions based on reliable, locally relevant information on living standards and distribution of wealth. Component 2: Deepening analysis of and knowledge about poverty and inequality Appropriated strategies are identified to lessen the severity of regional and overall inequality situation in Thailand. Government’s fiscal policy takes into account equal distribution of income. Component 3: Develop poverty reduction policies and strategies Progress in implementation of Tambon-level community plans is monitored and reported. Social services are locally delivered in an efficient and transparent manner. Appropriated poverty reduction strategies are being proposed based on findings from activities under CDP-PAM. Component 4: Monitor progress in poverty reduction and evaluate anti poverty policies Poverty, social and environmental situations, based on MDGs indicators, in Thailand are closely monitored and required actions are taken to ensure continuous progress and sustainable development. Short-term impact of Village Fund on poverty is evaluated. Knowledge sharing tool on data and policy experiences with poverty reduction is established. Component 5: North-East development strategy Policy makers understand causes and reasons of persistent poverty in the northeast and 53 take appropriate actions to lessen the poverty incidence. Poverty reduction strategies for the North-East region are proposed to overcome the challenges of backwardness. Component 6: Project Coordination Unit and Dissemination NESDB finds activities implemented under CDP-PAM useful for its role as central planning agency and institutionalizes those activities for sustainability. CDP-PAM is successfully implemented. J. EXECUTION ARRANGEMENT All ASEM activities are expected to be executed by the recipients. Explain in this section which entity is to be responsible for executing the proposed activities. If Bank execution is proposed, please provide a rationale for such an arrangement. Based on the strong capacity demonstrated in managing project and executing grant resources during the first year of CDP-PAM, the NESDB will continue to be principle agency in executing project. In addition, the National Statistical Office (NSO) will also participate as counterpart. The NESDB will also work closely with the Ministry of Finance (MOF) to ensure that the administration of grant resources satisfies both the World Bank and the Royal Thai Government procurement regulations. The Steering Committee, which was instituted at the beginning of phase 1, will continue to provide guidance and suggestion regarding the implementation of the activities under CDP- PAM. In addition, it will also evaluate the results and outcome of the activities performed under CDP-PAM and follow up on actual reforms that take place as a result of the implementation of CDP-PAM. The day-to-day progress and coordination across agencies will be performed by a lead project coordinator who will be appointed by the NESDB. The project coordinator will report directly to the Steering Committee and CDP-PAM project manager, a senior officer at the NESDB. Expatriate and local consultants will be contracted through the Project Coordination Unit (PCU) to undertake technical assistance and training activities. In addition, expertise from the World Bank staff both from the headquarters and the Bangkok Office will be provided from time to time. The total grant ($900,000) will be divided into two parts and will be executed by two different agencies. NESDB execution will cover the activities under component 1, 2, 3, 4 and 6. This amount of grant in total will not exceed $720,000 The Bank execution will cover the activities under component 5 and the total amout will not exceed $200,000 54 In contrast to the other components, Component 5 (Development Strategy for the Northeast) will be Bank executed. There are two reasons to justify this mode of execution. First, in agreement with NESDB, the Bank has been assigned the explicit responsibility of delivering a Northeast Development Strategy as one of two inputs into NESDB’s mid-term review planned for the second half 2004. Second, it will be essential to bring in international experience with regional development policies. Since there is little expertise within Thailand on regional development policies outside of Thailand, it will be important to draw heavily on international consultants. The Bank has a comparative advantage in recruiting, managing, and supervising such experts. K. TIMETABLE [NB6] Activities are monitored against the proposed timetable. Please make a realistic assumption. Any request for extension of closing dates will be carefully reviewed against the timetable. All ASEMII activities are to be completed by August 2005. The following schedule is proposed for project preparation. Appointment of specialists August 2003 TA Implemenmtation period September 2003 - July 2005 Final reports August 2005 L. USE OF GRANT FUNDS Using the excel sheet form, attach a cost table for the proposed activities. Table 1: Proposed Budget Tabe 1: Proposed Budget Components Activities No. of Unit Rate Duration Costs Net Cost Cons. with 92% SDP (month only) (month only) USD USD 1. Upgrade poverty database 188,264 180,000 Policy & technical specialists Fees: International 3 12,000 1 36,000 33,120 Local 5 4,000 2 40,000 36,800 Travel : Inter’l 3 3,200 1 9,600 8,832 Domestic 5 120 2 1,200 1,104 Subsistence: Inter’l 3 3,000 1 9,000 8,280 Domestic 5 50/trip/day 10 x 3 7,500 6,900 Total Consulting Services 103,300 95,036 Other expenses (if any): 15 84,964 84,964 Workshops and Training - Approximately 300 participants 55 - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops - Translation fees Total Workshops 84,964 84,964 2. Deepen analysis of and knowledge about poverty and inequality 82,870 80,000 Policy & technical specialists Fees: International 1 12,000 1 12,000 11,040 Local 2 4,000 2 16,000 14,720 Travel : Inter’l 1 3,200 1 3,200 2,944 Domestic 2 120 2 480 442 Subsistence: Inter’l 1 3,000 1 3,000 2,760 Domestic 2 50/trip/day 4x3 1,200 1,104 Total Consulting Services 35,880 33,010 Other expenses (if any): 8 46,990 46,990 Workshops and Training - Approximately 300 participants - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops - Translation fees Total Workshops 46,990 46,990 Tabe 1: Proposed Budget Components Activities No. of Unit Rate Duration Costs Net Cost Cons. with 92% SDP (month only) (month only) USD USD 3. Develop poverty reductioin policies and strategies 189,006 180,000 Policy & technical specialists Fees: International 2 12,000 2 48,000 44,160 Local 3 4,000 3 36,000 33,120 Travel : Inter’l 2 3,200 2 12,800 11,776 Domestic 3 120 3 1,080 994 Subsistence: Inter’l 2 3,000 2 12,000 11,040 Domestic 3 50/trip/day 6x3 2,700 2,484 Total Consulting Services 112,580 103,574 Other expenses (if any): 18 76,426 76,426 Workshops and Training - Approximately 300 participants - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops - Translation fees Total Workshops 76,426 76,426 4. Monitor progress in poverty reduction and evaluate anti-poverty policies 137,526 130,000 Policy & technical specialists Fees: International 2 12,000 2 48,000 44,160 56 Local 4 4,000 1 16,000 14,720 Travel : Inter’l 2 3,200 2 12,800 11,776 Domestic 4 120 1 480 442 Subsistence: Inter’l 2 3,000 2 12,000 11,040 Domestic 4 50/trip/day 8x3 4,800 4,416 Total Consulting Services 94,080 86,554 Other expenses (if any): 14 43,446 43,446 Workshops and Training - Approximately 300 participants - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops - Translation fees Total Workshops 43,446 43,446 5. North-East development strategy 210,728 200,000 Policy & technical specialists Fees: International 4 15,000 1 60,000 55,200 Local 5 4,000 2 40,000 36,800 Travel : Inter’l 4 3,200 1 12,800 11,776 Domestic 5 120 3 1,800 1,656 Subsistence: Inter’l 4 3,000 1 12,000 11,040 Domestic 5 50/trip/day 10 x 3 7,500 6,900 Total Consulting Services 134,100 123,372 Tabe 1: Proposed Budget Components Activities No. of Unit Rate Duration Costs Net Cost Cons. with 92% SDP (month only) (month only) USD USD Other expenses (if any): 76,628 76,628 Workshops and Training - Approximately 300 participants - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops - Translation fees Total Workshops 76,628 76,628 6. Project Implementation Unit 162,176 150,000 Policy & technical specialists Fees: Local 3 2,200 22 145,200 133,584 Auditing cost 1 3,500 2 7,000 6,440 Total Consulting Services 152,200 140,024 Other expenses (if any): 9,976 9,976 Workshops and Training - Approximately 300 participants - Cost of facilitieis (if any) about USD 25 per audience - Cost of material production for workshops 57 - Translation fees Total Workshops 9,976 9,976 TOTAL PROJECT COST 970,571 TOTAL REQUESTED ASEM II FUNDING 920,000 M. ESTIMATED DISBURSEMENT SCHEDULE Using the excel sheet disbursement form, attach a disbursement schedule. Table 2: Estimated Disbursment Schedule FY 03 Cost US$ XII. Quarter 3 10,000 XIII. Quarter 4 60,000 XIV. Total for FY 01 70,000 XV. FY 04 XVI. Quarter 1 90,000 XVII. Quarter 2 120,000 XVIII. Quarter 3 180,000 XIX. Quarter 4 150,000 XX. Total for FY 02 540,000 XXI. FY 05 XXII. Quarter 1 130,000 XXIII. Quarter 2 120,000 XXIV. Quarter 3 60,000 XXV. Total for FY 03 310,000 58 XXVI. XXVII. TOTAL TA COST 920,000