Bolivia/WB: More than three million rural poor will benefit from two projects supporting rural development

August 22, 2011

La Paz, August 22, 2011.- In a festive atmosphere with the presence of hundreds of Aymara and Quechua peasants, who will be the direct beneficiaries of the event, two credits were signed for the country’s rural areas.  The first, for US$40 million, is for the Community Investment in Rural areas Project (PICAR) which will benefit 100 thousand poor peasants, the majority indigenous, in a direct way.  The second, for $US39 million, will serve to finance the Agricultural Innovation and Services Project (PISA) which will favour three million Bolivians in rural areas.

The signing of both credits was led by Susan Goldmark, Country Director for Bolivia, Chile, Ecuador, Peru and Venezuela representing the World Bank and the Minister of Development Planning, Viviana Caro, representing the Bolivian Government.  Both representatives agreed on the importance of implementing these projects in which the beneficiaries themselves participate in the project management.

"I have signed many credits over my professional life but this is the first time that the beneficiaries are involved from the start, which is extraordinary” said Susan Goldmark.  Viviana Caro aiming her words at the peasants in attendance stated:  “These projects are ones that you have requested and that have been given based on your own social organizations and communities, therefore you have a great responsibility towards them”.

Both PISA and PICAR were prepared based on the demands of the country’s rural sector and with broad based consultations.

 “We thank the World Bank for this financing that will be used in favor of peasant organisations.  As the Ministry of Rural Development we want to guarantee the food security of our population” affirmed the Minister of Rural Development, Nemecia Achacollo.

On the occasion Goldmark reiterated the support of the World Bank towards the Bolivian Government’s development agenda, highlighting that “we are strengthening the partnership strategy which in 2006 was complemented by the forgiving of around US$1500 million of Bolivia’s debt, allowing for the expansion of our portfolio which currently includes 13 active projects, amounting to almost US$450 million…Today we continue working together to secure our relationship through the development of a new Country Partnership Strategy which will allow us to consolidate ourselves as partners”.

Through strengthening the capacity of the National Agricultural and Forestry Innovation Institute (INIAF), reinforcing technical assistance programs to producers (availability of new technologies), and investing in the collection and preservation of genetic resources (seeds), PISA aims to enhance the income generation of Bolivian families that depend on agricultural and forestry activities.  The financing of this project totals US$52 million (US$39 million from the World bank, US$9 million from the Bolivian Government, US$2.6 million from the Swiss Government and US$2.3 million from the Danish Government).

Moreover, PICAR will contribute to improving access to infrastructure and sustainable basic services in the country’s poorest and most vulnerable areas.  It will work in the most disadvantaged rural communities in 51 of the poorest municipalities in La Paz, Oruro, Chuquisaca and Cochabamba.  These communities will identify, prepare, implement and sustain development subprojects that respond to their priorities based on the development approach administered by them themselves.  It is hoped that the majority of the community initiatives will be oriented towards strengthening access to water, be it for human consumption or for agricultural use, and the reduction of vulnerability.

PICAR, whose total financing will be US$43 million (US$40 million from the World Bank and US$3 million from the communities), will be the first large scale operation in Bolivia that uses the direct transfer of investment funds to the rural communities for their own management.  Furthermore, the communities could benefit from a second project as long as it is identified by their women.

33 percent of the country’s total population lives in rural areas, often with low standards of living.  The 2008 World Development Report (World Bank) estimates that 80 percent of the rural population live below the poverty line of US$1.25 per day, and that 64 percent live in extreme poverty.  Access to basic services such as drinking water, electricity, education and health services are often very low.

The agricultural sector employs 90 percent of the economically active rural population.  The sector contributes between 13% (primary agriculture) and 27% towards annual GDP (including agro-industry).  Whilst this contribution to GDP is double the Latin American average, the returns are significantly lower than in neighbouring countries (near to half).

The World Bank recognises the importance of rural and agricultural development in reducing rural poverty and in improving national food security, two important challenges for this county.



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