Greater Mekong Subregion Highway Expansion Phase 2 Project (RRP THA 41682) SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY Country: Thailand Project Title: Greater Mekong Subregion Highway Expansion Phase 2 Project Lending/Financing Project Department/ Southeast Asia Regional Modality: Division: Department/Southeast Asia Transport and Communications Division I. POVERTY AND SOCIAL ANALYSIS AND STRATEGY Targeting classification: General intervention A. Links to the National Poverty Reduction and Inclusive Growth Strategy and Country Partnership Strategy The proposed project is consistent with Strategy 2020 of the Asian Development Bank (ADB)a. The country operations business plan, 2017–2019 maintains consistency with the strategic direction and core program areas of the country partnership strategy, 2013–2016b, which remains valid until the forthcoming country partnership strategy, 2019–2023. Thailand has indicated an intention to resume sovereign borrowing from ADB. Strengthening national connectivity in poorer provinces to enhance access to social and economic opportunities in support of inclusive growth and regional integration is one of the priority policy agendas specified in the new 12th National Economic and Social Development Plan, 2017–2021c. The project is in line with the government’s development strategy to improve national connectivity throughout the country. B. Results from the Poverty and Social Analysis during PPTA or Due Diligence 1. Key poverty and social issues. Thailand’s economy grew at an average annual rate of 7% in the boom years of 1960– 1996 and 5% following the Asian financial crisis during 1999–2005, creating millions of jobs that helped pull millions of people out of poverty. Gains in multiple dimensions of welfare have been impressive, and poverty has declined substantially the past 30 years from 67% in 1986 to 7% in 2015. However, poverty and inequality continue to pose significant challenges, with vulnerabilities as a result of faltering economic growth, falling agricultural prices, and ongoing droughts. Poverty in Thailand is primarily a rural phenomenon. Provinces in the northeastern region of Thailand are among the poorest in the d country. The average gross domestic product per capita of the northeastern region in 2015 wa s $2,030, which is about 65% lower than the average gross domestic product per capita of the country, at $5,822 in 2015.e The development potential of the region is strong, as the East–West Economic Corridor could serve as a powerful engine for regional integration and inclusive economic growth.f Nevertheless, two crucial factors in the transport sector have been acknowledged: an inefficient highway network caused by inadequate road capacity, and poor road safety. 2. Beneficiaries. The expected beneficiaries are the poor, around 60% of which live in the northern region of the country. The local population will benefit from an improved road network and connectivity, leading to a general enhancement of their lives. Benefits to be derived from the project in the fields of better education and health services for the local population will be measured in terms of increases in incomes and decreases in poverty rates. The four provinces traversed by the two roads are Sakon Nakhon, Nakhon Phanom, Roi Et, and Yasothon. The total land area of the four project provinces is about 5% of the national land area and also 5% for population in 2016. Compared with the national population density of 132 persons per square kilometer, the lowest among the four provinces is in Sakon Nakhon with 117 persons per square kilometer, and the most densely populated is Roi Et at 158 persons per square kilometer. The main produce is rice except for Sakon Nakhon, which reports beef and cotton as the primary produce. Of the almost 5 million poor in Thailand,g 8% are from the four project provinces where the poverty line is much lower (B2,416 per person-month) compared with the national poverty line of B2,644. 3. Impact channels. Improved connectivity will stimulate increased investment and will provide the local population with more opportunity to find work and increase their incomes. In addition, upgrading of National Highways 22 and 23 will facilitate regional cooperation and integration by lowering barriers among countries. The economic rationale behind the upgrading of National Highways 22 and 23 is to improve connectivity within the northeastern region of Thailand and with the neighboring Lao People’s Democratic Republic (Lao PDR), the People’s Republic of China, and Viet Nam. One benefit of the project is the lower cost of freight traffic, which will reduce the price of goods consumed in the local market, improving the competitive advantage of local business. New economic activities in areas linked to National Highways 22 and 23 could create jobs for the poor. The preparation of resettlement and income recovery plans will involve project-affected people. 4. Other social and poverty issues. Poverty and inequality continue to pose significant challenges, with vulnerabilities as a result of faltering economic growth, falling agricultural prices, and ongoing droughts. The project indirectly addresses faltering economic growth and falling agricultural prices, but ongoing drought is beyond its scope. Other social and poverty issues include the need to improve the business regulatory environment, and education and skills. The project can address these indirectly. 5. Design features. Project impact is envisaged to enhance access to social and economic opportunities through the outcome of improved efficiency and safe movement of goods and people. II. PARTICIPATION AND EMPOWERING THE POOR 1. Participatory approaches and project activities. Meaningful consultations were conducted with the government and participating villages during project design, and will continue throughout project implementation. A grievance redress mechanism has been developed as a measure for stakeholder engagement during project implementation. 2 2. At project design, community-based organizations were part of the consultation process and their concerns were incorporated in finalizing the design. During implementation, their participation will also be sought, especially during monitoring regimes. 3. Civil society organizations. While civil society organization engagement is minimal during implementation, they are deemed crucial for ensuring that relevant and appropriate monitoring data are generated and analyzed. 4. The following forms of civil society organization participation are envisaged during project implementation, rated as high (H), medium (M), low (L), or not applicable (NA) L Information gathering and sharing L Consultation Collaboration Partnership 5. Participation plan. It is envisaged that civil society organization shall be minimal during implementation thus a participation plan is not necessary. Yes No III. GENDER AND DEVELOPMENT Gender mainstreaming category: No gender elements A. Key issues. Thai women generally have high status. They retain property rights and can own land. They have freedom of movement and work in many fields, enjoying many of the same rights as men. In 2013, Thailand ranked 89th out of 187 countries in the Gender Inequality Index.h While latent cultural and religious barriers may exist, the remarkable growth of the Thai economy since 2012i has provided women with increased income-earning opportunities.j In the four project provinces, 45% are in the labor forcek consistent with national figures. About half of the participants in consultation meetings were women, and their key concerns regarding the safety of children crossing the roads have been taken into consideration in the final design. Health statistics in the four provinces in 2012 indicate that HIV is the highest of the reported communicable diseases, at 4%. Upgrading of National Highways 22 and 23 during the construction and operation phases may increase risks to the local population of exposure to HIV/AIDS and trafficking of women and children, but these will be addressed through the gender strategy as incorporated in the resettlement plan. Gender issues are present in the sector at the national and local levels, but the project outcome is not expected to provide direct tangible benefits to women. However, indirect benefits could filter to women in the long term. B. Key actions. Gender action plan Other actions or measures No action or measure A gender strategy has been incorporated in the resettlement plan to address the plight of women as part of the vulnerable sector. IV. ADDRESSING SOCIAL SAFEGUARD ISSUES A. Involuntary Resettlement Safeguard Category: A B C FI 1. Key impacts. Economic displacement and losses in terms of secondary structures, crops, and use of productive lands are the project’s key impacts. 2. Strategy to address the impacts. A resettlement plan has been prepared to guide project implementation, with provisions on entitlements, largely assistance and no cash payments, as the roads have been under DOH ownership since 1967 for National Highway 22 and 1968 for National Highway 23. A grievance redress mechanism is incorporated in the resettlement plan. 3. Plan or other Actions. Resettlement plan Combined resettlement and indigenous peoples plan Resettlement framework Combined resettlement framework and indigenous peoples Environmental and social management system planning framework arrangement Social impact matrix No action B. Indigenous Peoples Safeguard Category: A B C FI 1. Key impacts. The project will not cover indigenous