Focusing the development efforts on the very poorest and most backward regions will often result in a more expensive investment with lower economic gains and impact. Investment funds spent on the project could have had a much broader and wider impact if invested in a region with greater development potential. There are regions that are better off with development funding through social assistance and/or transfer payments to ease the poverty situation than investment projects. The latter would be a less technically and economically practical option. During project preparation and conceptualization, sufficient analysis of funding options and an alternative development strategy permit effective use of funds in helping the poorest regions with lesser economic comparative advantage.
Qinghai Rural Water Resources Management Project