Ramallo’s proposal met with success, and March 2003 will see the dedication of a shiny new building with accommodations for 120 live-in students.“It was a blessing to be able to build a school open to the whole community,” said Ramallo.

The projects financed by the FNDR, which during the last decade has been supported by a series of four IDB loans totaling $374 million, are part of an effort to stimulate decentralization at the local and regional levels in a nation where geography often reduces opportunities for people living far from the capital. Established in the early 1980s, the FNDR finances projects designed by the beneficiaries themselves. It is both a program for equalizing the distribution of national resources, and a tool to improve the ability of regional and municipal governments in management and planning.

Projects are financed in a wide range of areas, including education, health, sanitation, roads, electric power, rural telephone service, levees, and fisheries. Unlike many investments of ministries in health and education that focus on areas of greatest population density, the FNDR aims to reach communities that are remote or lacking in opportunities. 

Chile’s municipalities are responsible for making investments in areas such as education and health, for which they receive allotments from the central government. The FNDR finances projects that are additional to those supported by the ministries, explains Julio Ruíz Fernández, chief of the FNDR’s Regional Development Division. FNDR funds are distributed based on the national, regional or local priorities established by the national investment system run by the Planning Ministry. Individual localities and regions are free to propose projects that fit withing those general priorities.

One national priority, for example, concerns the gradual shift from half-day to full-day sessions in Chile’s public schools in response to a long-term educational reform agenda. In order to accommodate the larger number of students who remain in school for the whole day, each municipality is drafting proposals for new or expanded school facilities and submitting them to the Planning Ministry. 

The FNDR’s impact goes beyond improving the quality of life through better education and health services, says Julio Ángel, the IDB’s representative in Chile. “We often see people fleeing to the big cities from the small rural villages in search of opportunity, only to end up swelling the ranks of the poor,” says Ángel. “Today the magnet of the new poles of development established by the FNDR helps villagers discover that emigration is not the only alternative, that their home towns need them, that they offers them change and opportunity, and that they too can contribute,” he adds.

Guillermo Ramallo Arteaga Principal of Colbún High School in El Maule, Chile.