6 September 2001

Dear Governor,

As we prepare for our next Governing Council, which will be my first as President of IFAD, I thought that I would share some thoughts with you on the format of the Governing Council that I hope will make our meetings more interesting and relevant. The dates for our next Governing Council have been set for 20-21 February 2002 in Rome, and the Secretary will be writing to you separately with regard to the specific details.

Last September at the Millennium Summit, world leaders agreed on the goal to halve, by the year 2015, the proportion of the world’s people whose income is less than one dollar a day. This commitment has created a new context in which many multilateral institutions and donor countries are giving a reinforced priority to poverty reduction. For IFAD, which has long focused on poverty, there are now new opportunities, and a corresponding responsibility, to play a stronger catalytic role to promote poverty reduction and help achieve the Millennium Summit goal.

The Rural Poverty Report, which the Fund brought out earlier this year, highlighted that the current rate of poverty reduction is much lower than the rate required to achieve the Millennium Summit poverty goal, particularly in sub-Saharan Africa. The Report further emphasised that three-quarters of the world’s poor live in rural areas, depending on agriculture and related activities for their livelihood. Thus if we want to achieve the Millennium Summit goal, it is essential to raise substantially the pace of rural and agricultural development. Yet unfortunately, external assistance to agriculture has fallen sharply over the last decade.

Achieving the Millennium Summit goal will require greater resources both in terms of external development assistance and domestic investment, especially in the rural sector. In this regard, I believe it would be timely for our Governing Council to take as its overall theme, “Financing Development – the Rural Dimension”. Our deliberations on this theme will have a strong linkage with discussions in other forums and I hope, also help shape their outcome.

The Conference on Financing for Development which will be held in Mexico, in March, just one month after the Council is especially important in this context. The Mexico Conference will provide a major opportunity to review the funding requirements of the Millennium Summit goals and we need to ensure that the resource requirements of the rural sector receive appropriate attention in these discussions.

During the Governing Council, we intend to organise an interactive policy discussion in the Plenary, with the support of a panel of high-level development experts. I hope this innovation will provide an opportunity for Governors to engage in a substantive dialogue on the theme of Financing Development – The Rural Dimension.

We also envisage holding round-table discussions on specific regions and topics. The former could draw on the regional strategies that IFAD is developing, while the latter discussions could focus on topics such as microfinance and land reform that can play a critical role in poverty reduction.

I hope that these suggestions will meet with your approval and I would ask you to focus on the theme of Financing Development - the Rural Dimension in your statement to the Governing Council. I look forward to your reactions to our suggestions in our shared effort to make IFAD and its governing bodies, even more effective in the cause of promoting development and eradicating poverty.

Yours sincerely,

Lennart Båge

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