February 19-20, 2003

Mr. Chairman,
Mr. Secretary General,
Your Excellencies,
Distinguished Governors,
Ladies and Gentlemen,

Celebrating IFAD´s 25th anniversary, this annual meeting is an occasion for looking back but even more an opportunity to look at the major challenges ahead.

IFAD´s experience has shown that the most important fight, that against poverty, is feasible. This gives us confidence, particularly in this time of uncertainty and fragile peace.

Even though we are far from having reached everything we hoped to achieve, at least the worst forecasts of the 1970s – when IFAD was founded – did not materialize:

• It turned out that the quality of growth can be influenced with improved energy and re-source efficiency.
• renewable energy sources have become attractive even from a business point of view.
• The nationwide famines in Asia's large countries are a threat of the past.
• Several poor countries are now considered emerging markets.
• There are many countries where the end of exponential popu-lation growth is in sight, while life expectancy is constantly growing.

However, there is no reason for complacency. We bear global responsibility, and global players need to demonstrate solidarity with those countries and people who lack natural resources or whose economies are still weak.

It was the awareness by industrialized and OPEC countries of their global responsibility that led to the creation of IFAD.

The international community is committed to the development goals of the Millennium Summit and to the guiding principle of sustainable development reaffirmed in Johannesburg.

The goals: halving the number of people in extreme poverty by 2015, and achieving sustainable growth, are "inseparable twins," as you, Mr President, put it in Johannesburg. You confronted us all with the fact that 900 million of the world's 1.2 billion people in extreme poverty live in rural regions - and that many of them belong to minority groups. Finding a brighter future for them - and together with them, and with women in particular - requires our solidarity. It is a prerequisite for sustainable growth but also for social and political stability. It constitutes a stepping stone to secure peace.

Rural development, while targeting the rural poor, has become the prime task of IFAD. The Fund should concentrate on the rural poor, as a leading international development agency in this very difficult field. IFAD´s task can and should support land reforms. However, in several countries the political environment is not yet conducive to this.

The provision of IFAD with financial resources can still be improved: The target of the sixth replenishment will hardly be enough for IFAD to meet the expectations placed upon it. We need to raise at least $560 million. Germany is willing to contribute a fair share of that. Subject to our parliament's approval, we have envis-aged an in-crease in our contribution by a third to 40 million US dollars. I hope all those undecided during the negotiations will make a fair contri-bution, too. In 2002, Germany also provided funds in trust to IFAD (amounting to US $ 4 million) – and we will do our best to continue to strengthen IFAD through trust funds.

All calculations made during the replenishment were overshadowed by IFAD's share of HIPC cost looming overhead. Germany allocated US $ 7 million from its HIPC trust fund contribution to IFAD and a small number of other countries have done the same. Since that is not enough, we advocate letting IFAD participate in the general HIPC trust fund.

IFAD must play the role of a small but beautiful institution: The activities it finances and supports should serve as models and good examples for others, larger institutions and governments. The positive ex-perience gained in IFAD should be applied – and I would like to address this particularly to the representatives of the large financing institu-tions and LDC governments.

IFAD can make a significant contribution towards reaching the Millennium Goals. To that end, it will also require

generous and far-sighted support from List B members,

• new members for List A, for instance from the group of countries preparing for EU accession,
• and an increase in the support from List C countries, which is al-ready at a significant level.
• We are hoping that countries with emerging markets or with dynamic economic growth will shoulder even more responsibility.

Co-financing with IFAD is another important instrument for using IFAD's competence with a multiplier effect. Germany has contributed almost a fifth of all bilateral co-financing to IFAD. Since our experience has been very good, we will continue this close cooperation.

We welcome that IFAD is now an executing agency of the Global Environment Fa-cility and wants to devote more attention to the problem of land degradation. In many countries, the price for increasing agricultural production has been land degradation, dramatic losses of farmland and pastures and of natural resources. It is not only the very poor in rural regions who are particularly affected by this loss; this also erodes the eco-nomic backbone of entire countries and their ability to prepare for the future. We need to jointly stop this process and reverse the trend.

What countries promised at the World Summit, will - after some four to five years - have to be reflected in poli-cies that facilitate pro-poor growth and sustainable development. If countries fail to strive for such policies, even IFAD's committed work will achieve little. Hence we need a performance-based allocation system – a modernized IFAD and a very pragmatic one. But pragmatic cannot mean that consequences should be ruled out.

Vital for performance are successful PRSP processes. This implies a broad dialogue, including civil society and the private sector, and close coordination among development agencies. IFAD needs to participate, and therefore needs an effective presence in the field, at least in focal countries. A mutually supportive division of labour with other organizations of the UN system, and in particular the Rome-based organizations, should enable the Fund to establish such a presence in PRSP countries.

Committed to the Monterrey partnership approach, Germany regards it as an EU obligation that the Doha trade round give developing countries better market access for their agricultural products. But the globalization of agricultural trade must also foster sustainable development. New export opportunities must be compatible with social and ecological needs. When the negative impact of subsidized imports on local agricultural mar-kets decreases, new opportunities arise for local producers. Helping them to seize new opportunities in domestic and export markets – these are important tasks for IFAD and mean better prospects for all of us.