Conferences and decisions in 2005 have boosted development cooperation internationally. The Gleneagles G8 Summit, the New York Major Event and the Paris High-Level Forum on Har­monization, Alignment and Results, for instance, have given us optimism for the future.

Halving poverty and achieving the MDGs requires renewed efforts to reduce rural poverty. After rural poverty had been neglected by international development cooperation for the recent decade, this trend now seems to have been reversed.

Despite rapid urbanization, most poor people worldwide continue to live in rural areas. It will only be possible to achieve MDG 1 if the international community gives more attention and re­sources to rural poverty reduction. The reversal of the trend paves the way for IFAD to pursue innovative strategic alliances and cooperative endeavors at the international level, with bilateral donors and particularly with the World Bank and regional banks. We expressly encourage IFAD to make use of these opportunities.

All relatively small institutions must constantly explain what their comparative advantages are and what particular added value they can contribute in a given niche. These are expectations which IFAD, too, is facing. The challenge becomes bigger as other players become involved in the same field. IFAD therefore must succeed as a trendsetter, as a specialized organization which pursues innovative paths. It must rely on successful new models and pilot endeavors in development cooperation to convince other players (be they bilateral or multilateral and partner countries in particular) to replicate these models at the national level in a broad-based manner. Whoever acts as a pioneer and pursues new projects runs of course a certain risk of ending up in failures once in a while. IFAD should be encouraged to embark on new projects and programmes, but if this results in negative ex­perience, IFAD should not hesitate to share it with us frankly. Only in that way can both IFAD and the international donor community learn from that experience. IFAD's shareholders need to be aware of the fact that innovation involves risks. Accordingly, they must give IFAD's manage­ment the requisite support and space to experiment. We should also discuss whether innovative projects should be financed with grants more often. Of course, in that connection attention must also be given to possible impacts on IFAD's refinancing capacity.

We know from many talks with decision-makers at IFAD that the organization is highly receptive to these ideas. After the sobering findings of the external evaluation, IFAD is now facing up to the challenge of subjecting its work to a fundamental reform. This is no easy task, as it involves not only corrections of the business model and the improvement of programs' effectiveness but rather reorientation. However, from our point of view there is no alternative. IFAD must find its place in the new aid architecture.

We know that in this architecture, organizations' headquarters are rather the backyard of action, while the real action takes place on the ground in the coun­tries of operation. Since IFAD cannot be present on the spot everywhere, it needs partners to be part of PRS processes.

The seventh replenishment negotiations have almost come to an end, with a result which we consider respectable. The fact that the negotiations did not result in the volume which IFAD had wished for is not a vote of no confidence. The envisaged volume provides a sound basis for the current phase, with prospects for IFAD to demonstrate its success as a reformed specialized organization. This will undoubtedly have a positive effect on future replenishments.

However, IFAD has clearly not yet succeeded in bringing about more equitable burden-sharing between lists A and B. This is not understandable – after all, we live in times that are similar to the situa­tion when IFAD was founded: windfall profits of oil-producing countries call now as they did in the 70s for creative mechanisms to channel at least some of the revenue to the productive sector in poor countries so as to benefit the most needy in rural areas. In conclusion, I would therefore like to make an appeal to all those present to give IFAD the support it needs, es­pecially in this period of reform.