Mr. Chairman
Excellencies
Ladies and Gentlemen

I would like to begin by thanking IFAD President, Mr. Båge, for inviting me once again, in my capacity as Director-General of the OPEC Fund for International Development (OFID), to address the inaugural plenary here at this thirtieth session of IFAD’s Governing Council.  It is an honor and a privilege to share the podium with such illustrious speakers as Prime Minister Diogo of Mozambique, a country with whom OFID enjoys long-standing cooperation, and HE Mr. Al-Attiyah, Secretary-General of the GCC.  Both OFID and IFAD have much to be grateful for with regard to the GCC countries. I take this opportunity to acknowledge their generosity and support.

It is a particular pleasure to be here at IFAD, one of OFID’s key partners and an organization with whom we share much more than just common ideals and goals.  Our two institutions also have common roots, as indeed many of you may know.  OFID’s founders, the Member States of OPEC, are the very same countries that were instrumental in the establishment of IFAD.  These shared beginnings – OFID in 1976 and IFAD in 1977 – have underpinned a unique relationship that, today, goes far beyond mere financial cooperation.    

Ladies and Gentlemen

The theme of this Council meeting is Rural employment and livelihoods, a topic that will no doubt be covered in depth at the various round-table discussions.  What I would like to focus on in this speech are some of the key challenges that we currently face in relation to rural development.  First, though, a few words on OFID and its position vis-á-vis the rural sector.

Like IFAD and other institutions involved in development cooperation, OFID’s overarching objective is the alleviation of poverty.  It is an objective to be achieved, we believe, not through a simple redistribution of income, but as a result of genuine growth. Poverty, as we all know, is predominantly a rural phenomenon. Rural development, therefore, with its potential to generate employment and raise living standards, should be a key priority in the development plans of the poor countries and in the strategies of donor organizations.

OFID’s mandate requires it to tackle need where it is most severely felt.  It should thus come as no surprise that the bulk of OFID’s development assistance – which cumulatively exceeds US$8.6 billion – has gone to rural areas.  In addition to direct support to agriculture, we have invested heavily in rural infrastructure and in projects that promote private enterprise development both on- and off-farm.  OFID financing has been given as soft loans, as outright grants and also through our private sector window. Hand-in-hand with the financial resources we provide is our support to the formulation of policy frameworks that complement and strengthen our efforts to promote sustainable development. 

In recent years, as a result of the international community’s commitment to the Millennium Development Goals, the focus on rural development has gained even greater recognition. The link between rural poverty and attainment of the MDGs is self evident.  Already, we are seeing progress towards the poverty and hunger goals in regions where investment in agriculture has increased.  Where such investment has lagged behind, so too has progress.  It has become clear that if the MDGs’ primary goal of halving the proportion of people living in poverty by 2015 is to be met, our continued focus on addressing the needs of the rural poor is an absolute necessity.  It would certainly help our cause if the G-7 nations accorded as much importance to the MDGs on their agenda as they do to issues like global warming, energy security and debt relief.

Ladies and Gentlemen

The developing countries face numerous challenges in relation to rural development. Three in particular are worthy of attention. Firstly, how to increase the effectiveness of aid delivery to the rural sector. Secondly, how to ensure that the rural poor are not further disenfranchised by the forces of liberalization and globalization. And lastly, how to adapt farming practices to overcome the obstacles presented by environmental influences.

The first topic refers, of course, to the issue of sustainability.  To be effective, aid must have an impact that is enduring.  So, while investment in infrastructure improvement is vital, equally important is the capacity strengthening and institution building that will guarantee not just the longevity of the infrastructure, but its efficient management as well. 

For example, when we invest in rural roads or electrification, or in irrigation schemes, we must ensure that the relevant authorities have the knowledge, training and institutional capacity to operate, maintain and manage the new investments well into the future.  This is development that is truly sustainable.  It is also an approach that makes optimal use of resources, which as we all know, are nowhere near adequate enough for the task in hand.

The second issue I wish to highlight – that of liberalization and globalization – is somewhat more complex.  While it is generally agreed that, on the whole, these two phenomena present exciting opportunities for developing countries, there are genuine concerns that there could be serious consequences for rural populations. 

Indeed, this very concern was raised recently in a conversation I had with  President Al-Bashir of the Sudan, who warned that the market forces unleashed by liberalization and globalization have the potential to marginalize rural areas still further.  While the rich get richer, he said, the poor get poorer, and the economic gap between urban and rural populations grows ever wider. 

As partners in the development process, governments and aid institutions alike have to remain wary of the less desirable outcomes of market-led growth.  We have a responsibility to ensure that any deepening disparities caused by market-oriented development be corrected by pro-poor development policies, such as greater investment in social services and public infrastructure, especially in rural areas.  This has to be our overriding concern.

A third – and perhaps the toughest – challenge standing in the way of rural development relates to the environment.  Climate change has made a hard life even harder for the rural poor.  Floods, drought, desertification and soil degradation all have a direct impact on agricultural productivity and, consequently on the living standards of farming communities in developing regions worldwide.  For these people, the agricultural way of life – the only life they know – has to be preserved, and this means finding ways, not only to combat climate change, but to adapt to it as well. 

A large part of this burden falls on the researchers and scientists, whose work revolves around developing hardier varieties of seeds and livestock, together with innovative farming methods that respond specifically to the needs of the rural poor. 

Intensified support is thus imperative to organizations like the CGIAR (Consultative Group on International Agricultural Research), the AOAD (Arab Organization for Agricultural Development) and ICBA (International Center for Biosaline Agriculture), to name just a few.  I had the honor of meeting earlier this week with Dr. Mahmoud Solh, the Director-General of ICARDA, one of the CGIAR’s most active members, and was pleased to discuss with him ways and means of strengthening our cooperation.  Support is equally important to the activities of the Global Mechanism of the United Nations to Combat Desertification.  All of these bodies are doing sterling work and OFID, for one, is fully committed to furthering their efforts.

Mr. Chairman
Ladies and Gentlemen

We are all here today because of our commitment to rural development.  And we remain committed despite the enormous challenges. These are challenges that the rural poor cannot tackle alone.  As responsible global citizens, they are our challenges too.  So, if we are to succeed in stemming the flow of people from the countryside to the cities and halting the erosion of rural economies, we need to focus on empowerment; on providing the tools and creating the environment that will allow the rural poor not only to maintain their way of life, but to prosper.  The foundations for this lie in participation, cooperation and partnership.  

Mr. Chairman

On the subject of partnership, I would like, before closing, to say a few more words about OFID’s cooperation with IFAD.  Over a period of 30 years, we have pooled experience, knowledge and resources. We have implemented over 60 projects together, and there are many more in the pipeline.  While this relationship has always been strong, in the past 12 months it has been moving towards new horizons.  As well as increased dialogue, both at policy and technical levels, our co-financing activities have grown substantially, not only in terms of the number of joint operations, but also in terms of OFID’s share in each financing package. 

I should point out, however, that OFID’s resources are limited and that we can only work within our means.  It is our singular objective to use these resources as wisely as possible, and this aim forms the basis of our 17th Lending Program, which is currently being formulated.  The program launches on January 1, 2008, and will seek to expand both the quantity and quality of OFID aid.

Finally, I would like to take this opportunity to highlight my personal appreciation of Mr. Båge, IFAD President, for the genuine interest he has shown in OFID and its work.  We were particularly grateful last year, for his active participation in the High Level Roundtable on Arab Development which was organized and hosted by OFID at its headquarters in Vienna.

We welcome this strengthening of ties between our two institutions and look forward to many more years of fruitful collaboration.

Thank you.