Madam Chairperson,
Excellencies,
Distinguished delegates and guests,
Ladies and gentlemen,

On behalf of the Management and staff of IFAD, it is my honour and pleasure to welcome you all to Rome, to our headquarters, and to the thirty-third session of the Governing Council.

First, allow me to re-iterate my gratitude to His Excellency President Napolitano of Italy and the Honourable Mizengo Peter Pinda, Prime Minister of the United Republic of Tanzania, for honouring us with their presence today. This is a clear demonstration of support for IFAD and of confidence in our work, which we appreciate greatly.

I also am very happy to have with us today our close friends and partners from the Rome-based United Nations agencies – the Food and Agriculture Organization and the World Food Programme. Dr Jacques Diouf, Director-General of FAO will address the Council and Mr Amir Mahmoud Abdulla, Deputy Executive Director and Chief Operating Officer of WFP, will deliver a message on behalf of Ms Josette Sheeran, the Executive Director. Your presence here today is a symbol of the strong ties among our agencies.

We are also pleased to have with us a number of special guests who will take part in our plenary panel discussion this afternoon. In addition to the Honourable Mizengo Peter Pinda, I would like to welcome Ms Haydée Castillo, Professor Sir Gordon Conway, Dr Nahed Mohammed Taher, Mr Ajay Vashee and CNN’s Jim Clancy, who will be moderating the panel. We thank you for making time in your busy schedules to be here with us today and we look forward to your interventions and contributions.

As you know, this is the first Governing Council to be held on the premises of IFAD. We are delighted that you will be sharing our new headquarters with us – if only for a few days.

IFAD and Haiti

Madam Chairperson,
Distinguished delegates,

Before I present my report on our achievements in 2009, our plans for 2010, and our vision on the way forward for IFAD, permit me to say a few words about Haiti.

What the people of Haiti have suffered has shocked us all. The number of people who have died is now estimated at over a quarter of a million. The scale of the devastation to the infrastructure and productive capacity of this poor nation is simply beyond belief.

The international community must stand as one with the people of Haiti and give them the support they so desperately need to recover from this calamity. Here in Rome, just last Friday, the three Rome-based agencies formed a task force to deliver coordinated assistance to the country. We praise the efforts of the governments of Haiti, Brazil and the United States of America in convening the meeting that allowed us to launch this initiative.

For our part, we are taking a number of urgent steps to give Haiti our maximum support. Following a fact-finding mission, we have identified four areas for action.

• First, we are stepping up work under ongoing projects in Haiti’s rural areas, focusing on food production and activities to generate income and employment.
• Second, in collaboration with FAO, we have extended our 2008 post-food crisis programme for the distribution of seeds and farming tools, thereby preparing about 15,000 rural households for the planting season that begins now in March.
• Third, we have given a grant of US$3.2 million to fund post-earthquake rehabilitation, strengthen food security and create jobs. This will boost food production by restoring Haiti’s productive infrastructure and providing agricultural inputs. Support will be targeted at the areas most severely affected by the earthquake and by the flow of urban migrants to rural areas.
• And fourth, we are hosting a side event today, during the Governing Council, to explore with our Members modalities for managing Haiti’s debt to IFAD. This is currently estimated at US$58 million and is expected to reach US$78 million over the life of active loans.

In our various interventions in support of the people of Haiti, we are focusing our assistance on the most vulnerable groups: women, households headed solely by women, and young people. We are also working with our partners to ensure that our combined efforts are coordinated and consistent, and so achieve maximum effec

IFAD’s operational achievements in 2009

Madam Chairperson,
Distinguished delegates,

A year ago, you honoured me with your trust and confidence by electing me as the fifth President of IFAD. In accepting this appointment, I pledged to you that I would be a tireless advocate of poor rural people and that I would do everything in my power to make agriculture and food security the central concern of governments around the world.

I also pledged to continue to build on IFAD’s reform agenda to ensure that our institution becomes more efficient, effective and agile.

I am pleased to report to you today that we are making significant progress on all these fronts. Permit me to highlight the main achievements.

In the past year, we have striven to put the challenge of rural development on the global agenda. I am gratified that, in the context of these efforts, we were also able to raise IFAD’s profile as a key player in global food security issues.

We stepped up our communications efforts, attracting the attention of both national and international media – print, radio and television. Today, IFAD is much better known, here in Rome and beyond!

We have gone further:

• With the strong support of the Italian G8 Presidency, IFAD took part in important G8 meetings in 2009, culminating in the G8 Summit in L’Aquila where, as you know, the L’Aquila Food Security Initiative was adopted.
• We supported the FAO World Summit on Food Security in November and financed the participation of civil society organizations so that smallholders could contribute to the debate.
• We sponsored the Agriculture and Rural Development Day at the 15th Conference of the Parties (COP15) to the United Nations Framework Convention on Climate Change in Copenhagen. The event focused on the vital role that smallholders must play in climate change adaptation and mitigation.
• We also took advantage of IFAD’s participation in various conferences and symposia to highlight the key role that smallholders play in strengthening global food security. At the regional meetings of the World Economic Forum at the Dead Sea and in Cape Town and then in Davos earlier this year – where IFAD was represented for the first time – I stressed that agriculture must be seen as a “business”, whatever its size. I repeated this message only a few days ago at the Jeddah Economic Forum. And I stressed that both public and private-sector initiatives and support must be anchored in this context.
• Lastly, I was privileged to visit a number of your countries in the course of 2009 and to interact with national leaders and national and international media on the challenge of rural development. I was pleased to see first-hand the development work that we finance – from support to family farms in Brazil, to land and water conservation in Jordan, to post-conflict rehabilitation in Côte d’Ivoire, support to women’s groups in India, and active engagement in post-earthquake rehabilitation in China.
• From the leaders of the developing world, particularly in Africa, I have called for commitment and action: for political engagement at the highest level; for investment of political will; and for demonstrated financial commitment, however small. From the leaders of the OECD countries, I have called for accountability in commitments and respect for the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action. And from the leaders of the OPEC countries, I have called for greater engagement in the efforts to build global food security. We shall be tireless in our efforts.
• On my visits to your countries and in the discussions I have had at all levels, it was gratifying for me to note how much IFAD’s work is appreciated. I would like to assure you that we will continue to listen to and learn from our clients and beneficiaries, as the knowledge that we gain is a fundamental strength of our corporate culture.

In terms of our overall lending and grant operations, I am pleased to report that with the Executive Board’s approval of loans and grants totalling US$717.2 million in 2009, we have successfully completed our commitments under IFAD VII.

I take this opportunity to thank the Executive Board, Management and staff, for their hard work in delivering the ambitious 2009 programme of work, which grew by a significant 19 per cent over the previous year.

In addition to expanding our programme of work:

• We continued to raise the quality of the projects we fund through our Quality Enhancement and Quality Assurance processes, while maintaining their essential character as operations owned by our Member States and developed and implemented with our assistance. I am pleased to note, in this regard, the continued improvement in the relevance, effectiveness and sustainability of the projects we support, as reported by our independent Office of Evaluation.
• We have continued to innovate – an increasing number of projects are adopting a value chain approach both to increase their impact and to ensure their sustainability over time.
• Women remain a primary target of our country programmes and projects and I have gladly accepted last October the MDG3 Gender Torch from Minister Ulla Tornaes, of Denmark and committed to do something extra. Internally, at IFAD, gender equality at the workplace is not just words – 75 percent of recently recruited professional staff in the Office of the President and Vice President are women, including the Vice President and the Director of the Office.
• We have put in place a new operating model, with IFAD taking direct responsibility for the supervision of the projects we finance and providing project implementation support. We are already seeing that this allows us not only to strengthen project management, but also to enhance our development effectiveness.
• An important development in this respect is the expansion of our country presence. In 2009, the number of country offices reached 27, covering 31 countries. These offices strengthen our support to project implementation and deepen our policy dialogue with the countries where we work. With the kind support of the United Nations Development Programme I am pleased to report that we have now put in place the required administrative framework to proceed with further expansion. 
• We have strengthened our partnerships with both bilateral and multilateral institutions, enabling us to leverage our resources through co-financing arrangements, which reached over US$300 million in 2009. Just this weekend, I signed a US$1.5 billion framework agreement with the Islamic Development Bank to enable us to jointly finance programmes and projects in countries where we both have operations.
• We have also worked hard to strengthen our partnerships with our two sister agencies in Rome – FAO and WFP. In 2009, the Italian G8 Presidency provided the three Rome-based agencies with a powerful political platform from which to put agriculture and smallholders back on the global agenda, together with the central role we play in Rome as the global hub for food, agriculture and nutrition. The heads and senior management of the three institutions now hold regular meetings. As a result, we have moved ahead with joint programme and project planning and implementation. And we are in the process of implementing a pilot US$100 million joint procurement plan. In addition, we have increased collaboration between the FAO Investment Centre and IFAD.
• And finally, I am pleased to report that we have continued the prudent management of IFAD’s financial resources with good results. In 2009, our investment portfolio had a rate of return of 4.4 per cent, well above its policy target return of 3.5 per cent, despite the financial crisis and the turmoil in the capital markets.

IFAD reforms in 2009

Madam Chairperson,
Distinguished Delegates,

While giving top priority to the operations we support in our Member States, we have not neglected the importance of pursuing IFAD’s own internal reform agenda.

We have taken the following measures:

• We have reconfigured IFAD’s Management and the reporting arrangements, to strengthen and streamline our decision-making processes, and to make them more transparent, within a clear accountability framework.
• We have established the Executive Management Committee (EMC), chaired by me and consisting of IFAD’s most senior management staff, and the Operations Management Committee (OMC), chaired by the Vice-President and responsible for coordinating and taking decisions on routine operational matters.
• In this connection, it is my pleasure to introduce to you the new Vice-President of IFAD, Ms Yukiko Omura, a native of Japan, who has extensive experience in international management and finance. Most recently, she was Executive Vice-President of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank.
• Based on my own experience for two years as Vice-President of IFAD, Ms Omura will have clear corporate responsibilities and line functions. I have asked her to assume a leadership role for human resources management, strategic planning and budgeting, resource mobilization and the development of our new strategic framework. In addition, Ms Omura and I will champion the reform agenda of IFAD.
• As part of the reconfiguration, we have also established the Office of the Chief Development Strategist. This will give IFAD the analytical capacity to engage in the global debate on rural development. This office will also ensure that the programmes and projects we support are informed by state-of-the-art thinking. Pending the recruitment of the long-term Chief Development Strategist, I have asked Mr Henock Kifle, the former Chief Economist of the African Development Bank, to help us establish the Office by assuming the post for one year.
• I would like to mention two other key initiatives in our reform agenda: first, we are preparing, for the first time in the history of IFAD, a Corporate Medium Term Plan that will coincide with the IFAD VIII period, together with a zero-based budget for 2011 – in which budget lines are reviewed anew instead of relating them to previous allocations. This is another first for IFAD. The plan and the budget will ensure that our resources are clearly aligned with our strategic objectives.
• Second, we continue to work on reforming our human resources (HR) management system. We are revising our staff rules; we have started to prepare a strategic workforce plan in conjunction with the medium-term plan; and we will soon launch a comprehensive review of the salaries and benefits system to assess the costs and benefits of staying within the United Nations system, guided by the International Civil Service Commission (ICSC).

IFAD plans for 2010

Madam Chairperson,
Distinguished Delegates,

Let me now turn to our plans for 2010. As you are all aware, 2010 is the first year for the implementation of the Eighth Replenishment of IFAD. In this regard, I am pleased to announce that the Eighth Replenishment became effective on 1 December 2009. I would also like to take this opportunity to thank Member States for their pledges and to urge those countries that have yet to announce their contribution to do so as soon as possible.

Over the next three years – during the course of IFAD VIII – we expect to deliver a programme of work of some US$3 billion, 50 per cent more than that delivered during IFAD VII. During 2010, we must lay solid organizational foundations to support the delivery of this significantly larger programme of work. I am confident that we will be able to do so.

Critically, we must ensure that IFAD’s human and financial resources are deployed strategically in support of the objectives of the Eighth Replenishment. The medium-term plan that we are preparing, the strategic workforce plan, the zero-based budget for 2011 and the HR reforms are all key instruments that will enable IFAD to achieve a higher level of efficiency and effectiveness, ensuring the full delivery of IFAD VIII.

Along with our own expanded programme of work, we are also working closely with our partners to implement the L’Aquila Food Security Initiative. In this connection, we look forward to working with the World Bank and FAO in making the Global Agricultural and Food Security Programme (GAFSP) fully operational. An important aspect of our work will be the technical assistance that we provide to our developing Member Countries to enable them to take full advantage of the potential of rural development, as they plan and implement their national food security programmes.

In 2010 we will continue to implement our new operating model and we expect to effectively take over full responsibility for the supervision and portfolio support services for about 90 per cent of the projects we support. We will also continue to expand our country presence and expect to have a total of 30 country offices by the end of 2010. Twelve of our country programme managers will also be outposted.

Under the leadership of Vice-President Yukiko Omura, we will also develop a comprehensive resource mobilization strategy that identifies creative and innovative ways to address IFAD’s needs over the long term. The strategy will be shared with the Executive Board at the same time as we present our new strategy for engagement with middle-income countries. An important element of the resource mobilization strategy will be to outline a more strategic partnership with the financing institutions of OECD and OPEC countries – along the lines of the recent framework agreement with the Islamic Development Bank – as well as with other agencies, both private and public.

In 2010, we will also continue to strengthen our engagement in international debates and policy dialogue on rural poverty. An important milestone in this regard will be the publication of the Rural Poverty Report. We will also start work to regularly disseminate information on the state of global and regional rural poverty and emerging challenges.

And finally in 2010, I would like to assure you that we will push through our HR reform agenda to ensure that we deploy our most important resource – our staff – strategically and in an optimal way. We will also be making changes to our delegation of authority matrix to empower our managers and staff and to encourage them to be innovative, flexible and responsive to the needs of our clients.

Developing our vision for the future

Madam Chairperson,
Distinguished delegates,

By the end of 2010, Management will present a new strategic framework for IFAD to guide our work during 2011-2013. With the launch of IFAD VIII this year, it is an opportune time to examine what has worked, and what has not, and to determine how best to approach the many challenges faced by rural smallholders and, by extension, IFAD, as we move into the second decade of the new century.

It is also an opportune time to re-examine the approach we have adopted in the last few years in many of our newer projects – that of value chains – to learn key lessons and to assess its potential role for our future support.

As I have argued in various forums, I believe our new strategic framework should be underpinned by a view of farming – whatever its size and whatever its scale – as a business with clear business linkages along the value chain from production to processing, marketing, and ultimately to consumption. This view implies encouraging entrepreneurs – both small and large-scale – to invest in the entire rural economy and forge strong economic relations between the rural and urban economies.

Creating a vibrant rural economy and reducing poverty therefore depends on creating the right business environment. Successful policies will encourage both the public and private sectors to promote technological innovation, they will strengthen investment in infrastructure, including competitive markets, encourage the production of goods and services needed by the rural economy, as well as the goods produced within it. And successful policies will ensure that the necessary financial services are accessible to poor rural people. This is the only way that we can develop thriving and sustainable rural economies.

Our vision must also encompass a thorough understanding of the demography of rural populations in developing countries, where over 60 per cent of the people are between the ages of 15 and 25, and half of them, obviously, are young women and girls. Our vision must aim at making farming profitable so that young men and women in rural areas do not turn away from it, and so that women farmers in particular make a decent and profitable living for themselves and their families.

With a projected world population of 7.5 billion in 2030 and 9.1 billion in 2050, who will feed the world if we do not support a radical paradigm shift that seeks to make agriculture and farming profitable and attractive businesses? Clearly such a shift requires us to focus our energy increasingly on young farmers and entrepreneurs and on women who work in agriculture, markets and services. We must encourage them to develop their entrepreneurial spirit and give them the support they need so that they can indeed become the business leaders of tomorrow.

The challenges for the future

Madam Chairperson,
Distinguished delegates,

As we lay the groundwork for IFAD VIII and seek to make IFAD a bigger player in addressing food security issues, we are aware that we face a number of challenges.

The food crisis of 2008 and 2009, although somewhat abated in recent months, is nonetheless a reminder of the fragile underpinnings of global food security. It is indeed possible that the crisis could surface once again.

The challenge of climate change will continue to be with us, a constant reminder that we must find new and creative ways both to mitigate it and to help smallholders adapt to changing conditions.

With a growing world population, and the resulting increase in the demand for food, there will undoubtedly be greater pressure on land and water resources. As land-poor countries increase their investments in land-rich countries, we will need to create and implement in cooperation with our partners – the World Bank and FAO – a framework for responsible agricultural investment. Such investment must result in a win-win outcome for all. 

Internally, we will continue to face the challenge of strengthening IFAD by deepening our reform agenda to enable us to carry out our mandate fully, effectively and efficiently.

Resources will undoubtedly be a constraint, and we will need to constantly challenge ourselves to think of creative ways to mobilize fresh resources from various sources. We will also need to develop new financial instruments that better meet the diverse and evolving needs of our Member States.

And we will need to develop new partnerships to ensure that the innovative and effective projects that we have developed in many of our Member States are taken up and expanded so that they reach a much wider group of beneficiaries.   

I am confident that, with your support, we will overcome these challenges. We will build on our achievements to ensure that IFAD continues to be an institution that you – the Member States – can be proud of and can count on to help develop dynamic rural economies that enable poor rural men and women around the world to drop the shackles of poverty and become active players in vibrant rural communities.

I thank you for your attention.

17 February 2010