First Round Table: The effects of the crisis on developing countries and their impact on the Millennium Agenda

Excellencies,
Distinguished colleagues,
Ladies and gentlemen.

Introduction

First, let me thank Her Excellency Soraya Rodriguez Ramos, for inviting IFAD to chair today’s First Round Table on the effects of the recent crises on developing countries and their impact on the Millennium Agenda. I am deeply honored to be here.

Before I hand the floor over to our panelists, I would like to make a few remarks, which I hope will both set the context and add to our debate.

Global economic turmoil

We gather here today at very challenging times.  The financial crises, the global economic slowdown and recession during 2008 and 2009 are still felt deeply amongst us.  The food crisis and the global recession have impacted negatively on the rural population, further exacerbated by climate change and various natural disasters around the globe, the Haiti earthquake, followed by more earthquakes in China, Chile and other countries have made us ever more conscious of the need to deal with Food Security.

Developing countries were hard hit by the global economic crisis. The rate and strength of their recovery largely depend on demand from key export markets and countries’ ability to be competitive in those markets.

Meanwhile, yet another new crisis is looming in Europe.  The traditional donors to developing countries have historically high government deficits and the recent trend of downgrades in some European government bonds is disturbing.  Clearly, the global economic situation we face today is totally different and highlights the ever increasing need for all of us to collaborate.

 As developed countries introduce austerity measures into their national budget planning, there is a risk that investment in developing countries’ needs will be relegated to second position, with consequences for levels of ODA as seen in the past thirty years preceding the food crisis when development assistance decreased substantially.

This would be a setback from what was achieved in l’Aquila, further exposing the vulnerability of the over 1 billion people in the world who survive on US$1.25 or less a day.  

 This would also jeopardize much of the progress made so far in achieving the first Millennium Development Goal of halving the proportion of people whose income is less than US$1 a day and the proportion of those who suffer from hunger by 2015.

IFAD will continue to concentrate our efforts on promoting agricultural development as the recent crises have highlighted the importance of agriculture for sustaining growth: studies^1/ have shown that investment in agriculture is more than twice as effective in generating growth as investments in other sectors. This is dramatically true for the poorest countries of the world.

I would like to seize this opportunity to recognize the Spanish Government’s commitment to keeping the eyes of the international community focused on food security as central to present and future development.

Conclusion

When the MDGs were agreed in the year 2000, international development was not under siege like it is today. Many developing countries were enjoying encouraging growth and stability.

Much has changed since then. The ongoing effects of climate change, coupled with the impact of the global economic crisis, have radically altered the development landscape.

At a time when budgets are tight, it may seem prudent to cut back on investments in agriculture and development, but this would be short-sighted since this would lead to greater food insecurity. It would lead to slower economic growth and put the achievement of the MDGs firmly beyond our collective reach.

This is not where we want to be when world leaders meet again in New York in September for the UN Summit on the MDGs.

I hope that our debate today will come up with some concrete ideas for action – to ensure that we are ready for progress. I turn to our panelists today to challenge us to provide concrete and innovative ways to assist governments and all share and stakeholders on the way forward.

Thank you.

9 June, Madrid, Spain

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1/ World Development Report 2008