Mr Chairman,
Your Excellency, President of the Republic of Mali,
Distinguished Governors,
Ladies and Gentlemen,

Today we celebrate twenty years of IFAD. This marks an important point for us - the emergence of the Fund as a mature institution, proud of its past and confident of the future. On this historic occasion, may I welcome you all warmly to Rome to this commemorative session of the Governing Council.

We are grateful to the President of the host country, His Excellency President Oscar Luigi Scalfaro who has honoured us by inaugurating this Session.

We are further honoured by the presence among us of many distinguished guests - the President of Mali, Mr Alpha Oumar Konare, the Foreign Minister of Italy, Mr Lamberto Dini and the former Prime Minister of France, Mr Raymond Barre.

I am of course personally happy to have with us today the Director General of FAO, Mr Jacques Diouf and the Executive Director of WFP, Ms Catherine Bertini. Their participation here symbolizes the close and mutually beneficial cooperation between our Agencies.

May I also record my appreciation for the presence today of IFAD's first two Presidents, Mr Abdelmuhsin Al-Sudeary and Mr Idriss Jazairy.

We are grateful to them and for the message they bring which will be an inspiration to all of us.

Mr Chairman,

The completion of twenty years of IFAD operations provides an opportunity to take a look at the road we have travelled together in these last two decades. It is equally a time to look ahead and consider where we would like our institution to go in the next twenty years.

IFAD's founders gave the Fund a threefold mandate: to help raise food production; to help the poorest groups to improve their nutrition levels; and to help overcome their poverty and deprivation. Thus IFAD, unique among financial institutions, was given a direct and specific focus on the hunger and deprivation afflicting poor men, women and children in rural areas.

Of course, poverty and hunger two decades ago were recognized as important issues. But many at the time thought that the benefits of economic growth would trickle down to the poor. Unfortunately, there were few policy, institutional or infrastructural linkages to make sure that the trickle down was rapid or effective. At best, marginal groups were provided some subsidies which might help temporarily but did little to overcome their basic deprivation.

In IFAD we took a different approach, looking at development as a bottom-up rather than a top-down process. At the heart of the Fund's approach was the conviction that the key to successful poverty alleviation lies in giving the poor the opportunities to help themselves rather than by treating them merely as objects of charity. We were convinced that the poor were capable of innovating and investing and responding to policy incentives to better their lives. But they needed access to credit, technology and productive services relevant to their needs. We realized that to achieve this, our programmes had to be carefully targeted to reach the poor, especially women. For us gender focus was not only a phrase but a central priority - an entry point to enhancing household food security and to providing women with equitable opportunities.

Providing targeted assistance was at the time a relatively uncharted field. We therefore had to develop, by trial and error, mechanisms to target assistance to the poor for on-farm and off-farm activities. We located our projects in the poorest areas of the countries, and within these areas we targeted groups which were among the poorest by using eligibility criteria. Beyond that, our support, especially credit, was earmarked for the activities of the poor, especially activities undertaken by women. In all of this, we found it was essential to elicit the direct and active participation of the poor in designing and implementing projects. Indeed, participation of the poor and close collaboration with community organizations and NGOs representing them have become a hallmark of our operations.

Our focus on the poor led us to the most marginalized groups, including tribal and indigenous peoples, long bypassed by development programmes. It also took us to the most ecologically vulnerable zones, semi-arid regions, hilly and upland areas and deep forests, and to countries where others were often reluctant to go. China, seventeen years ago, Viet Nam later, and today, some of the countries in transition in central and east Asia.

In many of these countries IFAD was a pathbreaker, often the first international financial institution to offer support.

A key breakthrough in bringing opportunities to the poor was opening the door to credit. Starting with our support for the Grameen Bank in the late seventies, through to the P4K Programme in Indonesia now in its third phase, IFAD-supported micro-finance programmes carefully targeted poor borrowers. Many used the credit to purchase fertilizers, tools and other inputs as well as make on-farm investments to raise farm yields. Others have been able to purchase a cow, goats or chickens, take up crafts or start trading activities and microenterprises. The effective use they have made of the loans, and the excellent repayment rates, have demonstrated that the poor can indeed be "bankable", an idea that twenty years ago would have seemed farfetched to many.

Individual loans in IFAD projects are small, usually a couple of hundred dollars each. But over the twenty years, these projects have provided over four billion dollars in microcredit reaching some fifty million poor people. Listen to the voice of one of our clients, Sembayee, a 50-year-old participant of the IFAD-supported Women's Project in Tamil Nadu in India.

I joined the savings group four years ago and I was able to receive a loan of USD 285 to open a grocery shop. I paid back the loan and the money I earn we are using to build a little house. Thanks to the project, I have learned many things, to read and write, to go to the bank and the government office. I earn money every day and am more confident. I am sure the future will be good.

Credit is a powerful tool against poverty. But it is not by itself a panacea. To have a real impact it needs to be combined with access to extension and better technology as well as fair markets.

Agricultural research twenty years ago gave priority to crops and technologies suitable for better-off and commercial farmers. Moreover, prevailing extension models tended to bypass small farmers and small-scale rural producers, concentrating instead on the larger farmers with good irrigated land and other assets. To respond to this situation, IFAD provided Technical Assistance Grants to support research devoted to food crops grown by the poor and for control of pests that pose serious dangers for poor farmers such as the cassava mealy bug, the desert locust and the screwworm fly.

We also helped to develop participative extension systems directed to the poor. In these, the extension agents often living locally, interact with groups of poor farmers, identifying the constraints they face and offering them different possibilities to overcome them. The problems facing the farmers can also be fed back to research institutions and appropriate solutions found. This approach promoted demand-driven extension systems in which poor farmers have had a decisive voice in selecting the technologies, crops and methods most suited to their conditions. Such participative extension systems have been found so useful by the farmers, that in recent projects, for example one in Paraguay, local farmers have been willing to pay a rising share of the extension workers' salaries. Such cost-sharing not only reduces the burden on government budgets but it also makes the extension systems more responsive to the needs of the farmers.

Water of course is a perennial constraint especially in semi-arid and dryland areas. Here again, IFAD has helped to turn around the prevailing approach which focused on large-scale dams and irrigation systems.

Instead IFAD concentrated on small-scale irrigation and water conservation methods that smallholder farmers themselves, working through water users' associations, could manage and maintain. We also built on traditional techniques for water harvesting, techniques such as the demi-lunes to collect water long used in West Africa. Small-scale farmer-managed irrigation schemes have not only improved yields but have served as instruments to overcome disputes on water rights.

Our operations in marginal areas, vulnerable to desertification, highlighted the interlinkages between poverty and environmental degradation especially in sub-Saharan Africa. Rising numbers of people and animals have eroded traditional land management practices. Today, poor farmers and herders often have little alternative but to overuse vulnerable crop and rangelands accelerating the degradation of the natural resource base. This in turn deepens their poverty and adds a further twist to the spiral. This vicious cycle can only be broken by helping local communities to organize themselves into users associations and adopt sustainable technologies, often utilizing improved forms of their own traditional practices. We have seen in projects in Niger, Morocco and elsewhere that IFAD-type participative resource management, extension and credit schemes can create the conditions for such community-level initiatives. Poor farmers and herders can then help to protect, rather than erode, the resource base on which their livelihoods depend.

This operational experience helped to shape our Special Programme for Sub-Saharan African Countries Affected by Drought and Desertification, a Programme not for drought relief but for strengthening community resilience. The projects supported by the SPA have shown some of the most interesting results available anywhere for harmonizing and making mutually supportive poverty alleviation and environmental protection. IFAD's selection recently as the host for the Global Mechanism of the Desertification Convention is a recognition of the Fund's extensive experience in this field.

Mr Chairman,

Access by the poor to credit, technology and fair markets, minimum infrastructure and basic health and education services are the major elements of what we have called an Enabling Micro-Environment for the Poor. We believe this is an essential counterpart to the Enabling Macro-Policy Environment called for by the larger financial institutions.

Seeking to foster such a Micro-Environment has been a major aim of our projects which now total 489. IFAD has provided financing of USD 5.67 billion of their total cost of USD 17.5 billion. This means that every dollar IFAD has channelled to the poor has mobilized a further two dollars and ten cents from other donors and host governments. On full development, the projects will help some 30 million poor households, about 200 million people, to work their way out of hunger, poverty and deprivation.

Mr Chairman,

The conviction that the poor can be the principal actors in rural development underpins IFAD's whole approach to poverty alleviation. This perspective and the breakthroughs that have flowed from it have now been largely accepted in the mainstream development agenda. In recent years most development organizations have come to regard the eradication of poverty as a major goal. We have already built strong strategic alliances for collaboration with the World Bank, other regional banks and our sister UN Agencies. Now, there are significant new opportunities to enhance our cooperation with such organizations.

These developments are very welcome. At the same time they pose a new and strong challenge to IFAD to be even more innovative to maintain a leadership role in the struggle against poverty. In fact, the question may be raised that when so many emphasize rural poverty eradication, what should be IFAD's role in the next twenty years?

This challenge was sharply defined by the High Level Team of Experts chaired by Professor Ivan Head of Canada which carried out a Rapid External Assessment of the Fund in 1994. Recognizing the effectiveness of IFAD's operations and endorsing strongly its basic mission, the Assessment Report called on the Fund to "become the foremost agent for coherent and rational activity in rural poverty diminishment".

The Report further called on IFAD to become a Knowledge Organization, a knowledge creator, storehouse and disseminator.

In our determination to meet fully this challenge, we have over the last four years undertaken major initiatives in IFAD's governance and operations. Member States of the Fund for their part have endorsed wide-ranging structural changes in IFAD's Governance to adapt it to the evolving international economic and political situation. The Fourth Replenishment was completed last year, assuring the Fund adequate resources for the next three years.

In parallel, we have undertaken a programme of re-engineering and reform of all our work processes. On the basis of suggestions from IFAD staff themselves, major changes have been introduced into the project cycle and the budgetary process as well as in areas such as information and document management.

More fundamentally we have reflected carefully on our mandate and developed a Vision Statement to guide IFAD's work on hunger and poverty. On this foundation, a Corporate Strategy has been elaborated, leading to departmental and unit strategies which now drive the budgetary allocations.

These internal reforms and our enhanced focus on poverty will enable us to play our full part in the imaginative process of UN reforms that the Secretary-General has launched over the last year. IFAD has recently been invited to join the United Nations Development Group which brings together all the organizations concerned with development issues. We look forward to working with our partners to ensure the full success of these initiatives.

Let me say here a word of appreciation for the commitment and devoted efforts of our staff. During the last few years when so much change was taking place, IFAD staff kept their sharp focus on their mission and on the needs of our clients, the poor. The depth of their knowledge and experience, is I believe what really makes the Fund such an effective instrument against poverty and hunger and which has made a success of our reform efforts.

We have already reaped some of the fruits of these reforms. It is a matter of pride for us, for example, that between 1992 and 1997 IFAD's Administrative Budget and project development costs have been reduced by more than a quarter. Over the same period, IFAD's Programme of Work - the projects we deliver - has been raised by nearly a third. "More for Less" will remain a powerful theme for us in the coming years.

Mr Chairman,

Over 1.2 billion human beings continue to live in absolute poverty, a larger number than the entire population of the world in the early nineteenth century. Increasing concern is now voiced about reducing these numbers but at the same time development assistance particularly for agriculture has weakened. Yet, the bulk of the poor, perhaps as many as 80 per cent, live and seek livelihood in agriculture and other rural occupations.

In today's context, with globalization, domestic liberalization and the increasing reliance on market-based development, a new dilemma has arisen for the poor.

Reforms are opening up fresh opportunities and space for civil society institutions and non-governmental organizations as well as private agents. But poorly developed markets do not often favour the weak. There is thus a serious risk that if poor groups are not adequately equipped with skills and have access to productive services, the reforms could further impoverish low income groups in Asia, Africa and elsewhere rather than better their lives.

I believe that the innovative approach to poverty that IFAD has fashioned in these last twenty years and the reforms that we ourselves have undertaken over the last four, place us in a good position to help address this challenge.

Our approach has always considered the rural poor as producers in a market context. The aim has throughout been to foster the conditions, what we have called the Enabling Micro-Environment for the Poor, in which they can deal on a fair basis with the market. This approach has even greater validity today as the emphasis shifts to a reliance on market processes and the associated withdrawal of state-provided services.

At the same time, it calls on us to build on and reinforce some elements of our approach to poverty and household food security.

IFAD has played a pioneering role in developing and making a reality of the concept of participation by the poor. Under our new Corporate Strategy we intend to take this further and bring about full partnerships with the poor and the community-level and other civil society institutions which represent them. We have long sought the collaboration of such organizations in the design and implementation of our projects. We are now looking to move from a process where they participate in our projects to one where our assistance will increasingly support development activities initiated by them.

Microfinance is another crucial area. We have many times helped promote credit schemes which can reach the poor cost-effectively. Our goal now must be to promote rural financial systems which are viable and can develop continuing relationships with poor borrowers and grow to meet their changing needs to support both on-farm improvements as well as microenterprise development.

The withdrawal of state-provided extension and other services makes it of critical importance to bring about markets for such services to which the poor can have fair access. In our recent projects we have found that partnerships between the poor and their organizations on the one hand and private suppliers, universities and the like on the other, can be built. Such market-based partnerships can be both financially viable and mutually beneficial. This process must become a general one in the rural areas of developing countries.

These considerations are especially important in sub-Saharan Africa which is subject to droughts and other disruptions and where market institutions in the rural areas are weak. It is the only region in the world where the proportion of the poor is rising. African countries face heavy and sometimes unsupportable debt burdens. Another urgent need is to develop effective strategies in post-crisis situations to link rehabilitation with structural improvements to promote sustainable development. IFAD will continue to give these issues full attention.

As regards the Fund's role as a knowledge organization, we have taken steps to set up a database on the lessons learnt from our experience and to share these with others. We shall seek to live up fully to the External Assessment Report's call for IFAD to become the world's leading repository of information on rural development and poverty.

Mr Chairman,

In our first twenty years we learnt a great deal about the causes of poverty, of the resourcefulness of the poor and of the elements necessary for a successful attack on poverty and hunger. Millions of human beings have been helped to overcome the constraints that trap them in a cycle of deprivation from one generation to the next.

Yet an enormous task lies ahead of us. The international community has asserted its will to reduce at least by half the numbers in absolute poverty by 2015. This target is wholly achievable if all institutions and the host governments bring their energies to bear in a focused and convergent manner to build the conditions in which the poor can work their way out of poverty.

I look forward to a point when IFAD projects will not be seen as ends in themselves. Rather, they will serve as spearheads working with others to drive a wave that will end hunger and bring hope and opportunity to those millions today condemned to absolute poverty.

That, Mr Chairman, will be the goal that will inspire IFAD in the next twenty years.

Thank you.