Opening Session - Regional Workshop on Poverty Reduction and Rural Growth in Eastern and Southern AfricaDar-es-Salaam - May 23, 2002

Your Excellency Dr. Ali Mohammed Shein,
Honourable Frederick Sumaye, Prime Minister of Tanzania,
Honourable Ministers of Tanzania and Countries of the Eastern and Southern Africa Region,
Ambassadors and Representatives of the Diplomatic Community,
Senior Officials of the Countries of the Eastern and Southern Africa Region, Senior Officials of Bilateral and Multilateral Development Institutions, Representatives of NGOs and Civil Society,
Ladies and Gentlemen

Let me start by saying how much I, and IFAD, are honoured by the welcome given by Excellency Dr. Ali Mohammed Shein, Vice-President of Tanzania, to all of us participating in this important workshop. Above all it expresses the commitment of Government of Tanzania to addressing vital issues for the future of Tanzania, the region, and, indeed, the world. Tanzania's engagement in issues which are important to itself, but also to the whole of the developing world, has recently been recognized by the President of Tanzania, His Excellency Benjamin William Mkapa becoming the co-chair of the World Commission on the Social Dimension of Globalization. That reminds us that the issues of this region are very much connected to the fundamental issues of global change - and how to make it work for human development everywhere. Looking around this room I see concrete proof that these issues are, indeed, common concerns. I also sense a clear understanding that we can and must benefit from working together. I sincerely hope that over today and tomorrow we cannot only pose questions, but also come up with some of the answers that will guide our thinking and action. This will involve hard work - and that is why this meeting was very deliberately called a workshop.

Let me put the big questions on the table immediately. How can we work together to reduce poverty in Eastern and Southern Africa? What are the major obstacles? What has to be done? Who is going to do it?

I put these questions in a very specific context. African Governments and the international community as a whole have committed themselves to the Millennium Development Goals. One of the key goals, indeed the overarching goal, is to reduce the proportion of people living in extreme poverty by half by the year 2015. This is a goal for the whole globe. It is a goal that should be met in Africa. The question is: what does it involve in terms of action? The very basic and undisputed fact about global extreme poverty - and here we are talking about the poverty of 1.2 billion people with an income of less than US$ 1/day - is that it is overwhelmingly rural. Three quarters of the population of the region live in the countryside - and that is where no less than 83% of extremely poor people are. They depend overwhelmingly on agricultural for their living. So, when we talk about reducing extreme poverty we must be talking about action that must very directly and very consciously address rural poverty issues on a priority basis. IFAD very strongly made that point last year in its Rural Poverty Report 2001. Today we are beginning to see much greater awareness of the rural dimension of global poverty, and I believe that we should build on that -- quickly.

For a little more than a year - and thanks to your strong support - I have had the honour and privilege of leading the International Fund for Agricultural Development - what you and I know as IFAD. Since 1977 IFAD has focused exclusively on the reduction of poverty and food insecurity in developing countries - not least in sub-Saharan Africa, which last year absorbed more than 40% of IFAD's loan and grant commitments. The poverty reduction target set in the MDGs is not new to IFAD - this has always been our goal. But now the issue is not just what IFAD does - but what we do together to reach the Millennium Development Goals.

The first thing is that we all have to focus on poverty where it really is - and it is principally in the rural areas. The challenge inescapably involves accelerating rural development - including rural economic development. Two critical dimensions of poverty - but certainly not the only dimensions - are lack of income and lack of assets. To increase these we must go beyond highly needed social interventions in health and education to touch upon economic development processes in the countryside. Without rural economic growth there will be no resources to pay for the schools and clinics in the villages. To put the matter simply: we have to overcome the urban bias and the social sector bias. We have to have a balance between urban and rural development - and a balance between social and economic development. Rural society and the rural economy have to be recognized as core issues in the big development and poverty reduction picture.

Rural development questions went out of fashion with many governments and many donors when the failure of many past approaches became all too evident. They have to be brought back into fashion - particularly in Africa, where over four fifths of the extremely poor live in the countryside. In the Financing for Development Conference in Monterrey clear commitments were made to increase development assistance. IFAD and the World Bank and FAO and WFP organized a side-event that focused on rural development. It was well received and we were very much encouraged. But we are still very far from the situation in which rural development is not a side event but the Main Event - particularly for Africa. It is the Main Event here. We must struggle to also make it the Main Event in Global Poverty Meetings in the future. We have to ensure that the development effort is renewed, that it recognizes the absolutely critical dimension of rural poverty, and that it recognizes that without economic growth among poor people in rural areas we will not significantly reduce poverty in large areas of the world - and especially not in Africa. When my own country, Sweden, grew out of poverty in the nineteenth century, and when the "Asian tigers" started to roar in the second half of the twentieth century it was from a sound basis of strong agricultural and rural development that enabled an industrial take-off. The issue, then is not only of agricultural development, per se, but of laying he foundations for future sustained growth.

So we have a challenge to influence and shape the global approach to poverty reduction. It is a challenge that can only be won if the developing world makes the point clearly and forcefully. But in order to respond to the challenge abroad, we have to have a strong basis at home. I have to say that the marginal status of rural development issues is not just an aspect of global development meetings. It is also an aspect of development thinking in Africa. We often comment on the low and decreasing level of Official Development Assistance directed to rural development. ODA to agriculture is now less than 10% of all ODA. But it is often true - as pointed out in the NEPAD foundation document - that the proportion of national resources in Africa going to agricultural development is very low, indeed.

Now rural development is not only agricultural development, and not all agricultural development is necessarily effective in reducing rural poverty, but the figures on public expenditure do not send a very positive message about the commitment of the region itself. This means that the issue of putting rural development higher on the development agenda is not just an issue for dialogue with donors. It is an issue that has to be addressed in Africa, in the region, in every country.

One of the arenas in which this challenge has to be addressed is in the NEPAD process. President Obasanjo of Nigeria gave his keynote address to the IFAD Governing Council on the subject of NEPAD - on the potential that NEPAD has to create a new basis for development partnerships. It will do so if it is truly broad-based and reflects the
aspirations and commitments of the African community as a whole. Over the next two days we will be discussing what it will take to make poverty reduction an expanding reality. The question of how NEPAD will provide a basis not just for growth, but also for poverty reduction must be an important part of the discussions. The big themes of transparency, accountability and good governance are vital. Also vital are the concrete, local and immediate solutions to the obstacles confronting growth in the activities of the poor.

NEPA D is important in itself, but also as a metaphor - as an expression of the fact that enduring African change must be based on African initiatives - and have to be under African ownership. Those initiatives cannot be only High Level. They have to be from every level. IFAD's experience over 25 years allows us to draw a simple but very profound conclusion: no amount of national or international assistance will radically improve the rural situation unless that transformation is based on the aspirations, assets and activities of rural people - unless poor people own the change process. We cannot do development for them. We can, and must, assist and enable. So change will take place, and we can contribute to that change, to the extent that we can give effective support to rural initiatives - of individuals, groups and communities. To make sure that development assistance actually fits and supports those aspirations, we have to make sure that the rural poor have a greater voice in shaping policy and expenditure.

That reminds us that NEPAD will be effective, and will overcome the weaknesses of other initiatives in the past, to the extent that it sinks roots deep into regional realities, capacities and shared aspirations - including those of the poor. This need to address directly the real problems of the poor is something that the region has already been confronting in the development and implementation of Poverty Reduction
Strategies.

We in IFAD believe that the Poverty Reduction Strategies hold a very exciting promise - of establishing clear priorities, of focusing resources on critical questions, and of creating an enduring framework of collaboration. They are very important. Because they are so important we have to work to ensure that the rural development question, and the interests of the rural poor -over 80% of all the extremely poor people in the region - are fully reflected in them. In a certain sense, we are just at the beginning of the history of PRSPs. They will develop over time. They will become more comprehensive, and they will expand to articulate clear strategies. If we work together they will become the vehicles of stimulating the rural revival.

The issue of participation in the Poverty reduction Strategies - in their formulation and their implementation - is a key issue, and one that we have to thank our NGO colleagues for highlighting. In many countries very important efforts were made to ensure consultation. The task ahead is to elevate participation from occasional consultation to day-to-day involvement in and influence over decision-making.

But the challenge for poverty reduction is not only of participation in PRSPs. It involves all aspects of everyday life. Really effective poverty reduction will require much greater empowerment of poor rural people. In everyday language, that means putting more resources (and here I am thinking of such basic necessities as water, land and finance) directly into the hands of the rural poor, increasing their role in defining and solving policy problems; and putting them in a position to exercise greater influence over the institutions they work with. We cannot do development for the poor. But, once again, we can work assist and enable. This is why IFAD has been such a consistent supporter of decentralization in the region. But we know that rights without capacity are not enough to make decentralization work. That is the reason why IFAD has sought to ensure that expanded formal opportunities for participation are paralleled by support to poor people's organization and knowledge. It is this that turns participation into influence and control by people over critical areas of their lives and futures.

The issue in front of us - resuming the rural development effort, and making it work for the poor - is not an entirely new one. But the answers cannot be old answers. The rural world has changed, and the solution to rural poverty has to change with it.

One of the key changes involves the process of increasing political openness that is making space for greater influence and participation by poor rural people. This process is called by many different names, but the name is not important. What is important is that political and administrative systems are changing, and we have to work to ensure that the rural poor can benefit from that. We have to ensure that their voices are hear, that their needs are recognized, and that their priorities are acted on.

Another big change is that the lives, incomes and food security of poor rural people are increasingly shaped by markets. Reducing poverty will increasingly mean strengthening the capacity of poor rural people to produce better for the market, to negotiate better market exchanges, and to pay for social and economic goods. This is a Great Transformation. The fate of rural poverty hinges very much upon poor people's ability to establish a stronger position in that transformation process. Overall economic growth in the market context is critical for long-term development, but equally critical for truly sustained development and poverty reduction is economic growth among the poor - in what they do and where they are.

This focus on the existing reality and location of the rural poor is not the same as business as usual. Small farmers have the potential to compete in, and benefit from, developing markets on the basis of their own resources: most poor rural people actually live in areas of medium-to high potential. They are not farming wasteland. We have not been good enough at supporting that potential. We have to re-think our work. We have to identify the opportunities and constraints, and we have to work differently.

We have to think not only in an African context, but also in a global context. Poor, small farmers can make it - but they need new forms of assistance and new partnerships. Let me refer to an important example of this need for change. Changing international demand and standards require: changes in crops, new and highly efficient forms of processing, and new marketing strategies. To achieve this, there will often be a need for collaboration with the larger scale private sector - both national and international.

We have to consider ways of making such collaboration attractive to the private sector. That is an issue that is very much under discussion in the NEPAD process. It is a practical question of policy, institutions, investments and partnerships that IFAD will not turn away from, and one which we need to understand better - together. I must say that this issue is not a simple one - and that the over-riding objective must be to ensure that the relationship between small farmers and the private sector is a win-win exchange, and not an avenue of further small farmer impoverishment. Of course, agriculture is at the heart of the economies of the rural poor everywhere - and especially in Africa. That means that we have to look carefully at issues in agricultural development and agricultural commercialization. One key issue is the problem of the organisation of international agricultural markets. African countries are being asked to open their markets and rely more on international trade. However, the international agricultural markets that will remain a vital part of their immediate future are among the most distorted in the international economic system. This operates very much to the disadvantage of the rural poor. Trade is not a distant thing, it penetrates into every community and every household, however distant or poor. It is a key element in the rural poverty equation. The issue of agricultural trade and subsidies is entering the international agenda. It must be pursued vigorously. The current system systematically blocks many avenues of economic development among poor rural people. It has to be changed -If trade is going to be as important as aid in reducing poverty, it has to be trade giving developing countries access to markets instead of using them as dumping grounds for surpluses fuelled by subsidies. Trade has to serve the poor majority, and not only a rich minority.

I have concentrated on some very important structural issues - on issues that affect everyone. But I also want to make a special plea to ensure that we also keep our eye on some very critical social issues that will shape the ability of rural society to respond to change.

The first point is that while the gender issue changes as society changes, it does not become less of a challenge. While we talk about the great political and economic transformation, we must keep in mind that all this is based on people - and that change in gender relations can very much influence the rate and direction of transformation, especially with regard to its implications for rural poverty. Looking back over the last hundred years, successful development processes have everywhere involved an improvement in the status and role of women - both as a result and as a cause. For rapid growth and poverty reduction to take place women have to be empowered: as producers and as decision-makers. In the process of change, institutions and policies often lag behind what is needed to unleash the potential for change and growth. I believe we must pay much greater attention to this - not only as a social issue, but also as an economic growth issue.

The second point is that the development and poverty impact of the HIV-AIDS epidemic has to be better recognized - and action taken under the rural development heading. Three quarters of those infected by HIV-AIDS live in Africa, and most of these people are now in the countryside and are part of the rural poor. HIV-AIDS is making Africa poorer, and is eroding its capacity for change. HIV-AIDS is a medical fact. But the epidemic is also a social and economic fact. It is driven by social forces - by poverty and gender inequality. We can help poor people contain this menace by helping them access new livelihood options, knowledge, and support to cope with the impact. Let us make no mistake, HIV-AIDS is principally a disease of the rural poor at this point. It undermines development, but it can also be overcome through development.

Very much of Africa is poor. But it does not need to be. African resources are enormous, and people, especially poor rural people, need to enjoy a framework that enables them to use those resources better - and that enables them to eliminate extreme poverty. In the past we have invested a great deal, but we have not reduced poverty enough. We believe that this means that we have to change what we do. IFAD has changed. We have carefully looked at our success and failures, and we have developed a new basis for engagement - what we call a new Strategic Framework. That, in turn has led us to produce a new Regional Strategy for Eastern and Southern Africa. We believe that we have identified some critical problems - but also solutions. My colleague, Gary Howe, Director of IFAD's Eastern and Southern Africa Division, will talk about some of these issues in just a moment. I hope that in this meeting - which is a meeting to share ideas and discuss, not to lecture - we can work together in coming to agreement on what the important issues are and how to deal with them in the context of Poverty Reduction Strategies and NEPAD.

On a concluding note, let me share my optimism. Poverty in Africa is great, but it can be reduced. It can be eliminated as an overwhelming social and economic fact. To achieve that, a lot has to change. But it is feasible - and the route goes through the rural areas and the economies of the poor. I hope that this workshop can identify critical elements of the way forward -- not necessarily through a detailed design, but through a commitment to act in partnership with the rural poor as the subjects in their own right and not as the objects of our benevolent design. The poor in Africa, as elsewhere, have strength, and aspirations and dreams. Let us build on those strengths and empower those aspirations. Let us give hope to those dreams.