Enabling poor rural people
to overcome poverty

Press Release No. IFAD/15/01

Rome – 15 May World leaders in the drive to promote an equitable process of globalisation are meeting in Brussels in a conference on ''Least Developed Countries'' (LDCs). Their focus is on the 49 poorest countries including the bottom 10% of the world’s population in terms of income and well being. High on the agenda is Africa – and the threat to survival posed by the terrible reversal in human health that is putting into question the sustainability of all the continent’s progress in building better lives for its people.

Poverty reduction and the fight against AIDS are of prime importance to the UN Secretary General, Kofi Annan who is attending this Third UN Conference on LDCs.

The recently elected President of IFAD, Lennart Båge, a national of Sweden, and an active participant in the Conference, warns that if no action is taken now when there is a global consensus on development goals set by the international community, the rural poor will face increasing marginalisation in the LDCs.

LDCs are the poorest countries in the world, particularly ill-equipped to develop their domestic economies and to ensure an adequate standard of living for their populations.

The LDC-III Programme of Action characterises the lack of food security as the most typical face of poverty. IFAD has a unique mandate, to help eradicate rural poverty, create economic opportunities for the rural poor, and ensure food security. LDCs host 258 IFAD projects amounting to almost US$2.6 billion and consistently receive about 40% of IFAD’s annual lending. While sub-Saharan African development remains the greatest challenge for the 21st century, Båge believes that it is not lack of capacity, but rather lack of opportunity, which has stifled the continent’s development so far.

The majority of the LDCs are in Africa. These countries, like other LDCs, have been especially vulnerable to the disruptions caused by falling commodity prices, conflicts and natural disasters, as well as the AIDS pandemic. AIDS is striking at the heart of Africa, rolling back accomplishments in health and education, and leaving society weakened at every level. But AIDS is not the only disease threatening African lives and livelihoods. Malaria and water-borne diseases contribute mightily to the continent’s vast daily human sacrifice to problems that are crises in poor countries, but that in many cases have been completely overcome in the developed world.

Broad-based development processes are urgently required that contribute to the stabilisation of African families and communities, enable Africans to invest in basic measures for the control of AIDS and other diseases, and empower African women to take control of their own lives. More focus is needed on the African poor, both men and women. The rate of poverty reduction in Africa, is far lower than that required to achieve the Millennium Summit target.

At the thematic session of the LDC conference this morning, ‘Enhancing productive capacities: the Agricultural Sector and Food Security’, Lennart Båge, addressed the challenge of ending rural poverty. He called for a new approach to ending poverty among the least developed countries, an approach supported by focused domestic policies and enhanced international assistance.

''Reducing poverty by half in least developed countries, especially in Africa, will require a much higher rate of economic growth, about 7% per year, than has been achieved in the 1990’s. The majority of the poor in most LDCs live in rural areas, depending on agriculture and related trade, services and processing activities for their livelihood. Women, sadly, form a growing majority of the poor, with equal obligations for farmwork in addition to their household tasks, and yet, are even more deprived than men of assets, services or support. The only way to achieve a higher rate of growth in these countries is to engage the under-utilized capacities of the poor through broad-based rural development, centered on growing agricultural production,'' said Båge.

Båge emphasised that foreign direct investment offers the potential to help increase the production capacity of LDCs. In many of these countries higher ODA is essential to build the conditions in terms of health, education, infrastructure and services to attract private investment. Increased efforts towards achieving the 0.7% ODA target, refocusing development assistance resources, by IFIs and bilateral donors, on rural areas and on agricultural development is the key to achieving the 2015 targets.

IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 584 projects in 115 countries, allocating almost US$ 7 billion in the form of loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available to low-income countries on very favourable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.