Press release number: IFAD 18/02

Rome, February 20, 2002 - The President of the International Fund for Agricultural Development (IFAD) has called for a more balanced approach to distributing development funds. Speaking at the close of IFAD’s 25th Governing Council, Mr. Lennart Båge said a shift away from spending on the rural poor was hampering chances of making real progress in tackling poverty.

Mr. Båge said the Rome meeting would carry an important message to next month’s major conference in Monterrey, Mexico. This key summit, from 18-22 March, will explore how the international community proposes to fund its drive to combat poverty and meet the Millennium Summit goal of reducing the number of poor in the world by half by the year 2015.

“Heads of state and government from all over the world have made the commitment to the Millennium Summit goals. Now we will have to see how they will be financed,” said Mr. Båge. “Our message is: ‘Look at overall funding -- it needs to be increased. Look at how money is being spent in order to have an effect on poverty reduction.’ We have to have a balanced approach.”

Mr. Båge said that an urgent priority was to rethink the recent trend of diverting funds away from the rural poor towards the new urban poor. “The majority of the poor – three-fourths or 900 million out of the 1.2 billion – are in rural areas. Yet that is not what you see when you look at priorities of spending, nationally and in aid budgets,” said the President.

Progress towards a more secure future for millions of people in the developing world was also being impeded by international trade practices, said Mr. Båge. Export subsidies given by countries of the Organization for Economic Cooperation and Development (OECD) -- now totalling around USD1 billion a day -- made it difficult for poor farmers to compete.

“The only way for the poorest areas to grow out of poverty is by enhancing productivity and agriculture,” said Mr. Båge. “I think much more focus has to be placed on the subsidy system and on the problems it creates for development.”

IFAD strongly believes that the challenges facing the rural poor must be identified and addressed at the local level if help is to be given where it is needed. In an effort to step up the impetus towards meeting the Millennium development goals, the Fund has drawn up strategies for each of the six regions where assistance is being channelled. The plans of action were discussed at round table sessions for each of the regions during the second day of the Governing Council.

Asia and the Pacific

By virtue of sheer numbers alone, tackling poverty in Asia and the Pacific will determine the success or failure of the Millennium objectives. “Asia is the world’s shining example of what you can do with development in a short space,” remarked Mr. Phrang Roy, IFAD’s Director of the Asia and Pacific region and the Fund’s Assistant President. The region has seen a “spectacular transformation”, he said, with 325 million people being helped out of poverty in three decades, mostly in China and South East Asia.

Yet more than two-thirds of the world’s poor live in Asia, almost half of them in South Asia. In 1990, 20% of people living in East and South East Asia and 42% of those in South Asia were surviving on less than one US dollar a day. The aim is to cut these rates to 10% and 21% respectively.

If that target is to be met, the rural poor need better land and water security, more access to technology, finance and markets and more opportunities to become decision-makers. Peace is also a major issue in the region, with unrest threatening economic growth and stability in many areas. Women and indigenous peoples will need particular help.

Central Eastern Europe and the Newly Independent States

The problems facing the countries of Central and Eastern Europe present a new challenge to IFAD. The fall of communism led to a rapid rise in poverty. And with the sudden cessation of central planning and state services combined with the dissolution of the system of production and marketing in these countries, an institutional vacuum was created. As a result, heads of households in rural areas had to strike out on their own, with few services and no secure land tenure. “We must create a land registration system for these areas and establish a legal framework to manage these land parcels,” urged Mr. Majid Slama, director of Near East, North Africa and Europe at IFAD. The strategy proposal for the region includes investing in innovative pilot programmes, supporting research and capacity building through grant financing and the forging of partnerships with new donors and the private sector.

Eastern and Southern Africa

Eastern and Southern Africa is the region with the slowest economic growth and thus faces great obstacles in reducing poverty. To reach the Millennium Development Goals, this region would have to increase growth six-fold. Yet, it also holds great promise. More than 85 % of the extreme poor live in areas with good potential for increased agricultural production.

Unfortunately, there are also many constraints. One of the greatest is HIV/AIDS. Of the 34 million people worldwide with HIV/AIDS, 24.5 million are in sub-Saharan Africa. “The consequences of AIDS exceeds the total of all other threats and obstacles,” warned Mr. Jim Sherry, director of the Programme Development and Coordination Group at UNAIDS. For that reason, the world must start looking at AIDS not as a health problem, but as a development problem urged Ambassador Ove Ullerup, Under Secretary for Multilateral Affairs for the Kingdom of Denmark.

IFAD’s rural strategy paper on the region outlines a number of efforts to reduce poverty including promoting more efficient and equitable market links, boosting credit and other financial services, maintaining land quality, improving access to irrigation and aiding information and technology, addressing the HIV/AIDS crisis and responding to conflict.

Latin America and the Caribbean

The reduction of poverty in the countryside remains the greatest hurdle in this region. “Unfortunately, the profits earned in the 1990s were insufficient to revert the increase in poverty that took place in the 1980s,” said Ms. Raquel Pena-Montenegro, director of Latin America and the Caribbean at IFAD. To address this problem, IFAD has outlined a strategy for the region which includes increasing market opportunities, improving political dialogue, establish alliances and promoting a process of learning in and among regions.

Near East and North Africa

Efforts to reduce poverty in this region are constrained by the limitations of natural resources, including a fragile land-base, declining soil fertility, scarce water resources and recurring droughts and floods. Other institutional obstacles add to these difficulties. For instance, efforts must be made to give all women and men equal access to land, increase public sector investment in infrastructure in rural areas and improve the availability of financial services. The IFAD strategy in this region also focuses on diversifying ways of generating income. Dr. Nourddine Mouna, Minister of Agriculture of Syria, pointed to desertification, drought and meagre water supplies as some of the areas most needing attention.

Western and Central Africa

Success in this region is dependent on viewing poverty in the dynamic context of the rapid political, economic, and environmental changes that have taken place over the last decade. IFAD’s strategy for this region applies a number of cross-cutting approaches including investing in women, enhancing participation, building on indigenous knowledge and improving access to technology. Efforts must also address the threat posed by AIDS/HIV as well as other diseases such as malaria.

Many of the panelists expressed great optimism for the New Partnership for Africa’s Development, or NEPAD, a strategic framework for socio-economic development conceived by African leaders to promote growth, eradicate poverty and halt the marginalisation of Africa in the globalisation process.

“We must put rural development back on the map with new resources and new vision,” concluded Gary Howe, Director of Eastern and Southern Africa at IFAD.

---

IFAD is a specialized 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 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in 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 favorable 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.