Press release number: IFAD 19/05

Experts discuss different national approaches at IFAD’s Governing Council 2005 session

Rome, Thursday, 17 February 2005 - Developing countries need to adopt national poverty reduction strategies if they are going to reach the Millennium Development Goals (MDGs), experts attending a roundtable discussion said today.

“National strategies for rural poverty reduction,” a roundtable discussion jointly prepared and organized by IFAD’s regional divisions and held as part of IFAD’s Governing Council 2005 session at the Palazzo dei Congressi in Rome, provided an opportunity to discuss different approaches to poverty reduction and consider which types are most conducive to achieving the MDGs.

The panel discussion featured officials from the governments of Brazil, Rwanda and Tunisia, as well as a representative from the Overseas Development Institute of the United Kingdom and IFAD staff.

Poverty reduction strategies generally describe the macroeconomic, structural and social policies and programmes of a particular country, as well as associated external financing needs. In recent years, the range of national strategies has evolved. But three broad categories of strategies exist:

• Poverty Reduction Strategy Papers (PRSPs) linked to external debt relief through the Debt Initiative for Heavily Indebted Poor Countries (HIPC)
• PRSPs linked to concessional loans from the World Bank and the International Monetary Fund
• Poverty Reduction Strategies that are not linked to debt relief programmes or loans, and therefore outside the PRSP framework

The donor community tends to play a greater and more coordinated role in PRSPs, which are most common in sub-Saharan Africa and in Eastern and Central Europe. Strategies developed outside the PRSP framework are on the rise in many countries, particularly in Latin America, North Africa and the Near East.

“Country ownership is one of the most important aspects of poverty reduction strategies,” said Roberto Longo, PRSP Programme Officer in IFAD’s Eastern and Southern Africa Division. Country ownership, however, tends to be stronger within strategies outside the PRSP framework, which are better integrated into existing government frameworks.

Brazil is one country that has had remarkable success with its own national strategy. By pairing agricultural reform with support to family farming, the Brazilian government has enabled hundreds of thousands of smallholder farmers to be more productive and earn higher incomes.

“In the past year, family farming has been the fastest growing sector within agriculture,” says Guilherme Cassel, Brazil’s Vice-Minister of Agrarian Development. “We believe that smallholder farmers can significantly contribute to the country’s economic development.”

Involving various stakeholders has been key, Cassel asserted. “Poverty reduction strategies must be based on broad social participation – or they will almost always fail.”

This is one of the reasons why Rwanda is planning on up-dating its current PRSP this year and enhancing its participatory approach, said Daphrose Gahakwa, Rwanda’s Minister of State in charge of Agriculture.

Participation in a given country is directly related to the strength of its civil society, said Longo. But in some regions, like Eastern and Southern Africa, the civil society organizations involved in PRSP formulation has often been limited to non-governmental organizations with little or no presence in rural areas.

About 75 per cent of the world’s 1.1 billion extremely poor people live in rural areas of the developing world.

Many strategies have been weak in identifying the rural dimension of poverty reduction, said Longo. To reverse this trend, agricultural and rural development ministers need to be involved in the formulation processes.

A number of implementation tools, including territorial-based action plans, sectoral and multi-sectoral approaches and harmonization at the international level, are gradually being adopted to better tackle the rural dimension of Poverty Reduction Strategies.

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IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries. Seventy-five per cent of the world's poorest people - 900 million women, children and men - live in rural areas and depend on agriculture and related activities for their livelihoods. Through low-interest loans and grants, IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty themselves.

There are close to 200 ongoing IFAD-supported rural poverty eradication programmes and projects, totaling US$ 6.5 billion. IFAD has invested about US$ 3 billion in these initiatives. Co-financing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help more than 100 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$ 8.5 billion in 676 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families.