Release number IFAD/09/08

Rome, 12 February 2008 – A US$70.9 million development programme will pilot innovative approaches to help 125,000 households overcome poverty in Inner Mongolia, China. The programme will assist them to improve their access to information, technology, financial services and markets. It will also contribute directly to the ongoing reform of the rural banking system.

The Inner Mongolia Autonomous Region Rural Advancement Programme will be partly funded by an IFAD loan of US$30 million. The loan was signed in Rome today by IFAD President Lennart Båge and China’s Zheng Xiaosong, Director General of the Ministry of Finance.

The Rural Credit Cooperatives will contribute a loan of US$5.7 million to the programme and the Government of China will contribute US$31.1 million. Participants in the programme will contribute the balance of the funding (US$4.1 million).

Despite the country’s impressive economic growth and an unprecedented decline in poverty, inequalities between and within regions in China are increasing, particularly in disadvantaged areas of the western provinces.

“So far, government and donor-funded programmes have used the same poverty reduction strategies in different locations,” said Thomas Rath, IFAD’s country programme manager for China.

“Sometimes this has led to reduced results. This suggests that we need to try new approaches. We need to target with specific approaches tailored to the local needs of people and their institutions.

“This programme will put poor people at the centre of its activities and work with them to boost their potential,” Rath said.

The programme will promote greenhouse and organic crop production with links to markets and buyers. And it will set up village development funds to pay for infrastructure and activities selected by the community.

IFAD’s new country strategy for China focuses on the organization’s catalytic role as a promoter of innovation. In line with the strategy, the new programme will pilot innovative approaches in selected sectors. At the end of the six-year programme, innovations that have proved to be effective and sustainable in reducing rural poverty will be ready for the government and other donors to scale up.

The programme targets families living in extreme poverty and low-income households with per capita incomes of less than US$1 a day, particularly those headed solely by women. Farmers and poor women who head households have low skills levels and very limited access to financial services such as microcredit or savings schemes. Labour resources are scarce because of high migration to the cities, and the productivity of economic activities is low. The programme has the potential to reach about 125,000 households in more than 720 villages in nine counties.

With this programme, IFAD has funded 21 programmes and projects in China, with loans and grants worth US$528.2 million. Four programmes and projects are currently ongoing. In 2007, China and IFAD published a picture album commemorating 25 years of partnership in the fight against rural poverty.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested almost US$10 billion in low-interest loans and grants that have helped more than 300 million very poor rural women and men increase their incomes and provide for their families.
IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports more than 200 programmes and projects in 84 developing countries.