Issue 7 - November/December 2005
Pro-poor
policy dialogue
In this issue
Pakistan
earthquake
IFAD and the Government of Pakistan are working on arrangements
for infrastructure rehabilitation and rebuilding of livelihoods
in the disaster area.
read more
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Message from the Director
of Asia and the Pacific Division
Investments for rural poverty reduction directly support
a targeted number of people, within an approved budget constraint,
to move out of poverty. When national policies are subsequently
adjusted to incorporate the lessons learned from the successful
replication and scaling up of innovative and effective programmes,
all people are enabled to move out of poverty on a sustainable basis.
Pro-poor policies enable all poor rural producers to overcome their
poverty. Inclusive policies have been a major determinant in achieving
the Millennium Development Goals in the well-performing countries.
Policies define the production possibilities of rural poor people,
determine the profitability of their economic enterprises and constitute
their incentive framework. In many countries, policies used to be
biased against poor rural producers, especially smallholder farmers;
in some countries, this is still the case. Currently, the dominant
policy framework is founded on liberalization, government disengagement
and market principles that shape an economically efficient allocation
of scarce economic resources. However, markets left on their own
do not establish conditions to function efficiently. They do not
constitute level playing fields for the many small producers who
have limited bargaining power to negotiate adequate terms for market
participation. And many governments have shed a significant part
of their institutional capacity to manage market or policy failure.
True to its fundamental faith in country ownership, IFAD’s
approach is to strengthen the capacity of rural poor producers and
their organizations to influence the policies that determine their
livelihoods and market participation. IFAD-supported programmes
provide training to small rural producers and capacity building
to their organizations to enable them to define their policy needs
and to express their voices in the policy arena. IFAD also helps
to organize systems to ensure that their voices are heard. This
process is particularly important where rural elites or other interest
groups confiscate the democratic right of citizens to participate
in policy enactment. Support is also provided to strengthen the
capacity of policy-makers to include rural poor people in the policy-shaping
process; strengthening analytical capacity and the capability to
manage the political economy of policy change and enforcement is
part of this support.
In its work to strengthen rural poor people’s voices, IFAD
focuses on policies that secure access to: agricultural land and
water, forests and fisheries; technology for increased rural productivity;
inclusive rural financial markets; and local, national, regional
and global markets for goods and services. The new pro-poor policy
areas to be developed include policies that reduce risk and vulnerability
and policies that create market-based risk-transfer mechanisms.
To achieve these goals, IFAD has adopted an integrated country
programme approach that encompasses: annual consultations with governments
on key policies of importance to the rural poor; periodic reviews
of results-oriented country strategies; loan-funded investment projects;
grant-financed capacity-building programmes at the country level,
at times supported by regional knowledge management programmes;
country-level supervision and implementation support to facilitate
and monitor progress made towards the expected policy and institutional
change outcomes; and different types of evaluation that help define
the further policy innovation and knowledge development agenda.
In order to enhance its effectiveness in this policy change agenda,
IFAD forges partnerships with other development agencies to: harness
broader policy analysis and dialogue capacity; and increase harmonization
to foster alignment with national policies, strategies and systems.
This newsletter shares some of IFAD’s experiences in this
regard.
Thomas Elhaut
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Enhancing and mainstreaming
policy dialogue through country-owned poverty reduction strategies
Poverty
reduction strategy (PRS) processes set by 17 countries in the
Asia and the Pacific region have become the primary strategic
and implementation vehicles for reaching the national targets
of the Millennium Development Goals (MDGs). These countries include
Bangladesh , Bhutan , Cambodia , China , India , Indonesia , Kyrgyzstan
, Lao People’s Democratic Republic, Mongolia , Nepal , Pakistan
, Papua New Guinea , Philippines , Sri Lanka , Tajikistan , Timor-Leste
and Viet Nam . Afghanistan will soon join this list, as it is
currently developing its own framework for engaging in the PRS
process.
In line with IFAD’s established policy and its evolving
programme-based and policy-oriented approach, the Asia and Pacific
division is improving its strategic alignment with country-owned
PRS processes, expanding in-country partnerships and contributing
to donor harmonization. This is in response to the request of
several development partners for IFAD to promote the design and
implementation of pro-poor PRS processes, and to ensure that these
processes enable rural poor people to overcome poverty.
To achieve this goal, the Asia and the Pacific division will
increase IFAD’s pro-active support to the design and implementation
of PRS processes that take into account the needs of rural poor
people. It will also improve IFAD’s role as an authoritative
reference on PRS policies, programmes and operations in agriculture
and rural development.
Expected outputs of this strategy include:
- IFAD strategic alignment with the MDG national targets and
PRS processes further enhanced
- IFAD programmes integrated into PRS processes and viceversa
- strategic alliances established with selected partners that
have potential to add value to IFAD’s work
- greater participation by rural poor people and improved policy
dialogue in PRSs, country strategic opportunities papers (COSOPs)
and other strategy activities
- new rural poverty components introduced in PRSs
Nicola Favia, Senior Economist
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Regional
programme on policy analysis and dialogue at the country level
Pro-poor
policies are critically important in the fight against rural poverty.
However, despite IFAD’s long-standing commitment to dialogue
on rural policy issues, there are few examples of this happening
systematically. The experience of other development organizations
suggests that the use of non-lending instruments, especially country-specific
analytical work and related capacity building, can be critical
to developing effective processes of policy dialogue.
Taking this experience into account, IFAD has formulated a regional
grant-funded programme to strengthen policy work at country level
by focusing on:
- building capacity of key government institutions to develop
policy
- policy formulation and implementation in key areas of agriculture
and rural development
- country and regional policy dialogue and knowledge sharing
Countries in the region have begun to develop policies and strategies
with an explicit pro-poor focus. This is reflected to varying
degrees in their PRS papers, MDG needs assessments, and in the
establishment of institutions focusing on poverty issues. However,
the development of new policies and realignment of existing policies
towards the needs of poor people are often constrained by a country’s
capacity to conduct sound analysis of options for achieving objectives,
and their likely impact on the different stakeholders. This programme
is expected to partially fill that gap.
The goal of the programme is to assist eight developing member
countries in the region in reducing rural poverty through enhanced
institutional capacity to analyse, formulate and implement pro-poor
agricultural and rural development policies.
The programme objectives are to:
- build capacity of key government agencies in the analysis,
formulation, implementation and monitoring of pro-poor policies
- promote sharing of experiences and lessons learned from successful
pro-poor policies among countries through a knowledge network
and international fora
- promote greater participation of civil society and private
sector in pro-poor policy dialogue and advocacy
This programme will be implemented in collaboration with the
Food and Agriculture Organization (FAO) and participating countries.
Ganesh Thapa, Regional Economist
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Piloting household
microcredit in the Democratic People’s Republic of
Korea
DPR
Korea’s economy is centrally planned. Agricultural production
is based mainly on a collective system, under which cooperative
farms are both the main production units and the basic rural organizations.
Within this specific country context, IFAD is pursuing with the
government the broader agenda of pro-poor policy transformation
through interventions at the project level. The focus is on testing
innovative and pragmatic ways for supporting household-based initiatives
and activities. A pilot household microcredit scheme, which has
gained government recognition for its impact on rural poverty reduction,
is one of the successes.
IFAD introduced the pilot as part of the Crop
and Livestock Rehabilitation Project , which started in 1998.
It was implemented in the form of a Household Credit Revolving Fund,
managed by the Central Bank and targeted at household-based livestock
activities. All household loans were made for one year. A typical
use of the loan before the price increase in July 2002 was a mix
of animals such as two piglets, seven chicks, 11 rabbits, some duckling,
plus some feed. After the price adjustment, borrowers typically
purchased a piglet, a kid goat and a few chicks. Although some cooperative
farms made loans to all of their households, overall a strong preference
for targeting women was observed by the various project review missions.
Moreover, the institutional capacity of the Central Bank, at both
the central and county levels, has been strengthened for credit
operations. Manuals have been developed, which incorporate basic
modalities for sustainability of the credit scheme. Building on
the experience of the Crop and Livestock Rehabilitation Project,
the pilot of household microcredit scheme continues under the ongoing
Uplands
Food Security Project and the Italy-funded Household Sericulture
Pilot Project.
Tian Ya, Country Programme Manager
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Challenging
policy agenda faced by IFAD project in
Iran
The
Rural Micro-Finance Support Project has tested
different rural finance mechanisms in Iran . Access to rural finance
emerged as a development priority in a socio-economic study carried
out at the beginning of project design. While 83 per cent of rural
families expressed the need for credit, only 35 per cent of surveyed
households actually got access to credit. Access by rural youth
and women to credit was far lower: only 1.5 per cent of total samples.
The project has introduced solidarity groups to enable rural women,
youth and poor households to get access to credit and financial
services without the need for collateral or guarantee. Eighty per
cent of the 2500 rural people who have participated so far in the
project are first time borrowers, with an average age of 30 years.
Women’s participation has reached 53 per cent. The project
management unit, hosted by Bank Keshavarzi, is now assessing and
sharing the project results and discussing the policy issues required
for mainstreaming and scaling up successful elements of the project.
So far, the following topics have been identified and discussed:
- introduction of savings habits
- ensuring access by first time borrowers to credit
- active promotion of women and youth access to financial services
- targeting credit to poor households
- replacing collateral with joint liability
- developing interest rate policies
- enhancing monitoring mechanisms
The project is funded by the Italian Government and Bank Keshavarzi
(Agricultural Bank of Iran ) and is being executed by the International
Enterprise for Development of Rural Micro Finance Services (DRMFS-International).
Bank Keshavarzi provides over 70 per cent of institutional credit
disbursed in rural areas. Bank Keshavarzi and DRMFS-International
have also decided to test the Self-Help Group model that is expected
to address the issues of institutional and financial sustainability
of the groups. Bank Keshavarzi has invited IFAD to participate and
share its experience and knowledge in micro-finance at a national
seminar on “Micro-credit, rural development and poverty alleviation”,
to be held in Teheran in December 2005.
Mattia Prayer-Galletti, Country Programme Manager
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Creating
an enabling environment for pro-poor growth in
Indonesia
Efforts
to increase the capacity of communities to plan and manage their
own development need to be complemented by efforts to create an
enabling environment for pro-poor growth through responsive and
effective public policies, institutions and services. The Rural
Empowerment and Agricultural Development Programme in Central Sulawesi,
Indonesia , has internalized this kind of knowledge and applies
a value chain approach to agricultural development by building capacities
and providing incentives for all involved, including marginal poor
communities, to play effectively their part in the chain. With a
strong focus on creating the supporting environment for rural enterprises,
the programme will provide for applied rural technology and research,
private and public agricultural extension, linkages with private
sector companies and banks, investments in human capital and economic
infrastructure.
The programme also includes a policy action initiative, which will
support the government in policy coordination based on specific
requests from rural poor communities. It will also finance the establishment
of a National Programme Coordination Office, which will be in charge
of policy coordination and communication for all IFAD-financed operations
in Indonesia . The office will also be responsible for the establishment
of a monitoring and evaluation system, which will help to monitor
impact of all development and poverty reduction programmes of the
Ministry of Agriculture, including attribution of impact against
its PRS objectives and MDG targets. While institutional
arrangements envisage a strong partnership between the government
and NGOs at all levels of implementation, the programme also opens
up windows for policy dialogue and public debate on development,
financial management and governance issues, in addition to crucial
issues such as policies enabling access to land and forests and
other common and private property resources by marginal communities.
This US$37.9 million programme aims to increase the incomes and
improve the livelihoods of marginal communities in the fifth poorest
province of Indonesia. The programme financing agreement is at the
negotiation stage and the implementation is expected to start in
2006.
Rossella Bartoloni, Country Programme Manager
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IFAD
Farmers’ Forum
Representatives
of 20 rural producers’ organizations and four national apex
rural producers’ organizations participated in a workshop
organized by IFAD in Matale , Sri Lanka , on 9 and 10 October 2005
. The workshop is part of IFAD’s Farmers’ Forum initiative,
which gathers selected leaders of rural producers’ organizations
worldwide every two years, as a permanent side event to IFAD’s
Governing Council meeting in Rome .
In preparation for the second Farmers’ Forum, which will
take place in February 2006, the Asia and the Pacific Division will
organize another national workshop in the Philippines , and a regional
Farmers’ Organizations Workshop, to be held in Manila at the
beginning of December.
Based on the expressed views, needs and aspirations of selected
farmers’ and rural organizations, the purpose of the national
Sri Lanka workshop was to prepare selected leaders of farmers in
Sri Lanka to usefully and effectively contribute to the successful
outcome of the regional workshop. The purpose of the regional workshop
is to help IFAD deepen its knowledge on the extent to which the
overall policy framework in selected countries is conducive to poverty
alleviation.
More specifically, the purpose of the Sri Lanka national workshop
was to:
- provide farmers’ and rural organizations with a better
understanding of IFAD’s mission, goals, national strategy
and programmes
- provide IFAD with a better understanding of the roles, strengths,
needs and aspirations of farmers’ and rural organizations
- provide IFAD with a better understanding of the way farmers’
and rural organizations perceive the national legal and policy
framework for rural and agricultural development
- identify some of the themes that could be discussed at the
regional workshop
The workshop enabled IFAD to deepen its understanding of the specific
policy issues that are perceived by the rural organizations as constraints
to effective poverty reduction efforts, as well as of some of the
opportunities for improving the legal and policy framework. Some
of these issues will be brought to the attention of the government
during the next national consultations on the performance-based
allocation system (PBAS).
Due to the success of this first national workshop, the Asia and
the Pacific division is looking into the possibility of expanding
this initiative to other countries in the region in 2006.
Maria Donnat, Consultant
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IFAD
support for rehabilitation following the
Pakistan earthquake
On
8 October 2005, a devastating 7.6 magnitude earthquake struck
close to Muzaffarabad in Pakistan-administered Kashmir . Approximately
73 000 people died and as many as 3 million lost their homes.
With the winter snows beginning, and with relief workers still
far from reaching many
remote hillside villages, a second disaster from cold and disease
now
threatens. The unfolding situation is the largest disaster to
hit Pakistan in over 100 years. The disaster area overlaps with
three ongoing IFAD projects. The Northern Areas Development Project
has reported little damage in the project area, however the AJK
Community Development Programme and the North -West Frontier Province
Barani Area Development Project have both reported major damage
to project areas. Immediately following the earthquake, IFAD began
discussions with the Government of Pakistan on how IFAD resources
could be used to assist in the reconstruction efforts. An initial
proposal was made at the Government/Donor meeting in Islamabad
on 9 October. It has been agreed that IFAD will respond through
a dual-track approach.
- As a first step, IFAD and the Government are working on arrangements
for re-programming existing ongoing IFAD projects in the disaster
area. It is proposed that loan resources, some of which would
otherwise have been cancelled at loan closing, be redirected
to the
enormous task of re-building village and community infrastructure
and livelihoods. In this regard, IFAD's President has just approved
re-programming of approximately USD 23 million of existing project
resources.
- As a second step, IFAD is fast-tracking a community infrastructure
rehabilitation project for submission to the April 2006 Executive
Board for approval. This new project is expected to cost US$25
million.
Both step 1 and step 2 are being refined in close consultation
with Government and donors. IFAD is currently participating in
the damage assessment mission being led by FAO's Investment Centre,
and will coordinate with the multi-donor review work being led
by World Bank, Asian Development Bank and other donors. An Information
Note will be presented to IFAD's Executive Board on 12 December
2005 to provide a status report on IFAD's follow-up initiatives.
Nigel Brett, Country Programme Manager
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Useful links
About
IFAD
The International Fund for Agricultural Development (IFAD) is a
specialized agency of the United Nations, dedicated to eradicating
poverty and hunger in developing countries. Its work in remote rural
areas of the world helps countries achieve the Millennium Development
Goals. Through low-interest loans and grants, IFAD develops and
finances projects that enable rural poor people to overcome poverty
themselves.
IFAD tackles poverty not just as a lender, but as an advocate for
the small farmers, herders, fisherfolk, landless workers, artisans
and indigenous peoples who live in rural areas and represent 75
per cent of the world's 1.2 billion extremely poor people. IFAD
works with governments, donors, non-governmental organizations,
local communities and many other partners to fight the underlying
causes of rural poverty. It acts as a catalyst, bringing together
partners, resources, knowledge and policies that create the conditions
in which rural poor people can increase agricultural productivity,
as well as seek out other options for earning income.
IFAD-supported rural development programmes and projects increase
rural poor people's access to financial services, markets, technology,
land and other natural resources.
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