Making a difference in Asia and the Pacific: Special issue

IFAD is an international financial institution with an exclusive focus on agricultural development and rural poverty reduction, and more than twenty five years of people-centred and rural institutions-oriented experience. However, IFAD’s financial and human resources are limited when compared to the extent of poverty and the opportunities to reduce it.

In order to extend the impact of its activities beyond the reach of its own funds, enhance its human resources and increase its effectiveness, IFAD seeks partnerships. Working with other institutions expands resource flows to empowering poor rural people through sustainable access to productive resources and through productive investments. Partnering with others also enhances the knowledge that goes into these programme designs, and it expands the influence of the knowledge already acquired. In addition, it helps deepen IFAD’s understanding of innovation and knowledge management requirements. Having a better understanding of what innovations and knowledge other potential development partners are looking for helps IFAD become a more relevant institution beyond its own resources and programmes. Sharing of resources and lessons learned from loan and grant supported country programmes are highly relevant as governments and their development partners seek to scale up effective investment programmes, develop exit strategies and enact pro-poor policy choices identified during implementation. In partnership with others, the support to country processes for pro-poor policy development becomes more coherent and has lower transaction costs. This is why IFAD actively seeks strategic partnerships with a number of key partners in Asia and the Pacific.

One such key partner in the investment and policy arena is the World Bank, with which IFAD has developed a partnership management framework. This framework seeks to operate at four levels: sharing of analytical work and knowledge, joint policy initiatives, operational collaboration at the regional and country level, and institutional cooperation. The articles below illustrate these dimensions of the partnership. They also illustrate the tremendous potential of this partnership, which is the topic of our upcoming annual review meetings with the World Bank.

Partnership in the agricultural sector in Bangladesh

Recognizing that IFAD and the World Bank have been active in the agricultural sector in Bangladesh for many years, operations staff in both institutions have been sharing knowledge and lessons learned from past activities as they consider future investment options. Looking to the future and in response to a strong demand from the Government of Bangladesh, the World Bank and IFAD are currently cofinancing the preparatory process for the National Agricultural Technology Project.

A preparation mission conducted in June/July 2006 identified a number of key components likely to be incorporated in the project.

The Agricultural Research Support Component will aim to enhance the efficiency and effectiveness of the national agricultural research system (NARS). Specific activities to be implemented will include:

a Competitive Grants Programme, to be managed by the Krishi Gobeshana Foundation once it is established
sponsored public goods research by the Bangladesh Agricultural Research Council (BARC) and the agricultural research institutes
reforms to enhance the institutional efficiency of BARC and agricultural research institutes

The main objective of the Agricultural Extension Support Component will be to establish a decentralized, demand-led extension service, which is accountable to farmers for planning and delivery of extension support. Specific activities to be financed will include:

decentralization of extension planning, funding and implementation to the upazilla (sub-district) level, including the preparation of demand-led participatory extension micro-plans
strengthening of research-extension-farmer linkages
implementation of reforms to enhance institutional efficiency of the Department of Agricultural Extension, the Department of Livestock Services and the Department of Fisheries

The main objective of the Value Chain Development Component will be to promote value chains of selected high value commodities. Specific activities to be financed will include:

support for alternative market-led approaches to strengthening of farmer market linkages, including contract farming
knowledge management and human resource management
enhancement of institutional efficiency of the Horticulture Export Development Foundation (Hortex)

Given the critical importance of policy and institutional reforms for successful implementation of the project and for the achievement of development outcomes, the preparatory phase includes a number of key actions which need to be completed prior to project appraisal.

Firstly, the Cabinet of the Government of Bangladesh needs to approve an amendment to the 1996 BARC Act and Acts of individual institutes under the Ministry of Agriculture and the Ministry of Fisheries and Livestock. Once approved, the amendment would provide:

greater autonomy to the Governing Body of BARC, while maintaining the decentralized structure of the national agricultural research system with clearly defined roles and responsibilities of the management boards of the agricultural research institutes
responsibility to BARC for allocation of the government funds for priority research programmes undertaken by agricultural research institutes
authority to develop a proposal for the introduction of a uniform service rule for scientists working for the national agricultural research system including agricultural research institutes and BARC

Secondly, there is a need to establish an autonomous Krishi Gobeshana (Agricultural Research) Foundation to manage the Competitive Grants Programme.

It is envisaged that this new World Bank/IFAD financed investment project will be appraised in early 2007.

Mohinder Mudahar, Economic advisor, World Bank and Nigel Brett, Country programme manager
Read more about Bangladesh

Back to top

Promoting private veterinary services in Cambodia

Since 1996, IFAD has partnered with the World Bank in Cambodia through the Agriculture Productivity Improvement Project. This US$30.3 million project financed by a World Bank loan of US$22.2 million, an IFAD loan of US$4.71 million and a contribution of US$3.36 million from the Government of Cambodia was completed in June 2006. The IFAD loan financed the animal health and production component, while the World Bank financed the rest of the project.

According to the completion review, the project, among other achievements, has been remarkably successful in establishing a national regulatory framework and legislation for village based, privately operated and user-pays animal health services. This also includes training, registration and licensing of village animal health workers (VAHWs). Now the VAHW system operates nation wide. This development significantly improved the lives of poor people whose livelihoods depend on healthy animals. How did the World Bank and IFAD contributed to this success?

First, the appropriate design of the animal health and production component of the project met the critical needs of Cambodia, which had been devastated after decades of civil war and internal strife. In particular, the design addressed the following:

high animal mortality
lack of services for animal disease control and feed management in rural areas
poor capacity of the Department of Animal Health and Production of the Ministry of Agriculture, Forestry and Fisheries in sectoral regulation, policy and strategy development and legislation
lack of key capabilities such as an animal disease surveillance system

The project also met the needs of poor livestock producers for services, which improved their livelihoods by reducing the risks related to animal disease. The strategy of promoting a privatized animal health delivery service has proved to be a key factor in achieving project success.

Second, the World Bank provided supervision, which contributed to the successful implementation of the animal health and production component. The World Bank guided project implementation through supervision missions and periodic detailed technical reviews. Its findings and recommendations were clear and concise, and allowed timely adjustment of activities so that the project objectives could be met.

Third, effective communication between IFAD and the World Bank enabled timely solution of problems faced by the project. This included an early recognition of structural problems in the management of the project component within the Department of Animal Health and Production. As a result, the two agencies were able to resolve the management constraints and restore effective implementation arrangements.

Finally, IFAD and the World Bank also provided technical and policy support to the Government of Cambodia in promoting the development of private veterinary services to farmers. The World Bank and IFAD worked with the government to develop an umbrella project which linked activities of different actors into a single national legal framework. This collaboration resulted in the institutionalization of the VAHW system and a creation of a national strategy and policy for livestock development in Cambodia.

Martina Spisiakova, Newsletter coordinator

Supporting agricultural technology adoption in disadvantaged districts of India

In collaboration with the World Bank and the Indian Council of Agricultural Research (ICAR) under the Government of India, IFAD is developing a grant-funded project in conjunction with “Component 3” of the World Bank-supported National Agricultural Innovation Project.

The core objective of Component 3 is to contribute to improvements in the incomes and well-being of farm families living in selected disadvantaged districts of the country. These disadvantaged districts were identified by the Planning Commission of India, and also include the districts covered by IFAD-financed projects in India. The main objective of the IFAD grant will be to accelerate the identification, validation and dissemination of agricultural technologies that will enhance productivity and conserve resources.

The project interventions will focus on resource poor people, including small and marginal farmers, women, landless and other socially excluded people. The proposed IFAD grant of US$1 million over 3 years will complement the estimated financing of US$73 million to be provided by the World Bank and the Government of India over 6 years for Component 3.

The IFAD grant programme was developed in close consultation with ICAR, the World Bank, four IFAD-financed investment projects, farmer groups, state agricultural universities and NGOs. To accelerate technology adoption and transfer to poor farmers in order to improve their livelihoods, this programme will facilitate access to international experience and best practices. This will be achieved by encouraging organizations in the public and the private sector, which have the ability to address specific livelihood issues, to collaborate through multi-disciplinary and multi-institutional partnerships (“Consortia”). Such partnerships will address constraints faced by poor farmers in increasing productivity, profitability and sustainability of agricultural production systems. The International Rice Research Institute (IRRI) will be the implementing agency of this project. It will coordinate activities financed under the grant facility and will ensure timely inputs from the participating international institutions, mainly international agricultural research centres.

For many years the World Bank and IFAD have been active in the microfinance sector in Pakistan. Building upon this experience and recognizing the unique relationship between the World Bank and the Pakistan Poverty Alleviation Fund (PPAF), in January 2006 the World Bank agreed to act as a cooperating institution for IFAD’s new Microfinance Innovation and Outreach Programme approved by IFAD’s Executive Board in December 2005.

This programme was designed in close partnership with the World Bank. Technical staff from the World Bank’s office in Islamabad participated in the IFAD appraisal mission and in loan negotiations. The programme design complements the core PPAF microfinance programme financed by the ongoing World Bank-supported Second Poverty Alleviation Fund Project. The new IFAD funded programme will focus on innovation in the microfinance sector and the lessons learned will be fed straight back into the core PPAF programme for rapid scaling up of successes. To enhance the synergy between both programmes, it has also been agreed that IFAD will participate in the World Bank’s supervision missions for the Second Poverty Alleviation Fund Project.

IFAD's partnership with the World Bank was further developed following the devastating earthquake in northern Pakistan in October 2005. Both institutions agreed to finance an earthquake rehabilitation programme through two projects. IFAD is financing the Restoration of Earthquake Affected Households and Communities Project while the World Bank provided additional financing for earthquake rehabilitation through the Second Poverty Alleviation Fund Project. The programme will also be implemented by the Pakistan Poverty Alleviation Fund.

This collaboration between IFAD and the World Bank led to significant sharing of resources during the design phase to ensure an efficient and rapid response. Notably, it was agreed that both projects will follow an identical Project Implementation Manual prepared by an IFAD design team. Furthermore, as with the Microfinance Innovation and Outreach Programme, the World Bank recently agreed to act as IFAD's cooperating institution for this new IFAD project.

Azmat Isa, Task team leader for the Pakistan Poverty Alleviation Fund, World Bank and Nigel Brett, Country programme manager
Read more about Pakistan

In mid-2003, IFAD and the World Bank were simultaneously preparing ambitious poverty alleviation interventions for structurally poor rural people in the dry zones of Sri Lanka. The World Bank was formulating the US$69.8 million, 12-year Community Development and Livelihood Improvement "Gemi Diriya" Project. IFAD was formulating the US$30.4 million, 7-year Dry Zone Livelihood Support and Partnership Programme.

Initially, there was some concern among the World Bank staff about possible risks of duplication and waste of resources, and dilution of messages wherever the two projects would overlap in the same locality. However, when IFAD shared with the World Bank the Note of Understanding between the Government and the IFAD formulation mission signed on 28 May 2003, it provoked a tri-partite debate that eventually led the parties to identify synergies between the two proposed interventions. The following consensus emerged:

First, the IFAD and the World Bank projects overlapped in Moneragala and Badulla – two districts characterized by very high levels of poverty. The development needs in these two districts far exceed those that the Government of Sri Lanka, the World Bank and IFAD could provide together. It was recognized that the mandates of both institutions require that both of them must support poverty alleviation efforts in these very poor districts and that there is plenty of scope for joint and coordinated support activities.

Second, under the Community Development and Livelihood Improvement “Gemi Diriya” Project, the World Bank’s support focuses on community demand-driven infrastructure development. Under the Dry Zone Livelihood Support and Partnership ProgrammeIFAD focuses on providing more direct support to the poorest farmers, landless and other poor rural people for their livelihood improvements such as irrigation, micro-enterprise development, income generating activities and marketing. The parties agreed that, if coordinated effectively, these different types of interventions will complement each other in ways that will lead to greater impact than if each agency operates separately.

Third, to achieve maximum synergy between the two interventions, IFAD recommended the World Bank to become the co-operating institution for the IFAD programme. Despite the Bank not being involved in the programme design (a scenario they are not usually amenable to), the government and the Bank accepted this recommendation.

Both the World Bank’s project and IFAD’s programme are fully functioning since early 2006. Most of the problems faced by the collaboration effort have been resolved and a good deal of experience and goodwill is being generated for the benefit of IFAD, the World Bank and the Government of Sri Lanka. Eventually this will benefit the beneficiaries of both interventions. Furthermore, the coordination between the two projects is increasingly serving as a solid foundation upon which further partnerships between IFAD and the World Bank in Sri Lanka can be built. New areas are being explored including finding ways of working together in promoting the development of the smallholder and government-owned estate sectors of the country.

Heralding a new era of development partnership in Sri Lanka, in 2005, IFAD entrusted the World Bank with supervision and loan administration responsibilities for the IFAD-funded and designed Dry Zone Livelihood Support and Partnership Programme. This was a major departure from the usual IFAD practices adopted in IFAD-managed projects in Sri Lanka.

The collaborative arrangement between IFAD and the World Bank is a major step in harnessing the strengths and common interests of both institutions. It allows the Bank’s staff to work closely with IFAD staff, learn about development strategies adopted by the two institutions and to understand their strengths and derive synergies. The collaboration specifically allows IFAD and the staff of the concerned IFAD-supported project to benefit from the experiences of the World Bank’s poverty reduction projects in Sri Lanka. This is particularly true with respect to the Community Development and Livelihood Improvement “Gemi Diriya” Project, which is located in areas also covered by the IFAD programme.

The early implementation progress of the IFAD’s Dry Zone Livelihood Support and Partnership Programme has been negatively affected by a delay in the first disbursement of funds into the project account. This is partly due to inadequate consultations between the World Bank and IFAD on the flow of funds and fiduciary arrangements and procedures to be adopted for the programme. Had the World Bank become involved in the programme from the inception stage, a closer partnership between the two agencies would have emerged which in turn would have helped to avoid the problem. Indeed, early collaboration would have also helped to ensure a better understanding of the programme design by the World Bank and to enhance the chances of greater synchronization with the World Bank’s Community Development and Livelihood Improvement “Gemi Diriya” Project. In this way, the two institutions can share experiences and knowledge more efficiently and greatly improve their development impact.

Overall, there is great potential for further development of the partnerships between the World Bank and IFAD. Improved partnership would provide a solution to much needed donor coordination in Sri Lanka.

The opportunity offered to a World Bank task manager, responsible for the Dry Zone Livelihood Support and Partnership Programme, to participate in the IFAD Annual performance review workshop in Bangkok from 20-23 June 2006, provided a unique exposure to rich experiences gained by IFAD staff at all levels and a possibility to share World Bank’s experiences in the region. The participation of the World Bank staff also increased the understanding of how IFAD approaches problems in rural development and how it gauges the effectiveness of development programmes. It also allowed the World Bank task manager to gain insights into IFAD operations in other countries in the South and South East Asia.

Terrence Abeysekera, Task manager, World Bank, overseeing the IFAD Dry Zone Livelihood Support and Partnership Programme

Joint IFAD-World Bank analytical activities: coordinated review of the poverty reduction strategies

IFAD’s Asia and Pacific Division has recently completed a review called “The Rural Focus on MDG-based Poverty Reduction Strategies in Asia and the Pacific”.

The methodology used for the review was originally developed by the World Bank’s Department of Agriculture and Rural Development and published under the World Bank’s “2005 Review of Rural Development Aspects of PRSPs and PRSCs 2000-2004”. The visit of the Asia and the Pacific Division’s senior economist to Washington in November 2004 and an assignment of a World Bank consultant in Rome in spring 2005, enabled the division to expand and deepen this methodology further.

In “The Rural Focus on MDG-based Poverty Reduction Strategies in Asia and the Pacific”, IFAD used this methodology to review poverty reduction strategy (PRS) processes of 17 countries in the region and to demonstrate:

The Asia and the Pacific Division circulated the draft review in the World Bank for its quality control and dissemination. Among other things, its results constituted an analytical underpinning for a review conducted by the World Bank and International Monetary Fund (IMF) called “2005 Review of the Poverty Reduction Strategy Approach: Balancing Accountabilities and Scaling Up Results”. This review concluded that “PRS documents have not considered the full range of policy actions required for growth and poverty reduction. They focus largely on public expenditure. And within the realm of public expenditure, they pay more attention to health, education, and other social programs than to the poverty reduction potential of spending in other areas such as infrastructure and rural development.”

The Asia and the Pacific Division wishes to announce a new series of occasional papers on emerging thematic issues in the region. The papers will be published bi-monthly and will contribute to IFAD’s efforts to share the knowledge and experience emerging from its activities and those of its partners in the region with a wider audience. All papers will be reviewed by an editorial team drawn from within and outside IFAD.

The paper reviews progress towards attaining the first MDG of reducing extreme poverty and hunger, assesses the prospects for achieving it by 2015 and identifies priorities for accelerating the process. Despite impressive gains in the Asia and the Pacific Region, represented by high economic growth and poverty reduction over the last three decades, the region still accounts for two thirds of the world’s poor people. Therefore, achieving the goal of halving the proportion of the world’s extremely poor people by 2015 depends to a large extent on this region’s performance in further reducing poverty over the next 10 years.

Several studies have concluded that the first MDG will be achieved in many countries within the region and the region overall. However, these studies were based on projections of past trends and did not consider how agricultural growth, trade and institutional factors influence income growth and poverty levels. This limits the usefulness of their policy insights. This study, based on an econometric analysis, fills that gap in knowledge of future trends and deepens our understanding of the impact of policy changes in attaining the MDG of poverty reduction.