Message from the Director
Wide-ranging consultations harvest solutions to the evolving face of rural poverty
The face of rural poverty is constantly evolving due to factors such as climate change, rising energy and food prices, the production of biofuels, and increasing migration and urbanization. Given these changing sets of conditions, those of us who design rural development strategies and policies are called upon to devise fresh, relevant solutions.
Poor rural people, particularly smallholders, play a decisive role in developing sustainable responses to these challenges. Any policy aimed at bringing prosperity to the 2.1 billion poor men and women living in rural areas must therefore be based on an accurate, up-to-date baseline analysis of rural conditions and of effective survival strategies.
This is precisely the objective of Harvesting solutions: How poor rural people overcome poverty, a new IFAD publication that will be available in February 2009. This groundbreaking publication is the outcome of a wide-ranging consultative process conducted during 2008 with IFAD partners around the world.
The central premise of this publication is that, under today’s rapidly changing conditions, there are no predefined pathways for people seeking to escape rural poverty. All stakeholders must therefore make a concerted effort to empower poor people in rural areas to address the challenges confronting them. Participants in the consultative process agreed that this empowerment depends upon ensuring that the poorest segments of the population have more and better access to markets, agricultural services and natural resources, to public policy decision-making processes, and to non-agricultural employment opportunities in rural areas.
Consultations have been held at five regional meetings. The meeting for Latin America, which was hosted by Quito, Equador in August 2008, was attended by 46 representatives of economic and social organizations and associations in 16 countries. In this newsletter, I would like to share with you the main recommendations that came out of this regional meeting, together with excerpts from remarks made by participants.
Josefina Stubbs
Director, IFAD’s Latin America and the Caribbean Division
Special feature: IFAD’s new groundbreaking rural poverty publication
Joining forces: the key to success
The importance of pooling efforts and drawing upon local initiatives, knowledge and resources was repeatedly underscored during the regional consultation held as part of the preparatory process for producing Harvesting solutions: How poor rural people overcome poverty. “Partnering is the only way to escape poverty,” said Gerardina Pérez, President of the National Association of Rural Women Agroindustrial Producers of Costa Rica. Ronnie de Camino, Deputy Director of the Tropical Agricultural Research and Higher Education Center (CATIE), advocated the adoption of an integral approach: “Rural development strategies should view the relevant geographical area as a package of goods or assets. Its forests, rivers, land, infrastructure, and human resources are capable of producing food or generating income that can be used to buy food. But the production of food alone will not lift us out of poverty.”
The State can also be a good ally, said Patricia Areco of the Department of Agriculture, Livestock, Fisheries and Foodstuffs of Argentina. “Thanks to long-term support policies for the sector, currently 66 per cent of the country’s farms are in the hands of small-scale producers.” Some people are afraid to work with big operations, but they are interested in working with small-scale producers, said Mark Lundy of the International Center for Tropical Agriculture (CIAT). “It could be a very good idea to accept this challenge and seek to establish ties along these lines. But how should we go about doing this? What sorts of clear rules are there? How should these kinds of businesses be organized? Large enterprises should be good business partners. They have to add value. Perhaps we should stop backing small ventures and start to think about scaling up.”
The role of smallholders in sustainable natural resource management should also be recognized, as should their efforts to identify income-generating opportunities for the poorest members of the population. “As a group, we began to combat deforestation. Then we put our heads together and realized that what the people knew how to do was to plant cocoa,” explained Nestor Lemos, Coordinator of the Cocoa Producers Association of Northern Esmeraldas Province (APROCANE) in Ecuador. “Today, cocoa is a steady source of income for the small farmers of Esmeraldas Province.”
Hugo Yanque, Executive Director of the Microfinance Unit of the Arariwa Association of Peru, suggested that relevant solutions are vital for solving the problems confronting local population groups. “We have 15,000 clients in Cuzco who contribute approximately US$8 million. The important point is to offer services that meet their needs, such as fast-disbursing loans that will allow them to take advantage of business opportunities or even to organize the celebration of a local holiday. Rural microfinance has great potential.” |
Harvesting solutions: How poor rural people overcome poverty, is an upcoming IFAD publication, available in February 2009, that focuses on poor rural women and men as diverse agents of their own welfare and development. It examines the challenges they face in a dramatically changing environment and discusses their positive experiences in overcoming these challenges. The publication begins with an overview of rural poverty today. Its five main chapters address five sets of challenges that focus on poor rural people’s
- access to, sustainable management of, and capacity to benefit from, natural resources
- access to, and capacity to benefit from, agricultural services
- access to, and capacity to benefit from, remunerative and equitable markets
- access to, and capacity to benefit from, opportunities for non-farm employment and enterprise development
- access to, and capacity to participate effectively in, governance processes and in policymaking
A broad consultative process
The publication is the result of a broad consultative process within and beyond IFAD. The steps include:
- Background papers for chapters, and development of a conceptual framework, structure and key messages in collaboration with experts from development and research institutions.
- Regional consultations to help ensure that the publication is accountable to its various stakeholders, especially poor rural people. Participants included stakeholders from IFAD-supported country programmes, regional networks and organizations of poor rural people.
- On-the-ground scouting and stocktaking efforts to identify ‘success stories’ that document effective and sustainable responses, particularly those developed by poor rural people, to emerging challenges. Scouting and stocktaking involved IFAD country programme managers and national partners, regional networks and regional programmes, non-governmental organizations, farmers’ and rural producers’ organizations, indigenous peoples’ organizations and rural women’s associations.
A key reference for development practitioners
The publication will be a valuable reference for a wide range of stakeholders in rural development and poverty reduction, including policymakers, donors, development organizations, private-sector foundations and enterprises, and rural organizations in all regions where IFAD works.
Principal conclusions reached at the Latin American regional consultative meeting
In August 2008, 46 representatives of economic and social organizations and associations in 16 countries met in Quito, Equador. Task forces identified five challenges and developed the following main conclusions:
- Market access is a crucial factor in stepping up the pace of development in impoverished rural areas because markets can serve as a source of income, opportunities, jobs and commitment. Markets should be linked up to the corresponding geographical areas, and complementarities among small-scale producers, intermediaries and markets need to be sought out. In addition, integrated public policies should be developed, new types of markets (knowledge, environmental resources, job markets) should be promoted, new corporate governance models should be adopted, and venture capital funds should be created.
- Access to natural resources is not enough in and of itself: it should be coupled with mechanisms for producing and marketing the products derived from access to land, forests, rivers and pastureland. Other recommendations included the promotion of regulations to safeguard land tenure, the advancement of public policies to support production and marketing, and the adoption of measures to ensure the availability of the financing needed for sustainable management.
- Rather than confining access to services to the agricultural sector, the range of rural services should be broadened to include those required to meet financial needs (such as life insurance and savings accounts) and to promote human resource development through measures that will build up people’s productive and management capacities.
- Even though non-agricultural rural employment now represents one half of total job creation in rural areas, the supply of support services continues to fall short of what is needed. Greater support should be provided via public policy and private investment.
- In order to promote participatory governance, the sphere of action of local government must be reinforced and the creation of sound organizations capable of negotiating and proposing policies must be supported.
The representatives attending the meeting in Quito identified a number of other issues, in addition to these five main topics, that pose significant challenges in terms of rural poverty reduction in the region. These issues include equity, migration, capacity-building, the establishment of legal title deeds, local leadership development and public institution-building.
The participants also took advantage of the opportunity to discuss the work of IFAD in the region and to provide guidance in this respect. They recognized IFAD’s ability to promote innovative initiatives and to help mainstream them into national policies, as well as its capacity for creating forums in which small-scale producers and national governments can engage in policy dialogues.
In its recommendations, the task force underscored the need to increase IFAD’s presence on the ground via direct supervision of projects and country offices and to seek out new financial instruments, such as venture capital and investment funds, to meet the specific needs of IFAD creditors.
Read the report of the Quito consultation (In spanish only)
Read results of the thematic working groups (In spanish only)
Read the information note on the report
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News
New IFAD programmes, projects and grants in Latin America and the Caribbean
Approved during 2008:
In Costa Rica IFAD will provide a US$9.19 million loan to finance a programme aimed at strengthening income-generating activities of small-scale producers, subsistence fishers, indigenous communities and jobless young people living in regions characterized by environmental fragility and high rural poverty levels. The programme will help develop local enterprises, establish sustainable agribusinesses and improve access to competitive markets. 25,400 people will benefit directly.
In Honduras and Nicaragua, IFAD will provide additional funds for ongoing projects to increase food security and help small-scale producers participate in a sustainable response to the current food crisis. The project forEnhancing the Rural Economic Competitiveness of Yoro in central Honduras will receive US$2.27 million to assist an additional 1700 families to increase their grain production and expand their access to seeds, fertilizers and technical assistance. The Small-scale Producers in Value Chains and Market Access project in Nicaragua will receive a US$0.6 million loan and a US$0.6 million grant. The supplementary financing will allow 1,200 additional smallholders to improve their production capabilities and incomes.
In Haiti, IFAD is making available US$10 million from ongoing projects in the country to distribute seed and strengthen seed multiplication programmes, mainly for hill-side small-scale producers.
In the Southern Cone subregion, a US$1.08 million grant for the Institutional Consolidation of the Commission on Family Farming of the Common Market of the South (MERCOSUR).
Projects and programmes to be presented to the Executive Board of IFAD for approval in December 2008:
- Belize: A national programme to support rural savings and loan cooperatives as a means of making more financial resources available to poor rural population groups.
- Ecuador: A project aimed at building up the human, social, economic and cultural assets of Afro-Ecuadorian, indigenous and mestizo population groups in Ibarra-San Lorenzo Province.
- Guatemala: A programme in the northern region of the country whose aim is to convert subsistence economic activities into profitable business ventures able to compete in the market, to build rural roads and other infrastructure, and to upgrade the organization of natural resource management.
- Mexico: A community-based forestry development project designed to improve living conditions for poor households in the states of Oaxaca, Chiapas and Campeche.
- Bolivarian Republic of Venezuela: A project to improve the living conditions of the Warao indigenous peoples in the Orinoco delta, which will work with indigenous community councils to build capacity and lay the foundations for an autonomous, local development process.
In brief
Campesinas in Chumbivilcas show off their insurance policies |
Rural families in Peru receive life insurance policies for the first time
Thanks to a groundbreaking initiative undertaken in collaboration with private insurance companies as part of a project focusing on the southern Peruvian sierra, 3,600 campesino households are now eligible for death and accident benefits. The goal is for 15,000 participating households to be insured by the end of this phase of the project.
Insurance coverage is an important tool for combating poverty. If poor households receive such coverage, they will not be forced to sell the few assets they have in the event of the illness or death of a family member.
Sierra Sur project
Virtual rural press network in Latin America and the Caribbean is born
Latin American journalists now have a new virtual forum in which they can share knowledge and experience relating to rural development. The blog is called the “Red Prensa Rural” and has been on line since October.
The network was launched last July as an initiative of the meeting of journalists organized by the Latin American Center for Rural Development (Centro Latinoamericano para el Desarrollo Rural) - International Farming Systems Research Methodology Network (RIMISP), which took place in June 2008 in São Paulo, Brazil.
The network’s objective is to propose better ways to provide more press coverage for rural and local development issues of concern to the region. Its members include journalists who work for Latin America’s principal mass media.
Ambassador Vásquez talks with a participant of the ACUA Programme in Palenque, Colombia |
United States Ambassador visits IFAD projects in Colombia
Ambassador Gaddi Vásquez, United States Representative to the United Nations Organizations in Rome, visited Colombia this past September as part of a tour of a number of countries in the region.
During his tour of Colombia, Ambassador Vásquez had the opportunity to learn about the cultural heritage of Afro-descendant communities participating in the IFAD-funded Regional Programme in Support of Rural Populations of African Descent in Latin America (ACUA).
He also visited some of the microenterprises set up under the Oportunidades Rurales Programme, an initiative of the Government of Colombia that is aimed at promoting employment in rural areas of the country.
ACUA Programme website
Stories from the field
Strategic partnerships breathe life and hope into an impoverished community in Brazil
With access to water, the people of Sombras Grandes have transformed a dry grey desert into a lush green oasis |
In the semi-arid northeast of Brazil, the IFAD-supported Dom Helder Camara project works with local governments, farmers’ organizations, civil society associations and state companies to improve poor people’s living conditions. Together they have brought safe water to communities, opened new markets for their farm products, trained young people and adults, and helped women obtain identity documents.
- Read full story
- Rural poverty in Brazil
- IFAD operations in Brazil
- Sustainable Development Project for Agrarian Reform Settlements in the Semi-Arid North-East of Brazil
- IFAD in the MERCOSUR area
- Dom Helder Camara project
Risks pay off in Colombia microenterprise programme
In a technical assistance course, project participant Elvira Gómez learned to use natural dyes that produce pastel greens, tans and pinks |
In 1997, a pilot programme in Colombia to promote rural microcredit was about to close because urban experiences with microcredit were not working in a rural setting. But then IFAD stepped in and encouraged programme staff to innovate and take risks. Ten years later, the programme was considered a model for action and knowledge both nationally and internationally. Its success is a result of an organizational process that succeeded in linking the entire chain, from production to processing to marketing. Phase II is now under way.
Remittances: spreading the benefits in El Salvador
Women are often the prime beneficiaries of remittances, using the money sent by their children to start small businesses. |
For generations, poor people around the world have left their homes to seek better wages abroad. Today, the money they send home totals an estimated US$200 billion a year. In Latin America, remittances are worth more than direct foreign investment, official development assistance and foreign aid combined. They have a huge potential to reduce rural poverty. With this in mind, IFAD is exploring ways to lower the transaction costs of sending money home and is working with governments to make sure the money is used productively.
- Read full story
- Rural poverty in El Salvador (Spanish only)
- IFAD operations in El Salvador (Spanish only)
- Remittances: spreading the benefit
- Remittances and rural development programme in Latin America and the Caribbean
- Financing Facility for Remittances
- Remittances and rural development (discussion paper)
- Cash flow fever (video documentary on remittances in El Salvador)
In Argentina, cooperatives show there is strength in numbers
Watching how bees work together for a common purpose gave bee-keeper Carlos Dimitruk the idea of forming a cooperative |
Argentina, a middle-income country, is the third largest producer and second largest exporter of agricultural products in Latin America. But for people living in the country’s remote rural areas there are few opportunities to reap the benefits of this thriving sector. Two IFAD-supported projects in the northeast and northwest regions have worked to help small producers form strong cooperatives to obtain better access to credit and technical assistance and find new markets for their products. With more options at home, fewer young people are migrating to cities in search of work.
- Read the full story
- North Western Rural Development Project (PRODERNOA)
- Rural Development Project for the North-Eastern Provinces (PRODERNEA)
- IFAD in Argentina (Spanish only)
- Rural poverty in Argentina (Spanish only)
‘Learning routes’: sharing knowledge about market access in Ecuador and Peru
Members of a weavers’ association talked to learning route participants about the ups and downs of making their business a success |
Sharing, discussing and learning from successful and less successful experiences is the ultimate goal of all learning organizations. Since 2001, with the support of IFAD, a Latin American training organization specialized in rural development has promoted an innovative learning approach known as ‘learning routes’. Participants of a learning route on market access in poor rural territories visited the business enterprises of five associations in Ecuador and Peru and took valuable lessons back to their own activities and communities.
- Read the full story
- Rural poverty in Ecuador | IFAD operations in Ecuador
- Rural poverty in Peru | IFAD operations in Peru
- Access to markets and rural poverty
- PROCASUR
Browse stories from the field collection
About the regional programmes
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As a complement to its programmes and projects in the region, IFAD’s activities portfolio includes 36 grants worth more than US$19 million. Almost 70 per cent of them are used to finance regional programmes aimed at strengthening the capacity of the national institutions responsible for designing and executing sustainable rural development policies.
Regional Programme in Support of Rural Populations of African Descent in Latin America (ACUA)
The ACUA Programme is an IFAD initiative executed by the Convenio Andrés Bello (CAB), an organization headquartered in Bogotá, Colombia. Its purpose is to enhance the human, social, economic and cultural assets of peoples of African descent and their organizations by furnishing support services that will help them to improve the initiatives they undertake and contribute to the design of development policies for the people of African descent in Latin America.
This US$2 million programme will be conducting activities in Brazil, Colombia, Ecuador, Peru, the Bolivarian Republic of Venezuela, Bolivia and Panama from 2008 to 2012.
ACUA recently sent out a request for applications as part of a project designed to fund the best local development initiatives involving a cultural identity component. Of the 157 proposals that were submitted, 13 were selected. These initiatives will receive subsidies of up to US$300,000 to help develop their work plans.
The programme will also promote learning and knowledge sharing among Afro-descendant communities through:
- The design and implementation of learning routes.
- Research on the contributions made by groups of African descent in the Americas.
- A programme to showcase the best local development initiatives having a cultural identity component that have been launched by Afro-descendant peoples of the region. The programme will make use of various types of media and communications channels to increase the visibility of these initiatives. It will also seek out mechanisms for strengthening these projects and contributing to their development.
For more information, please visit the website of the ACUA Programme
Specialized Meeting on Family Farming held by the Southern Cone Common Market (MERCOSUR)
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Since 2000, IFAD has been backstopping the MERCOSUR countries in their efforts to promote dialogue between small-scale producers and governments in support of the family farming sector.
Eight years on, family farming is high on the national and regional political agendas. At the regional level, family agriculture has been recognized by the Common Market Group (GMC), MERCOSUR’s highest executive body, as a socio-economic sector to be addressed by public policies. At the national level, governments have created new agencies devoted to family farming issues. The most important advance of all, however, is that small-scale producers in MERCOSUR member and associate member countries are now playing a leading role in their own development.
Two IFAD grants (IFAD/MERCOSUR and IFAD/REAF) have supported the Specialized Meeting on Family Farming (REAF) as a consultative group of MERCOSUR. Last September, IFAD approved the third and final grant of US$1.08 million to consolidate the REAF, prepare an impact assessment, and disseminate lessons learned to other IFAD partners in Latin America and other regional groups.
At the next biannual meeting of REAF in Brazil in November, the participants will discuss:
- the report to be submitted to the GMC on public policies in each country, which recommend harmonizing policies to promote the role of family farming in supplying the market and ensuring regional food security.
- a recommendation to the GMC regarding the creation of a regional fund for family farming to ensure the sustainability of the REAF once financial support from IFAD has come to an end.
- REAF’s position regarding the current status of land tenure and use, and trade facilitation instruments for family farm products in the region.
- progress of national family farm registries in accordance with MERCOSUR guidelines and standards
News briefs on other regional programmes
Diálogo Rural in Central America: On 24 September, the Central American Council for Agriculture (CAC) met in Managua, Nicaragua. The Council is the highest-ranking body in which the subregion’s ministers of agriculture are represented. The ministers recognized the work carried out by the Diálogo Rural Programme . This IFAD-supported programme helps campesino organizations build their capacity for engaging in dialogue. To this end, the Council was asked to recognize this initiative as a regional forum for dialogue between the CAC and small-scale producers in Central America.
The programme has been working in Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua since 2007. The programme focuses on adapting the success of the IFAD/REAF programme on policy dialogue in the MERCOSUR subregion to the situation in Central America.
Its primary objective is to set up and operationalize an effective mechanism for stimulating a policy dialogue among organizations representing the interests of poor rural households and between those organizations and governmental and other public-sector agencies within the framework of free trade agreements, trade liberalization accords and other regional trade conventions.
FIDAMERICA has just published three studies on successful strategies for the participatory management of local initiatives and projects:
In Peru, it analyzed local resource allocation committees (Comités Locales de Asignación de Recursos, CLAR), which have proved to be a successful mechanism for allocating public funds on a competitive basis.
In south-eastern Peru, the Puno-Cuzco Corridor Project used the CLAR to earmark resources for the best development proposals submitted by associations and communities in the Andean corridor. The positive outcomes of this project have encouraged local governments to institutionalize similar competitive initiatives as an integral component of their rural development policies.
Read the complete document (Spanish only)
Watch the video
In El Salvador, an analysis has been carried out of the promising results from the PRODAP II and PREMODER projects, which are working to integrate young people into technical assistance management processes.
Read the complete document (Spanish only)
Watch the video
In Panama, the role played by local committees in coordinating activities under the Rural Development Project for Ngöbe-Buglé Communities and Poor Rural Neighbouring Districts in specific geographical areas is being studied.
Read the complete document (Spanish only)
Watch the video
Programme for Strengthening the Regional Capacity for Monitoring and Evaluation of Rural Poverty-Alleviation Projects in Latin America and the Caribbean (PREVAL) will soon be launching a CD on building evaluation capacities. The CD contains a total of 53 documents in Spanish, English and Portuguese on experiences and progress in monitoring and assessing development initiatives. It also includes a manual containing organizational guidelines for the development of evaluation capacities, as well as links to web pages around the world that deal with evaluation capacity-building and training.
PREVAL website
Other regional programmes under implementation in Latin America and the Caribbean
Latin America and the Caribbean in IFAD: The role of middle-income countries
Middle-income countries have an increasingly important role to play in the world. They account for nearly 40 per cent of the segment of the global population that is living on less than two dollars a day. In all, 28 of the world’s 95 middle-income countries are located in Latin America and the Caribbean.
Middle-income countries |
|
Latin America and the Caribbean |
28 |
Europe and Central Asia |
22 |
East Asia and Pacific |
13 |
Near East and North Africa |
11 |
Africa |
10 |
Southern Asia |
2 |
Total MICs |
95 |
Total |
185 |
The World Bank defines middle-income countries as those having a per capita gross national income (GNI) of between US$906 and US$11,115 per year. More than half of the countries in the world currently fall into that category. All the countries in Latin America and the Caribbean are included in this category except Haiti, whose per capita GNI in 2006 was only US$490.
Middle-income countries are strategic partners of IFAD, and the interest they pay on their loans, most of which are at market rates, constitute a significant contribution to its financial flows. They are also an important source of innovative experiences and knowledge that enrich IFAD’s work. One of
IFAD’s major assets is its access to a wide range of diverse initiatives for underpinning rural development in all regions of the world.
Middle-income countries have widely varying characteristics, but they nonetheless share a number of features:
- Very high levels of inequality, particularly in Latin America, which seriously hinder poverty reduction efforts
- A major shift in agroindustrial markets, along with mounting foreign investment and investment by supermarket chains, all of which poses new challenges for agrarian producers
- Greater access to financial markets, particularly in upper-middle-income countries
- The presence, in many of these countries, of a large percentage of indigenous people who possess significant cultural assets but who generally exhibit the lowest living condition indicators
The international community held three global conferences in 2007 and 2008 in an effort to identify specific tools and mechanisms for promoting development in this group of countries. In the second of these conferences, which took place in El Salvador in October 2007, the participating countries adopted the Consensus of El Salvador on Development Cooperation with Middle-Income Countries, which sets forth the fundamental principles that should guide cooperation with such countries. The Consensus also urges the international community to continue to support these countries’ efforts to achieve the Millennium Development Goals.
In line with the international community’s efforts in this area, IFAD is considering the possibility of instituting a number of changes in the financial products that it offers in order to bring them more closely into line with the needs of these countries. These modifications will include:
- Maintaining its regular types of loans at a level comparable to that of other international financial institutions
- Offering a broader array of financial products
- Lowering loan preparation and execution fees
- Reducing IFAD strategy development costs for middle-income countries
In September 2008, IFAD notified its Executive Board of the decision to reduce its interest rate to 4.27 per cent for market-rate loans and to 2.14 per cent for intermediate loans.
IFAD is also placing greater emphasis on products and services relating to the generation and dissemination of knowledge and on the promotion of innovation. It is working to foster regional cooperation among developing countries and triangular cooperation paradigms that will provide a channel for international donors to support ongoing South-South cooperation initiatives.
South-South cooperation: a vision of the future In the Southern Cone, IFAD support for regional integration processes such as the Southern Cone Common Market (MERCOSUR), where it has taken the form of financial and technical support for the Specialized Meeting on Family Farming (REAF), has become a model for policy dialogue and South-South cooperation for other regions. In Central America, the Programme for a Rural Dialogue, which is also being funded with IFAD grants, is building on the Southern Cone’s experience with a view to facilitating participation by small-scale farmers in the definition and implementation of Central America’s common agricultural policy. The South African Development Community (SADC) has shown interest in these experiences and plans to send a high-level delegation to the next REAF, which is to take place in Brazil next November. |
Related documents:
- Consenso de El Salvador sobre Cooperación para el Desarrollo con Países de Renta Media (Spanish only)
- IFAD loan terms and conditions – interest rates for market loans and intermediate loans in 2009
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