IFAD has been a trusted partner in the Latin America and Caribbean region (LAC) for over 30 years.

There are projects designed to improve market access and work across value chains, programs for women, indigenous peoples and youth, climate-change programs and grassroots literacy projects. We work directly with area governments to rebuild roads, build lasting organizations and improve productive infrastructure. And while each project and program is specifically tailored to meet the needs of the people living in the target area, they do share a few common traits, with each seeking to aid poor rural people to improve their lives by giving them the tools and training they need to step out of poverty on their own.

There are projects in some 20 member countries with a total investment portfolio of around US$700 million. The current LAC grant portfolio has a total value of around US$20 million.

LAC investments are concentrated in social development, and market and rural enterprises development, with the remaining slices of the pie looking at management; agriculture, livestock and fisheries development; environmental development; and other impact domains.  

Non-IFAD financiers contribute over 40 per cent of the total amount of financing in the region. This means that IFAD on average mobilizes US$ 0.75 for each dollar invested from its own resources.

Living poor in LAC

Before the global economic crisis, it seemed that the Latin America and Caribbean region was finding a winning combination of market, social and civil-society development policies that could conquer the long-standing tradition of social exclusion and injustice. Many countries were showing positive trends in poverty reduction and equality of income distribution. Rural poverty rates had fallen from a high of 65 per cent in the early 1990s to 41 per cent in 2008, and extreme poverty had decreased from 41 per cent to 30 per cent in the same period.

Early estimates from the Economic Commission for Latin America indicate that the region is recovering well from the economic crisis, and that it did not affect poverty rates across the region. The agriculture sector did relatively well during the downturn and was the sector with the highest employment growth – over 4 per cent in 2009. This compared with less than 2 per cent for the total economy, while manufacturing suffered a 3 per cent decline. Nevertheless, few if any small-scale producers were able to capture the benefits of such growth.

The total population of the region is about 564 million. In countries for which data is available, about 7 per cent of the population lives on less than US$1.25 a day, and around 21 per cent lives in rural areas.

Many poor rural people in the region still live on less than US$2 per day and have limited access to financial services, markets, training and other opportunities. Extreme rural poverty is strongly concentrated among landless farmers, indigenous people, women and children. Many of the countries have Gini coefficients of 0.5 or higher for rural income, confirming this to be the most unequal rural sector in the world (a Gini coefficient of ‘0’ represents complete equality, while ‘1’ represents maximum inequality). Inequality in land access is even more marked, with an overall Gini score of 0.78, compared with Africa’s 0.62.

Therefore, average national income gives a distorted image of the reality facing the region’s poor rural people. For example, while Mexico’s GDP per capita is US$8,920, the average income of the poorest 40 per cent of the rural population is US$652 per year, and that of the poorest 20 per cent is US$456 per year (equivalent to the GDP per capita in United Republic of Tanzania). On the positive side, the region has made strides in poverty reduction. Guyana, Jamaica and Nicaragua have achieved Millennium Development Goal 1, and Brazil is on track to do so

IFAD operations in Latin America and the Caribbean