Lennart Båge, President of IFAD: Poverty Poses a Major Threat to Global Peace and Security

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Lennart Båge, President of IFAD: ''Poverty Poses a Major Threat to Global Peace and Security''

Press release number: IFAD 06/02

With the general theme ''Financing Development: The Rural Dimension'' IFAD’s 25th Governing Council meets in Rome on 19-20 February 2002

Rome, Friday, 8 February 2002 - The industrialized countries need to devote more effort and resources to combating poverty in rural areas if the global community is serious about wanting peace and security. That will be one of the key messages at a major conference convened by the UN’s International Fund for Agricultural Development (IFAD) on February 19 and 20 in Rome. President Olusegun Obasanjo of the Federal Republic of Nigeria will be the guest of honor at the 25th annual Session of IFAD’s Governing Council.

In the wake of the tragic events of September 11, poverty is now at the center of world attention as the global repercussions of this scourge become ever more apparent. Poverty has long been identified as a breeding ground for political unrest, as well as for other grave social ills, including disease, disintegration of family life and environmental degradation. Yet in many cases, the wealthier countries are cutting rather than increasing aid to the poor, and are failing to direct it to the areas where it is most needed.

With a theme of ''Financing Development: the Rural Dimension'', the IFAD conference will debate effective initiatives for tackling poverty and suggest funding strategies which may help break the cycle of poverty for millions of people living desperate lives in often remote rural areas.

The annual meeting will be attended by ministers of finance and agriculture and other top officials from 162 member states, which make up the Governing Council, IFAD’s highest decision-making authority. It is being held almost exactly a month before the International Conference on Financing for Development, scheduled from 18-22 March in Monterrey, Mexico, a landmark forum aimed at galvanizing the international community into giving more and better resources to help the poor and hungry.

Ignoring the opportunity could prove a costly lesson, IFAD warns. “Today, there are more than 1.2 billion people living in conditions of extreme poverty, struggling for survival on less than one dollar per day,” said IFAD President Lennart Båge, who took office as the fourth president of IFAD in April last year. “Poverty on this scale is a source of civil strife and instability, disease and desperation. The consequences will not remain limited by national frontiers, but will present growing risks to the wider human society.”

IFAD, a specialized UN agency with a mandate to combat poverty and hunger in the rural areas of the developing world, argues that it is only by addressing the needs of the rural poor that the problem of world hunger can be tackled. In spite of mass migrations to the cities in recent years, three-quarters of the world’s poor continue to live in the countryside. Yet development efforts in most countries increasingly neglect the rural sector and foreign aid to agriculture fell by nearly half between 1986 and 1999.

Established in 1977, IFAD has so far helped more than 250 million people escape from extreme poverty, earning itself a reputation for introducing innovative but lasting methods of assisting people to emerge from the poverty trap once and for all.

By providing direct financing, through low-cost loans and grants, and mobilizing additional resources for projects and programs, IFAD helps the poorest of the poor to work their way out of hunger, poverty and deprivation. Projects are aimed at increasing food production, raising incomes and improving health, nutrition and education on a sustainable basis.

Over the past five years, IFAD has financed an annual average of 28 projects with highly concessional loans and grants of around USD 410 million. In 2001 alone, the organization helped fund 25 projects worth a total of USD 996.8 million, which brought direct improvements to the lives of some 16.2 million people. IFAD’s own contribution to these programs was USD403.5 million. Since it was founded, the Rome-based UN agency has funded 603 projects in 115 countries and provided more than 1500 grants for research and technical assistance. For every dollar it has channeled to the poor, IFAD has mobilized USD2.9 from other donors, for a total value of USD21.4 billion.

Yet in spite of these efforts, far more needs to be done, warn development officials. At the Millennium Summit held in New York in September 2000, world leaders pledged to try to cut the number of poor by half by the year 2015. But with the deadline ticking away, all the indications are that the challenge is way off course.

Far from declining, the number of extreme poor is rising as poverty reduction in the 1990s fell to less than one third of the rate needed to halve exteme porverty by 2015. Of these, 44% live in South Asia, 24% in Sub-Saharan Africa, 24% in East Asia and 6.5% in Latin America and the Caribbean. Every day, some 40,000 people die of hunger-related causes.

But the poor are not just to be found in the Southern Hemisphere. In some of the transition countries of Eastern Europe and Central Asia, poverty is increasing rapidly. In parts of the Soviet Union, the number of poor has more than tripled in recent years. What the majority have in common is that they live in rural areas. Six out of every 10 of the world’s poor earn their scant living mainly as farmers or as farm laborers.

A major study carried out by IFAD called The Rural Poverty Report, launched in February 2001, showed that around the word, the rate of poverty reduction slowed down during the 1990s. Globally, it was one-third of the rate needed. In Sub-Saharan Africa, the pace was six times too slow.

Yet with the right help from outside - and the right policies from within – experience has shown that much can be achieved. Schemes funded with loans from IFAD, and using expertise built up during more than 20 years of working in the field, demonstrate there is massive potential for helping often hardworking and highly motivated people to lift themselves and their families out of poverty.

Improving access to safe water, financial services, land, resources and markets have all been identified as key ways in which people living in rural areas in conditions of great poverty can be helped to make real and lasting changes to their lives. Offering micro-credit – schemes, which allow rural men and women to take out modest loans on easy terms – has been shown to be a particularly effective way of enabling the poor to start small ventures and take control of their future.

Education and technology play a major role in poverty reduction. One highly successful project, funded and implemented by IFAD, has linked poor communities in some of the farthest flung corners of the world through web-based computer networks. The networks, which now reach more than 1.2 million often remote households in Asia, Africa, Latin America and the Caribbean, enable poor rural dwellers to share their experiences through chat-lines and on-line conferences and, more concretely, to sell their products at premium prices via virtual farmers’ markets. In Pucany, a small village deep in the Amazon rainforest, peasant farmers managed to land a lucrative contract to supply essential oils to the worldwide beauty product chain, The Body Shop. The contact was made over the Internet, as were the subsequent negotiations.

Also on the agenda at this month’s IFAD conference will be a wide range of other issues, including the issue of IFAD’s resources, which consist of contributions from member states, reflows from previous loans and investment earnings. Members’ contributions are received through a replenishment process and the Sixth Replenishment will be under discussion. So too will the Strategic Framework for 2002-2006, designed to carry IFAD through into the third millennium under the guidance of its new president.

Other topics up for review will be IFAD’s audited financial statement for 2000 and its proposed Programme of Work and Budget for 2002. There will be a progress report on the Popular Coalition to Eradicate Hunger and Poverty – an initiative aimed at boosting the poor’s access to land and other resources – and on the Global Mechanism of the united Nations Convention to Combat Desertification, in which IFAD plays a key role.

Note to Correspondents

A joint press conference will be given by IFAD President Lennart Båge and President Olusegun Obasanjo of the Federal Republic of Nigeria at 11:30 a.m. (check time on Tuesday 19th February.

A final press conference will be given by IFAD President Lennart Båge at 1 pm (check time) on Wednesday 20th February

Six round table discussions will be held from 9.00 to 11.00 am on Wednesday 20th February to discuss needs and strategies in the following regions:

Proceedings of the two-day meeting will be video webcast live on a special dedicated page of the RAI 24 News Internet Website or through IFAD’s own Homepage and will be broadcast live via satellite on Eutelsat W2 @16E, from 0900-1900 CET on 19 February and from 0900-1800 CET on 20 February.

The Conference will take place at the following address:
Auditorium della Technica (Confindustria)
63-65 Via Umberto Tupini
EUR, Rome

To be accredited journalists must fill in this form and fax it or e-mail to:
Fax: 06 54 59 2143, E-mail: communications@ifad.org accompanied by a photocopy of the press card. Accreditation should be received by 15th February 2002.

For security reasons no one will be allowed inside the Auditorium without a badge.

IFAD is a specialized agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.