It is an honour for me to address this Second Assembly of the Global Environment Facility. I join you today as President of IFAD, one of the most recent executing agencies of the GEF but permit me to start on a personal note. I was privileged to participate in the meeting in Paris in March 1990 that launched the GEF idea amidst an equal measure of enthusiasm and scepticism. I further had the privilege to serve as Council member up to 1996 and participate in the landmark meeting in Beijing of 1993. Having seen the idea of GEF grow from hope to realization, praise should go to many who have contributed to GEFs success. However, no one is more deserving than Mohammed El Ashry. Without his drive, vision, dedication, political and management skills and above all his ability to inspire and lead, GEF would not have been where it is today. Allow me to pay tribute to this remarkable and unique contribution to a better and more sustainable world.

Mr. Chairman,

The campaigns against poverty, hunger and environmental degradation are not separate efforts. Nor are they competing interests. Rather, they are mutually reinforcing processes that must advance as one if they are to have a lasting and meaningful impact. Poor people do not have the luxury of the longer term view when they are struggling to survive from one day to the next.

Tragically, the resulting deforestation, overgrazing and overcultivation only mortgage the future. As the natural resources upon which rural communities depend for survival lose their productive capacity poverty deepens, global environmental threats mount, and the vulnerability of the rural poor increases. To these farmers, fisher folk and herders it is clear that natural resource management and development are not two separate goals and two unrelated agendas. They are in fact, one common agenda.

IFAD projects and programs have aimed to enhance the productivity of the natural resources that are essential for the livelihood strategies of the rural poor. Hence, from the outset, sustainable management of land and other natural resources has been part and parcel of IFAD interventions.

Our one quarter-century of experience has taught us much about what is needed to enable the rural poor to break the poverty-degradation cycle. Chief among these is strengthening the capacity of the rural poor and their organizations. Who better to manage the local natural resource base than community organizations run by the resource users themselves?

To break the cycle of poverty and degradation, the rural poor also need access to productive natural resources and technology. In large part, this requires ensuring that marginalized people have secure access to potentially productive lands and water. To ensure that the full potential of these resources is fulfilled, there is also a significant need for the development and transfer of environmentally-friendly technologies that can improve productivity on small-scale farms.

Also, the rural poor need access to financial services and markets. Rural finance can help provide the capital needed to invest in preserving resources for the future. Combined with market linkages, rural finance can also promote off-farm income-generating activities and microenterprises that take the pressure off natural resources and reduce the vulnerability of the rural poor to drought and crises.

IFAD’s twenty-years of experience in China illustrates the value of such strategies that increase the productive capacity of the rural poor while fostering environmentally-friendly livelihoods. In particular, this experience shows how investments in the human and social assets of the rural poor enhance their capacity to adopt improved technologies, increase the returns on their labour, enable them to undertake non-farm activities, and diversify their income structure. This, in turn eases the pressure on the natural resource base and allows the rural poor to replace annual cropping with more appropriate permanent crops.

The introduction of participatory Village Development Planning in IFAD projects in China has empowered beneficiaries to take ownership of their own development. Women, in particular, can engage in livestock and micro-enterprises while households establish terraces for cash crops with the dual purpose of increasing income and protecting the fragile slopes. In many places, this combination has resulted in doubling household incomes.

Mr. Chairman,

I am pleased to report that we have made strong progress in our new role as an Executing Agency. We have been identifying countries of priority focus for IFAD-GEF collaboration in 2002 and 2003. We have launched critical information-sharing activities to facilitate partnership. And, we have mainstreamed GEF funding potentials in the project cycle. IFAD has initiated 10 projects for GEF funding, which are variously at either concept or early design stage.

This partnership could not be launched at a more promising moment. Equipped with the vision of the Millennium Summit and the commitments of Monterrey, the international community must now focus on action against poverty. This is enhanced by the clear recognition, voiced at Johannesburg, that the campaign against poverty and the effort to preserve our global environment must move forward hand in hand.

It is in this context that the replenishment level agreed for the Global Environment Facility this year is indeed welcome. By pledging an increase in resources, nations signalled, as they did in Monterrey, that they are committed to matching goals with resources, and policies with action.

We welcome in this context that this Assembly will consider adding the critical issues of land degradation, desertification and deforestation, along with persistent organic pollutants to the four GEF focal areas.

As the agency selected to house the Global Mechanism of the UN Convention to Combat Desertification, IFAD particularly welcomes the new opportunities for partnership that a land degradation focal area would hold. The Global Mechanism plays a vital role in mobilizing new resources for implementation of the Desertification Convention. The Mechanism also performs the critical tasks of helping affected countries translate National Action Plans into effective investment opportunities, and promoting the mainstreaming of UNCCD principles into the planning and work of development institutions. This mainstreaming process is already well underway within IFAD with 70% of its activities in ecologically fragile and marginal environments.

The incremental costs that GEF can finance and its partnership with the Mechanism would open new opportunities for collaboration and progress. Given desertification’s dual nature of environmental threat and development challenge, the complementary role of the GM in mobilising resources for co-financing GEF projects continues to be significant. For example, the GM has worked with the Government of China, IFAD, ADB and the private sector to mobilize resources for co-financing the GEF country programme currently under development in China. We look forward to working with GM and GEF to increase impact.

Mr. Chairman,

Ten years ago, the international community expressed a reality in the Preamble to Agenda 21 that remains strikingly true:

"…integration of environment and development concerns and greater attention to them will lead to the fulfilment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer, more prosperous future. No nation can achieve this on its own; but together we can – in a global partnership for sustainable development.”

This global partnership cannot hope to succeed without the full and equal participation of the rural poor. Three-quarters of the 1.2 billion people living in extreme poverty – some 900 million people – survive in rural areas and make their living largely through agriculture, forestry, fisheries and related activities. Often, these people hold the frontlines against biodiversity loss, desertification and natural resource degradation. They are the stewards of our natural resources and they are essential for translating local efforts to respond to poverty into global environmental benefits. These rural poor hold the key to sustainable use of the land, water and other resources upon which their future – and ours – so clearly depend. We look forward to a strengthened partnership with the GEF family to achieve this goal.

Thank you.