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Finance in Common Summit - Closing Session

Statement by Alvaro Lario, President of IFAD

Location: Cartagena, Colombia

06 September 2023

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Excellences,
Ladies and gentlemen,

As we bring this Summit to a close, taking account of progress made and next steps, let us remember why we are here, and for whom we have built this important collaboration.

Finance in Common (FICS) was launched while the world was being battered by a pandemic. Since then, the war in Ukraine has further exacerbated food crises. The increasing climate change impacts are having devastating effects on the most vulnerable people. The geopolitical fracture has deepened, forced migration and conflicts are on the rise and interest rates increases have created less fiscal space for most of the economies. 

This is why Finance in Common is a space to connect and to look beyond the current divisions: public vs private, global north versus global south, domestic vs multilateral or development vs climate. At IFAD, we highly value FICS as a platform to foster collaboration and partnerships in scaling up financing to combat hunger, poverty and the impact of climate change.  

The role that Public Development Banks (PDBs) can play in transforming food systems to be more inclusive and sustainable – as well as promoting climate action -- is huge. Collectively, PDBs invest $2-3 trillion per year and. they supply two-thirds of food systems financing.

The current food crisis has made even clear that food security and climate changed are interlinked and need to come together in all policies and programs, as well as in all investments.

Yet, the fact that little of these financial public investments go towards climate change adaptation shows that we need a stronger alignment of PDBs resources.

PDBs, especially those dedicated to agriculture, have long played an essential role in financing different sectors around food systems: from inputs to processing, transportation, storage and distribution.

And yet, agricultural investments remain underrepresented in Public Development Banks (PDBs) portfolios when compared to agriculture’s contribution to GDP and job creation in many low- and middle-income countries.

Over these last years, the Platform of Public Agricultural Development Banks led by IFAD -- in close collaboration with AFD -- has almost doubled its membership and has over 130 members across 98 nations.

At a moment of uncertainty and food crisis, where food security has become a matter of national security, this platform represents a major step towards achieving stronger alignment and scaling up action.

The platform enables PDBs to ensure that we increase the coordination of investments and we promote sustainable agricultural practices that impact the lives of the most vulnerable communities while making sure that we preserve the sustainability of natural assets, like soil, water or clean air for future generations. 

As we reflect on the discussions of the past few days, we must acknowledge that we are far from declaring victory. With this in mind, I would like to share with you four brief takeaway messages from the coalition of Agricultural PDBs on the way forward on how food is produced, distributed, stored and commercialised in a productive, resilient, sustainable and equitable way

First, food systems transformation must be elevated as a top policy imperative. Public Development Banks should be given a stronger mandate as instrumental implementation agents for governmental food systems pathways and Nationally Determined Contributions (NDCs).

Second, even if we structure global solutions, we must ensure that they are implemented locally. It is imperative to ensure that the most vulnerable players of the food systems value chains, many times the small farm holders, receive their fair share.

Third, climate adaptation and climate resilience have to be integrated at the core of these investments to ensure that food systems and agricultural practices are resilient to the extreme weather events. Without real change, “business as usual” will lead to more and more vulnerable people falling into poverty and hunger, creating a vicious cycle of migration and conflict. 

Fourth and finally, innovative financial solutions and blended finance must be expanded, collaboration and partnership of public, private and philanthropic resources can leverage the impact.

Ladies and gentlemen,

We know that on current trajectories we will not achieve our goal of ending extreme poverty and hunger by 2030. Food price inflation, lack of access to seeds or fertilizers and extreme weather events are pushing more vulnerable people in all countries into hunger.

There is an urgent need to scale up action against food insecurity and climate change and this calls for a greater role for PDBs investments in promoting inclusive and resilient global food systems that can withstand economic and climate-related shocks.

We have a challenging path ahead. But, it is a challenge that we have no choice but to overcome if we want to leave no one behind.  

Thank you.