IFAD Supports a Reconstruction and Rural Modernization Programme in the Republic of El Salvador

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IFAD Supports a Reconstruction and Rural Modernization Programme in the Republic of El Salvador

Press release number: IFAD 24/02

Rome, 3 May 2002 – A USD 30.5 million project in the Republic of El Salvador – The Reconstruction and Rural Modernization Programme – will receive a USD 20.0 million loan from the International Fund for Agricultural Development (IFAD). A financing agreement was signed today by His Excellency Joaquin Rodezno Munguía on behalf of the Republic of El Salvador and Mr. Lennart Båge, President of IFAD.

The programme area covers approximately 25% of the country’s territory and comprises five departments (Ahuachapan, Chalatenango, La Libertad, Santa Ana and Sonsonate) located in the western and central regions of El Salvador. About 21, 400 people will benefit directly from the programme’s agricultural technical assistance. A total of 15 000 landless youths (men and women) will receive skills training and 3 600 people will receive technical and financial support for the creation of small rural enterprises and businesses.

Most rural inhabitants in El Salvador are facing extreme poverty which reinforces IFAD’s need to continue focusing on smallholders, landless farmers and rural women as their primary targets. Social and economic inequities affecting the rural poor led to a 12-year civil war that further deteriorated their income and living conditions. The conflict created an enormous challenge to meet the demands of the ex-combatants and fulfil the basic needs of large segments of the population. The decline of the agricultural sector and its loss of competitiveness have reduced have reduced both income levels and labour opportunities for rural inhabitants. At the rural household level, main causes of poverty are lack of access to: productive resources, business oriented productive organizations, literacy and technical/entrepreneurial skills, access to markets, coherence in rural development policies and technical support services. In addition, the situation has been further exacerbated by the destruction of Hurricane Mitch and the two violent earthquakes in 2001.

The general objective of the Reconstruction and Rural Modernization Programme is to achieve, in a sustainable and gender equitable manner, the effective economic integration of the target population in the regional and national economic context by improving their access to business opportunities, to technical financial resources and to local and national labour markets.

To date, IFAD has financed 6 projects in the Republic of El Salvador for a total loan amount of USD 78 million and a total project cost of about USD 182 million.

IFAD is a specialised 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 available to low-income countries on very favourable 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.