Transform Institutions and Empower Rural Poor to Reduce Poverty, Panel Says

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Transform Institutions and Empower Rural Poor to Reduce Poverty, Panel Says

Press release number: IFAD 16/03

Rome – 20 February 2003… The rural poor need stronger institutions if they are to be able to overcome their poverty. The call came during a roundtable session on the closing day of the International Fund for Agricultural Development (IFAD)’s annual Governing Council meeting.

Helping the world’s 900 million rural poor have a greater say in decisions which affect their lives is essential if the Millennium Development Goal of halving the number of poor and hungry by the year 2015 is to be met, the meeting was told.

“Institutions are so important to rural poverty reduction that empowering the rural poor and their organizations is the first point of IFAD’s institutional strategy,” said Mr. Thomas Elhaut, a lead economist at IFAD. “Some 27% of IFAD’s resources are allocated to support this objective.”

A discussion document prepared by IFAD says the rules of markets and public policies are often biased against the poor, who have fewer opportunities to overcome poverty as a result. With 75% of the poorest men, women and children living in rural areas, the transformation of rural institutions is key to poverty reduction overall.

“One of the big problems is that poor people don’t have power or much of it,” said Mr. David Beckmann, President of Bread for the World, an anti-hunger advocacy group in the United States. “Power is part of the problem and part of the solution.

For many poor rural people, powerlessness is experienced as an inability to influence decisions affecting their lives and livelihoods, the session heard. Unless the poor have a greater say in decisions that affect their lives, international efforts to assist and enable the poor to overcome poverty will be hampered.

“Institutions that deal with rural development cannot be static,” said Mr. Moise Mensah, Chairman of the Board of Trustees of the International Service for National Agricultural Research. “They must change…There is a need to give the poor a voice to change the rules of the game.”

Through the Rural Financial Services Project in Ghana, IFAD has supported the government’s efforts to broaden and deepen access to financial services by the rural poor. The programme also establishes conditions so that rural finance can be regulated. Competition in rural finance is being encouraged, to provide better quality financial services for the rural poor.

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 628 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.9 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.