February 19-20, 2002

Mr. President, Mr. Chairman, IFAD Colleagues, and Distinguished Guests. It is indeed a pleasure to represent the United States at the 25th Governing Council. I would like to congratulate our President, Lennart Boge, on his first year in office. And, I would like to welcome our new Vice President, whom I know well from the African Development Bank. Mr. Enweze, we wish you much success with your new duties at IFAD. I would also like to thank John Westley for his fine job as Vice President and for his many years of hard work and deep commitment to IFAD.

The US has been a strong supporter of IFAD for many years. That support reflects our belief in the centrality of agricultural development in alleviating poverty among the world's poorest citizens, most of whom live in rural areas. We recognize that, in order to lay the foundation for sustainable growth, one must invest in the agricultural sector. We have learned, often painfully, that forcing the pace of industrialization by investing in uncompetitive large-scale manufacturing is not the path forward. Rather, through well-designed projects that increase on-farm productivity, while also creating an environment that fosters broad-based private-sector income diversification, we can do much to improve the lives of millions of rural poor.

The challenge before us remains a formidable one, with almost a billion people in rural areas still living on less than $1 a day. The commitment made at the World Food Summit - to cut hunger by half by the year 2015 - will require the sustained attention and disciplined effort of both beneficiary and donor governments working together in a coordinated fashion. IFAD, with its singular focus on rural poverty, is unique among international institutions and is thus well positioned to play an important role in this endeavor.

The United States has committed itself to strengthening the multilateral development banks by sharpening their focus on real improvements in the everyday lives and living standards of the poorest. We are asking institutions to concentrate resources on productivity-enhancing activities that generate sustainable growth. This means an insistent focus on institutional effectiveness, measured by results. Measuring impact does not mean simply establishing a set of indicators and counting things: more broadly, it should be understood as a methodological framework for project design, implementation and evaluation. This approach needs to be built into projects at the initial stage to help institutions track progress, establish best practices and make course corrections when needed. Demonstrated institutional effectiveness and publicly measured results, we believe will generate greater confidence among donors, and will more likely enhance support.

The reforms initiated with IFAD's Fifth Replenishment were a good starting point, and IFAD has made progress in achieving these and other reform goals. The organization has strengthened its collaboration with other international institutions. It has committed to the development of country strategy documents for full review by the Executive Board. And, it has improved mechanisms for project evaluation and impact assessment.

We welcome the upcoming Replenishment as an opportunity to look to the future and to help a new President set a firm path forward while building on the achievements of the past. Consistent with the theme of planning for a stronger IFAD future, I would like to make a personal observation and suggestion for discussion as we make decisions about the new replenishment. I would suggest to you that it seems an appropriate time for all IFAD shareholders to recognize that the List A, B, and C categories, while recognizing the historical roots of IFAD, are somewhat of an anachronism that at this time, perhaps, divides us more than they unite us. I believe spending more time during the replenishment meetings working as a group will build a stronger foundation for the future.

Indeed in IFAD and in the Global Environment Facility, different from the MDB soft loan windows, all countries are donors. And, it is clear that donors share the same desire to improve institutions and to achieve improved results. In a GEF replenishment there are no such distinctions between donors and the negotiations work openly, candidly and smoothly. In the current IDA replenishment negotiations, where for the first time representative borrowers have been included, there is no pattern of disagreement on issues that splits donors and borrowers or even regions. I hope we can begin a constructive dialogue on this question with an eye toward creating a more open and interactive system of consultation and negotiation.

As we proceed with the Sixth Replenishment discussions, we all will be developing specific recommendations in the months ahead. Some of the broad themes the US will emphasize include:

• Continued and sustained focus on assessing the impact of IFAD projects on increasing productivity and achieving sustainable reductions in rural poverty.
• Strengthening IFAD's capacity to assess the enabling policy and institutional environment in borrowing countries, to help ensure that resources are allocated most effectively.
• Bolstering institutional effectiveness through continued management focus on operational efficiency, strategic planning and financial soundness.
• Maximizing IFAD's catalytic role through innovation and promotion of new approaches that are replicated and leveraged by other development partners.

Once again, we take this opportunity to pledge our continued support and we look forward to working with all of you to more fully realize IFAD's potential.

Thank you for your attention