Statement by Dr. Hofmann, Director-General of the German Federal Ministry for Economic Cooperation and Development

Germany's development policy is focused on the Millennium Development Goals. A vital pillar of this policy are international organisations such as IFAD. What makes IFAD special is its explicit mandate to address rural development, an area of particular importance given that most of the world's poor live in rural areas.

IFAD has gained reputation on focusing on the most remote rural areas. IFAD has considerable financial leverage ability. It has been able to multiply its own funding by mobilising co-financing and counter-partner contributions from the borrowing countries.

2005 is a special year for IFAD. At the 28th Session its President has been re-elected and negotiations will commence on the 7th replenishment of the Fund.

Since the last replenishment was concluded in 2003, IFAD has introduced a number of necessary and useful reforms:

• A new Framework for a Results and Impact Management System (RIMS) has been installed,
• the Performance-Based Allocations System is being implemented,
• IFAD's evaluation department has now become independent and is successfully operating a new evaluation policy,
• the pilot project on field presence is making good progress,
• the Strategic Change Programme has been launched and
• Human Resource Management has undergone a complete overhaul.

So a great deal has been done to equip IFAD to face new challenges and respond to deficiencies of the past. Many initiatives have been launched but not fully completed. There are signs that even greater efforts may be needed. IFAD should remain a specialized organisation but at the same time cooperate to a greater extent with other multilateral and also bilateral development organisations. It must also make itself more visible and become more involved in the political dialogue. This means IFAD must take a more active part in in-country donor meetings. The era of isolated projects is over once and for all. What is needed is a coherent, programme-based approach with tailor-made country strategies. Where this approach overstretches means and capability IFAD should join forces with other actors in development.

We will follow IFAD from a stance of critical solidarity. This implies giving the management a fair chance to undertake necessary, and for some painful, corrections. An IFAD that is reforming and innovative can count on Germany's support. We support all efforts on rural poverty reduction. Hence, we need a strong IFAD to achieve the MDGs.

How much IFAD will be able to contribute will depend on the outcome of the forthcoming replenishment. I am sure that the more wholehearted IFAD is in taking on board the criticisms expressed and the required reforms, the more successful the replenishment round will be.