Issue 5 - July/August 2005
In this issue
Message from the Director
The Asia and the Pacific region is striding towards its Millennium Development Goals (MDGs). Nevertheless, the task that remains is large and multifaceted. No single international development institution can adequately assist developing member countries in fully reaching their goals. We need to combine human and financial resources for mutual reinforcement, and work on the complementarities of our mandates, strategies, resources and approaches. Working together means harmonizing our policies and streamlining our assistance strategies. This enhances our alignment with countries' own strategies and policies, fosters national ownership of the results achieved and reduces the aggregate transaction cost of assistance.
The Monterrey Consensus highlighted the importance of complementarity between increased development assistance, fiscal resources, private sector investment and remittances, as well as trade. Furthermore, MDG VIII, which calls for a global partnership for development, clearly prompts a change in the mindset of the international development community. While partnerships are a means to an end, for some time we need to work on them as if they were ends in their own right in order to engineer "win-win-win" conditions where IFAD with its partners also secure a win situation for the rural poor and their countries.
Traditionally, IFAD has focused on cofinancing as the indicator for successful partnership. However, it is an incomplete results indicator for the complex nature of the partnerships we need to develop. Partnerships need to enhance resource flows towards rural poverty reduction, but they also need to facilitate learning from each other, joint dialogue for pro-poor policy change, common strategies to "make poverty history", and all this needs to be underpinned by institutional partnerships.
The Asia and the Pacific division has recently initiated a major partnership-building process with development authorities in Japan - the Ministry of Foreign Affairs (MoFA), the Ministry of Finance (MoF), the Ministry of Agriculture, Forestry and Fisheries (MoAFF), the Japanese Bank for International Cooperation (JBIC), the Japan International Cooperation Agency (JICA), the Foundation for Advanced Studies on International Development (FASID) and the Engineering and Consulting Firms Association (ECFA); in France - MoFA, MoF and the French Development Agency (AFD) and in Germany - Federal Ministry for Economic Cooperation and Development (BMZ) and German Technical Cooperation (GTZ). The division has pursued the World Bank/IFAD Partnership Initiative and is planning a similar initiative with the Asian Development Bank. It has also embarked on a regional policy initiative with the FAO Regional Office for Asia and the Pacific and has stepped up its selective strategic partnership dialogue with international centres such as the International Centre for Integrated Mountain Development (ICIMOD) and the International Rice Research Institute (IRRI). All of these partnerships mentioned above have several dimensions or goals: knowledge sharing, policy initiatives at the country and regional level, strategy coordination, operational collaboration and deeper institutional partnership actions. The division is also working to further enhance its strategic partnerships with: other major donor countries in the region, such as Australia and New Zealand; new donors, such as China, India and Thailand; as well as international financial institutions; rural producer organizations; the private sector; and civil society. IFAD's selection of strategic partnerships must be driven by the priority agenda for poverty reduction in the Asia and the Pacific region from now until 2015 and beyond; in the context of continued exposure to risk and vulnerability of rural producers, women and youth.
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IFAD's re-engagement with the World Bank in Asia
In the context of the World Bank/IFAD Partnership Initiative, a number of key strategic opportunities are being pursued.
At the regional level, IFAD is bringing a rural perspective to the Poverty Reduction Strategy Process (PRSP) review being undertaken by the World Bank, with a detailed look at the experience of 17 Asian countries in rural poverty reduction. Secondly, in conjunction with the Food and Agriculture Organization (FAO) and the World Food Programme (WFP), IFAD is sharing knowledge and analysis with the World Bank, the United Nations Conference on Trade and Development (UNCTAD) and country authorities on the ongoing World Trade Organization (WTO) negotiations. This includes analysis of the performance of agricultural commodity markets, domestic policies and trade impediments; as well as analysis of the effects of economic growth and proposed trade reforms on welfare.
As poverty is not just a matter of deprivation, but also of vulnerability to exogenous shocks, IFAD is doing a study on how various forms of risk affect poor households in Asia and the Pacific. The findings are expected to have valuable implications for the design of pro-poor policies to deal with the effects of these risks. The study will be shared with the World Bank and other key donor partners.
A number of high-level meetings between IFAD and the World Bank have taken place over the past year to explore opportunities for working together in support of pro-poor agricultural sector development in Asia . These meetings have led to concrete partnership ideas in Bangladesh , Pakistan and Viet Nam .
Recognizing that IFAD and the World Bank have been active in the agricultural sector in Bangladesh for many years, operations staff in both institutions have been sharing knowledge and lessons learned from past operations with a view to defining future investment options. Looking to the future, and in response to demand from the Government of Bangladesh, the World Bank and IFAD are currently cofinancing the inception process for a new project - the National Agricultural Technology Project. This project proposal is due to be appraised in early 2006.
The World Bank and IFAD have been preparing to engage in a strategic partnership in the microfinance and irrigation sectors in Pakistan. In relation to microfinance, recognizing the unique relationship between the World Bank and the Pakistan Poverty Alleviation Fund (PPAF), it is anticipated that the World Bank will act as Cooperating Institution for IFAD's new PPAF Microfinance Innovation and Outreach Programme, which is due to be presented to IFAD's Executive Board for approval in December 2005. With respect to the irrigation sector, as a first input to a partnership, IFAD prepared a summary of lessons learned from its experience in small-scale irrigation development. Following this, the two institutions agreed to cofinance the preparation of a new small-scale irrigation project in Balochistan. It is envisaged that this project proposal will be appraised in late 2005.
The World Bank and IFAD have both prioritized community-driven development in Viet Nam and have been trying different forms of decentralized implementation. Experiences and lessons learned have been shared in different policy forums, in provincial government meetings and in regular bilateral meetings. Information shared by the World Bank has been particularly useful to IFAD for defining operational manuals to implement community-based activities, including small-scale infrastructure. IFAD's new field presence in Viet Nam will play an important role in strengthening the relationship with the World Bank.
In Central Asia, IFAD's cofinancing partnership with the World Bank in Kyrgyzstan goes back many years. The Bank provided cofinancing to both the Sheep Development Project, which closed in 2003 and to the Agricultural Support Services Project. In Tajikistan, IFAD is in the process of cofinancing the Community Agriculture and Watershed Management Project initiated by the International Development Association. In terms of a broader regional partnership, IFAD and the World Bank are both active task force members of the Global Environmental Facility (GEF) programmatic framework on sustainable land management, which is part of the Central Asian Country's Initiative on Land Management (CACILM).
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Strengthening of partnership between IFAD and Japan
On 1 June, a policy seminar was held at the University of Tokyo, at which panellists from MoFA, JICA, JBIC and a team from IFAD - including the IFAD President - discussed common goals. The event was an excellent opportunity to:
- improve IFAD's understanding of Japan's development priorities
- review progress made towards meeting the MDGs in the Asia and the Pacific region
- enable Japanese authorities to learn more about IFAD
- share experiences in reducing poverty in Asia and Africa between IFAD and the main development agencies in Japan
- identify prospects for collaboration
The agenda for the future is a strengthened partnership between IFAD and Japan based on mutual consensus on the centrality of agriculture for the achievement of the MDGs. The partnership will involve:
- policy advocacy in the context of ‘human security', an area that complements the work that IFAD is carrying out on risk and vulnerability measurement and management
- joint research on the socio-economic impact of people's movements and on remittances economies
- information sharing on pro-poor infrastructure
Mr Ken Okaniwa, Director of Aid Planning Division, MoFA, stressed that the next steps to be taken in strengthening Japan 's partnership with IFAD must be concrete and systematic. They will involve identifying the comparative advantages of the two partners, selecting potential areas for collaboration both in terms of policies and at field level, establishing a work plan and regular consultations at the headquarters and field level.
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Strategic partnership between the Netherlands and IFAD in Bangladesh
For many years, the Netherlands has provided financial, technical and policy support to the Government of Bangladesh in the area of water management and related infrastructure development. IFAD has also prioritized pro-poor water management as key to achieving the organization's strategic poverty reduction objectives. Recognizing the unique comparative advantage of the Netherlands in this sector, IFAD has cofinanced a number of Dutch water sector projects, including the recently closed Small-scale Water Resources Development Project. An independent evaluation reported that the project achieved a major policy impact in terms of developing and institutionalizing participatory approaches to small-scale water resource development and management.
IFAD's partnership with the Netherlands in Bangladesh is currently being broadened on two fronts. On the project side, the Netherlands has recently provided financial support to augment IFAD's project formulation process for the Market Infrastructure Development Project in Charland Regions. This new project, due to be presented to IFAD's Executive Board in December 2005, is being designed to make synergistic linkages with a Dutch-financed Char Development and Settlement Project Phase III in the coastal char areas. The Netherlands is considering a grant of US$5 million to cofinance this new project. On the policy side, the Netherlands has been instrumental in providing IFAD with technical support to complete a water sector policy analysis in Bangladesh as part of IFAD's Performance-Based Allocation System.
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WFP/Government of China/IFAD partnership: How food and loans helped to fight rural poverty in China
In 1996 in China, IFAD started a strategic partnership with WFP that was later joined by the Government of China. In a decade, the WFP/Government of China/IFAD partnership has cofinanced nine projects worth about US$550 million, which directly assisted about 6.5 million poor people in 11 poverty-stricken provinces. As a first cofinancing framework among UN agencies in China , the partnership proved to be very successful in several fields: piloting innovations, designing and financing projects, and enhancing impact and policy dialogue.
Beginning in 1998, joint IFAD/WFP-funded projects in China started to apply a participatory approach to project implementation using village development plans that were drawn up by the village populations. Project designs became increasingly flexible to allow for market developments and changing social conditions. Strategy and project designs were improved through the use of the vulnerability assessment method, participatory rural appraisal, and food-for-training and food-for-work schemes. The combinations of WFP food aid, IFAD financial assistance and joint project design proved to be efficient mechanisms to target the poor more efficiently and contribute to the reduction and sometimes complete elimination of poverty.
The WFP/Government of China/IFAD partnership led to increased weight to influence policies. Examples include the promotion of participatory village development planning which has become national policy. In January 2004, IFAD and WFP signed a Memorandum of Understanding for Operational Partnership in the Asia region reiterating their commitment to cooperate more closely in order to achieve greater synergies of food aid and loan funds, as well as to influence policies for poverty reduction.
The partnership in China will be terminated as WFP is phasing out its assistance at the end of 2005 and China graduates from recipient to donor status. In the last four years, China has been contributing financially to WFP projects in other countries and in the future it will make its expertise available to strengthen WFP's capacity to respond to food emergencies.
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IFAD/FAO/country governments collaboration in policy work
On 26-28 April 2005, the Asia and the Pacific Division in collaboration with FAO Regional Office for Asia and the Pacific and the Government of Thailand, Ministry of Agriculture and Cooperatives, organized a Regional workshop on pro-poor policy analysis and dialogue at the country level in Bangkok . The main objectives were to assess the needs of key government organizations of member countries in Asia and the Pacific for policy analysis and dialogue, as a basis for designing a regional level technical assistance grant programme. The programme concept and the practical modalities of delivering policy assistance to selected countries in the region were discussed by senior officials of relevant ministries from 15 countries and representatives from FAO, UNOPS and IFAD. Government representatives expressed strong interest in sharing experiences and lessons learned and in being actively involved in the implementation of the project.
The goal of this programme is to assist selected member countries in reducing rural poverty by:
- sharing experiences on successful pro-poor policies among countries through a knowledge network
- building capacity of key government agencies in the analysis, formulation, implementation and monitoring of pro-poor policies
- promoting greater participation of civil society and the private sector in pro-poor policy dialogue and advocacy
IFAD looks forward to a strong partnership with FAO and countries in the region including Thailand.
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Partnership between IFAD, the Government of the Islamic Republic of Iran, the Government of Italy, Bank Keshavarzi and NGOs
In the Islamic Republic of Iran, IFAD is using supplementary funds provided by Government of Italy to finance a rural microfinance services project in four provinces in the north-west of the country - Kurdestan, East and West Azerbaijan and Ardabil . The project aims to enable rural households to access financial services and is executed by a non-profit organization - Development of Rural Micro Finance Services (DRMFS) - Kardok-Farhikteh. The project is being implemented in each province in partnership between the Agriculture Bank of Iran (Bank Keshavarzi) and local NGOs. Bank Keshavarzi has been repeatedly winning the bank of the year award as being the best managed commercial bank in the country. All Iranian NGOs were established quite recently and are staffed by young university graduates with a tremendous commitment to addressing social and economic issues. The dialogue between Bank Keshavarzi, the NGOs and local Government is very open and constructive. In April 2005, Bank Keshavarzi requested IFAD to expand the project to a much broader scale.
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- Ministry of Agriculture, Forestry and Fisheries, Japan
- Ministry of Finance, Japan
- Ministry of Foreign Affairs, Japan
- Japan International Cooperation Agency
- Japanese Bank for International Cooperation
- Engineering and Consulting Firms Association, Japan
- Foundation for Advanced Studies on International Development, Japan
- Ministry of Foreign Affairs, France
- Ministry of Finance, France
- French Development Agency
- World Bank
- Asian Development Bank
- BMZ, Germany
- GTZ, Germany
- Pakistan Poverty Alleviation Fund
The International Fund for Agricultural Development (IFAD) is a specialized agency of the United Nations, dedicated to eradicating poverty and hunger in developing countries. Its work in remote rural areas of the world helps countries achieve the Millennium Development Goals. Through low-interest loans and grants, IFAD develops and finances projects that enable rural poor people to overcome poverty themselves.
IFAD tackles poverty not just as a lender, but as an advocate for the small farmers, herders, fisherfolk, landless workers, artisans and indigenous peoples who live in rural areas and represent 75 per cent of the world's 1.2 billion extremely poor people. IFAD works with governments, donors, non-governmental organizations, local communities and many other partners to fight the underlying causes of rural poverty. It acts as a catalyst, bringing together partners, resources, knowledge and policies that create the conditions in which rural poor people can increase agricultural productivity, as well as seek out other options for earning income.
IFAD-supported rural development programmes and projects increase rural poor people's access to financial services, markets, technology, land and other natural resources.