March 7, 2002

LATIN AMERICA AND THE CARIBBEAN NEED TO ENCOURAGE RURAL DEVELOPMENT TO REDUCE EXTREME POVERTY, IDB'S IGLESIAS SAYS At seminar ahead of the annual meeting of the Bank´s Board of Governors, experts analyze projects on sustainable management of natural resources, access to land and rural finances

FORTALEZA, Brazil - Inter-American Development Bank President Enrique V. Iglesias today urged Latin American and Caribbean countries to improve their rural policies and programs in order to reduce poverty and boost the region's competitiveness.

At the opening of a seminar on rural development held ahead of the IDB Board of Governors' annual meeting, Iglesias pointed out that, after years of oversight, rural economies are once again at the center of the development debate.

"Now we must focus on the basic elements of how to improve living standards in rural areas," he said. "Moreover, we do not foresee much growth at a regional level either this year or the following one. Once again, this requires us to think of concrete investment policies and programs that may yield better results."

In most Latin American and Caribbean countries, rural poverty has remained basically at the same levels over the past two decades. Nowadays, two out of three people who live in rural areas are poor. Nearly one quarter of the region's population is rural.

Iglesias said that in recent years Latin American and Caribbean countries and aid and development agencies have come to the conclusion that it is not feasible to reduce poverty and generate sustainable growth without investing in rural areas.

According to Iglesias, the region is forging a new strategic vision of the public sector's support for a sector that is crucial for equitable development.

This renewed interest in the rural agenda, he added, offers Latin America and the Caribbean opportunities to recover their competitiveness by promoting their agrifood sector and to cement their regional integration.

The seminar Development of Rural Economies in Latin America and the Caribbean: Sustainable Management of Natural Resources, Access to Land and Rural Finance was one of the first ones held ahead of the IDB's annual meeting, which will take place here March 11-13.

Germany's ambassador to Brazil, Uwe Kästner, and the governor of the Brazilian state of Ceará, Tasso Jereissati, also took part in the opening ceremony. Ceara’s Secretary for Rural Development, Pedro Sisnando, was scheduled to close the event.

Gov. Jereissati, in whose northeastern state 30 percent of the population is rural, said governments must support rural development in order to address urban poverty and urban violence. He also highlighted two Ceará programs that help rural communities launch productive enterprises and acquire farmland with state-funded financing.

The seminar was organized by the IDB's Rural Development Unit, in cooperation with other bilateral and multilateral agencies and financial support from the German government. It brought together government officials from across the region and delegates from private sector groups, technical and financial aid agencies, NGOs, universities, rural associations, and civil society leaders.

The seminar's main goal was to analyze regional experiences on reducing poverty through programs that address fundamental aspects of the rural sector: the sustainable management of natural resources, access to land and strengthening rural financial markets.

During the conference panelists presented papers on rural development in arid areas, poverty reduction in Andean countries, policies and instruments to foster rural land markets, group titling of indigenous, Afro-Caribbean and Afro-Latino lands, the role of farm development banks in granting access to rural credit, and the outlook for private rural financial services.

The presentations were followed by commentaries from specialists and discussions involving the seminar's participants, who on Friday will have opportunities to visit rural development projects in the state of Ceará supported by foreign aid agencies. The projects involve experiences in land reform, irrigation and prevention of desertification, and fighting rural poverty.

On Saturday, a ceremony will be held to mark the United States Agency for International Development's (USAID) joining the Rural Development Interagency Group, an effort to coordinate the actions of several bilateral and multilateral agencies that support rural development in Latin America and the Caribbean.

The group includes the IDB, the World Bank, the Inter-American Institute for Agriculture, the UN Food and Agriculture Organization, the Economic Commission on Latin America and the Caribbean, the International Fund for Farm Development and the Gernan Technical Cooperation Agency.

The institutions in the inter-agency group are also taking part in an exhibit of their programs in the region. The exhibit will be open at Fortaleza's convention center March 7-13.

IDB support for Rural Development

Over a four decade period since its founding in 1959, the IDB provided Latin American and Caribbean countries over $17 billion in financing for rural programs. Most of those loans were approved in the 1960s and 1970s, mostly for rural credit and irrigation projects. Over the following two decades the level of financing for rural projects dwindled, but given the region’s renewed interest in promoting rural development, the Bank has recently stepped up its lending and approved some landmark operations.

In 2001 it approved a $500 million loan for Mexico’s Procampo program, which provides financial support to small farmers. This program is linked to another IDB-supported initiative, Alianza para el Campo, which is aimed at boosting farm productivity and reducing rural poverty. The Bank also approved an $80 million loan for Chile that will benefit rural indigenous communities by improving their living standards. A $22.5 million loan will help Venezuela improve rural productivity by strengthening its National Institute of Agricultural Research.

The IDB’s Rural Development Unit supports the IDB’s efforts to expand its activities and improve the programs and projects it finances in rural social development, agroindustry productivity, sustainable management of natural resources, institutional modernization, rural financing and regional economic integration. This unit also performs technical studies, dissemnates lessons learned and best practices and organizes seminars for specialists.