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					                                 In , continuing the policy of maintaining a constant level of annual




     2
                                 project delivery,  approved  new projects. Roughly the same
                                 number of projects were completed during the year, and the number
                                 of ongoing projects is . The financing for these projects represents
                                  loans totalling  . million, a .% increase over last year’s
                                 lending level and a .% increase on the average for the past five years
     IFAD’S OPERATIONS IN 1999   (.% in Special Drawing Rights ₍₎ terms).
                                 Table 1
                                 IFAD AT A GLANCE, 1978-99


                                                                                                           1978-89             1990
                                 OPERATIONAL ACTIVITIES
                                   Loan Approvals a/
                                    Number of Projects                                                       263                 25
                                    Amount of Loans                               SDR million b/           2 454.7              210.0
                                                                                  USD million              2 898.4              285.7

                                   Regular Programme
                                    Number of Projects c/                                                     243                22
                                    Amount of Loans                               SDR million               2 293.5             185.7
                                                                                  USD million               2694.2              251.8

                                   Special Programme for Africa
                                    Number of Projects c/                                                     20                  3
                                    Amount of Loans                               SDR million                161.2               24.3
                                                                                  USD million                204.3               33.9

                                   Grants d/
                                    Number of Grants                                                         291                 38
                                    Amount of Grants                              USD million                144.9               17.6

                                   Total IFAD Loan and Grant Operations a/        USD million               3 043.4             303.3

                                   Cofinancing e/ f/                               USD million              3 617.1              187.1
                                    Multilateral                                                           2 933.4              168.7
                                    Bilateral                                                                673.6               17.4
                                    NGOs                                                                       6.6                1.0
                                   Domestic Contribution                          USD million              4 339.8              481.7

                                   Total Project Cost g/                          USD million             10 877.9              954.5

                                   Project Enumeration f/
                                    Number of Effective Projects under Implementation                                           150
                                    Number of Projects Completed                                              82                 18
                                    Number of Projects in Pipeline                                                               90
                                    Number of Approved Projects Initiated by IFAD                            171                 23
                                    Number of Recipient Countries                                             91                 92

                                 MEMBERS' CONTRIBUTIONS
                                  Regular Resources - at end of period h/         USD million               2 416.3            2 856.7
                                  Special Programme - at end of period h/         USD million                 285.3              298.7

                                 INCOME
                                   Investments                                    USD million                740.5              103.1
                                   Loans                                          USD million                126.7               32.0

                                 LOAN DISBURSEMENTS                               SDR million               1 357.4             131.0

                                 LOAN REPAYMENT                                   USD million                140.6               47.7

                                 GENERAL RESERVE
                                   - at end of period                             USD million                430.0               75.0

                                 USABLE RESOURCES
                                   - at end of period                             SDR million             18 786.0             2 745.0

                                 MEMBERSHIP AND ADMINISTRATION
                                  Member Countries - at end of period                                        143                144
                                  Professional Staff - at end of period i/                                    94                101
                                  Operating Expenses                            USD million                                      41.9
                                  - Provision for After Service Medical Benefits USD million



                                 a/ Amounts as originally approved.
                                 b/ SDRs are units of account as defined by the International Monetary Fund (IMF).
                                 c/ Twelve projects, partially financed under both the Regular Programme and the SPA, are
                                    counted only under the Regular Programme.
                                 d/ The total number of grants shown in this table differs for past years from that shown in
                                    earlier annual reports as the result of the review of old records of grant approvals.
                                 e/ The total does not correspond to the breakdown as it also includes amounts of proposed
                                    cofinancing for which sources have not been confirmed.
                                 f/ 1986 - 1995 figures include the SPA.



34
    As at the end of ,  had financed  projects in  countries for a total of  . billion in loans. Recipient gov-
    ernments and other financing sources in the borrowing countries – including project beneficiaries – contributed  . bil-
    lion to these projects. Another  . billion came from external cofinanciers, of which bilateral donors contributed
     . billion, multilateral donors  . billion and, finally,  . million from various international and northern
    s. In addition,  financed grants totalling  . million, bringing ’s total financing of loan and grant oper-
    ations over the period - to  . billion (Table ).




1991            1992              1993              1994              1995          1996             1997             1998             1999             1978-99



  22               24                31                28                33            33               29               30               30              548
 200.3            214.7             244.6             240.5             261.4         281.9            288.3            303.6            316.1          5 015.8
 275.6            298.0             338.8             349.3             391.7         408.0            397.7            413.2            432.7          6 489.1


  20               23                25                25                33            33               29               30               30              513
 177.9            205.5             201.2             223.8             253.9         281.9            288.3            303.6            316.1          4 731.0
 244.9            285.2             278.5             325.2             380.5         408.0            397.7            413.2            432.7          6 111.9


   2                1                 6                 3                 0             0                0                0                0               35
  22.4              9.2              43.5              16.7               7.5           0.0              0.0              0.0              0.0            284.8
  30.7             12.8              60.3              24.1              11.2           0.0              0.0              0.0              0.0            377.2


  25               31                45                71               132           212              258              110              124            1 337
   6.0              8.2              11.4              16.8              23.6          28.3             32.4             30.2             29.6            349.0

 281.6            306.3             350.1             366.1             415.3         436.3            430.1            443.4            462.3          6 838.1

  94.5             93.3             292.7             122.4             260.5         286.5            448.5            308.1            116.8          5 827.5
  73.4             78.1             244.8              91.3             214.8         250.7            323.8            264.9             89.2          4 733.0
  20.3              4.8              40.4              30.1              45.7          19.0            109.4             20.2             20.9          1 001.7
   0.8              3.9               0.5               0.9               0.0           1.5              9.3              2.7              2.5             29.7
 129.6            150.4             211.2             184.4             262.8         308.5            338.5            337.5            207.5          6 951.9

 499.7            541.7             845.8             656.0             915.0       1 004.0          1 187.4          1 059.6            757.8         1 9299.4


 154              159               163               173               191           200              200              211              214
  23               21                26                15                13            22               27               24               27              298
  98              110               127               131               107            98               94               89               68
  22               23                28                25                28            27               21               25               28              421
  94               95               100               103               106           110              111              113              114              114


2 988.8         2 988.0           2 945.7           3 008.0           3 027.5       3 012.3          3 308.5          3 376.4          3 350.0
  298.2           314.5             335.8             357.7             364.3         359.6            353.3            354.5            352.2


 109.6            113.9             153.9              22.7             282.2         148.9            163.9            187.9            196.5
  33.9             37.4              36.9              38.7              42.0          41.1             42.0             46.5             43.5

 125.7            112.9             139.1             129.9             128.2         180.5            189.0            220.6            207.9          2 922.0

  69.2             76.9              81.7              89.0             109.9         110.0            116.8            122.5            133.2          1 097.8


  80.0             85.0              90.0              95.0              95.0          95.0             95.0             95.0             95.0


2 897.0         3 117.0           3 246.3           3 300.9           3 481.6       3 563.3          3 755.6          3 882.2          4 179.9


 145              147               150               157               158           158              160              161              161
 111              118               105               107               111           126              126              126              132
  48.5             52.2              47.9              47.7              49.7          50.7             50.5             52.2             52.0
                                                                                                                                           2.6



    g/ Includes project component grants but not non-project-related technical assistance grants (TAGs).
    h/ Includes instruments of contributions net of provisions, non-convertible currency contributions, and special contributions but excluding complementary
       contributions. The prior year figures for IFAD have been adjusted to reflect the exchange rates ruling at the end of each period. The figures for 1978-89
       reflect the relevant amounts at the end of 1989.
    i/ Approved positions (excluding the positions of the President and the Vice-President. In 1999, six general service posts were converted to professional
       posts, therefore, the overall staffing levels remain unchanged.
    N.B. Any discrepancy in totals in all tables is due to rounding up of figures.




                                                                                                                                                                  35
     REGIONAL AND PRIORITY COUNTRY LENDING
     ’s Africa  and  regions (see the ’s regions section for a listing of countries within
     each administrative region) received an unprecedented .% of  lending. This increased
     share was in compensation for the extremely low level allocated in . As a result, the over-
     all share of these two regions reached .% of ’s loan portfolio (Table  and Chart ) –
     closer to the target of .% set by the Executive Board as an average for the next few years.

     Table 2
     IFAD PROJECT LENDING BY REGION UNDER THE REGULAR PROGRAMME
     AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999 (amounts in USD million)

                                                      1978-88       1989-99        1999         %         1978-99        %

     Africa I : Western and Central Africa
      Total                                            441.2         688.2           85.7       19.8%     1 129.4       17.4%
      Regular Programme                                363.2         571.8           85.7                   934.9
      Number of Projects                                46            56              7                     102
      Special Programme for Africa                      78.1         116.4            0.0                   194.5
      Number of Projects a/                              8            11              0                      19
      Recipient Countries b/                            22            24             24                      24

     Africa II : Eastern and Southern Africa
      Total                                            434.6         674.2          112.7       26.1%     1 108.9       17.1%
      Regular Programme                                379.9         582.5          112.7                   962.4
      Number of Projects                                36            51              7                      87
      Special Programme for Africa                      54.7          91.7            0.0                   146.5
      Number of Projects a/                              4             8              0                      12
      Recipient Countries b/                            16            20             20                      20

     Asia and the Pacific
      Regular Programme                                996.8       1 142.0          104.2       24.1%     2 138.8       33.0%
      Number of Projects                                66            74              6                     140
      Recipient Countries b/                            16            21             21                      21

     Latin America and the Caribbean
      Regular Programme                                365.7         662.5           76.0       17.6%     1028.1        15.8%
      Number of Projects                                43            55              5                     98
      Recipient Countries b/                            22            28             28                     28

     Near East and North Africa
      Total                                            428.7         655.2           54.1       12.5%     1 083.9       16.7%
      Regular Programme                                410.4         637.2           54.1                 1 047.6
      Number of Projects                                37            49              5                      86
      Special Programme for Africa                      18.3          17.9            0.0                    36.2
      Number of Projects a/                              2             2              0                       4
      Recipient Countries b/                            11            21             21                      21

     Total IFAD Loans                                2 667.0       3 822.1          432.7     100.0%     6 489.1       100.0%
      Regular Programme                               2 515.9       3 596.0         432.7                 6 111.9
      Special Programme for Africa                      151.1         226.1           0.0                   377.2

     Total Number of Projects                          242           306             30                    548
      Regular Programme                                228           285             30                    513
      Special Programme for Africa                      14            21              0                     35

     Total Recipient Countries a/                       87           114            114                    114
     a/ Projects financed by loans/grants from both the Regular Programme and the Special Programme for Africa (12 in all) are
        counted only under the Regular Programme.
     b/ As of the end of the period.




36
Chart 2
REGIONAL DISTRIBUTION OF LOANS, 1999



             Latin America and the Caribbean 17.6%
                                                                                            Near East and North Africa 12.5%




Asia and the Pacific 24.1%




                                                                                              Africa I and Africa II 45.9%
                                                                                              (including Western and Central Africa, 19.8%
                                                                                              and Eastern and Southern Africa, 26.1%)



Asia and the Pacific received .% of  lending. Its overall share of .% was slightly
higher than the Executive Board target of .%. The  share for Latin America and the
Caribbean was .% and on target (.%), though its overall share fell short at .%. The
Near East and North Africa region received the remaining .%, bringing its overall share to
.%, compared to a .% target.
Regardless of their geographical location, the Fund’s projects continued to be allocated pri-
marily to countries with serious economic difficulties that are associated with food insecurity.
Of the  . million approved in , .% went to what  has defined as low-income
food-deficit countries (Chart  and Table ).




Chart 3
LENDING TO PRIORITY COUNTRIES, 1978-1999 (in USD million)



1800


1600


1400


1200


1000


 800


 600


 400


 200


   0
          1978-82                 1983-86             1987-90                   1991-94                  1995-99


                Least Developed Countries                       Low-Income Food-Deficit Countries




                                                                                                                                             37
                                 Table 3
                                 SUMMARY OF IFAD PROJECT LENDING IN PRIORITY COUNTRIES UNDER THE REGULAR PROGRAMME
                                 AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999 (amounts in USD million)

                                                                                                                                           Number of Countries c/
                                            1978-88          %    1988-99          %       1999          %     1978-99          %      In Group  IFAD     With
                                                                                                                                                Members IFAD
                                                                                                                                                        Project

     Least Developed Countries (LDCs) a/
      Amount                                 1 139.4     42.7%      1 304.4    34.1%       193.7     44.8%      2 443.8     37.7%
      Number of Projects                       123                    124                   14                    247                      48         45          43

     Low-Income Food-Deficit Countries b/
      Amount                                 2 170.8     81.4%      2 940.9    76.9%       344.3     79.6%      5 111.6     78.8%
      Number of Projects                       192                    234                   23                    426                      82         77          75

     All IFAD Projects                      2 667.0                3 822.1                 432.7                6 489.1

     Total Number of Projects                 242                    306                    30                    548



                                 a/ The United Nations has classified 48 countries as "least developed countries" on the basis of the following criteria: low income,
                                    low literacy rate and low share of manufacturing in total output. The countries are: Afghanistan, Angola, Bangladesh, Benin,
                                    Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, D.R. Congo, Djibouti,
                                    Equatorial Guinea, Eritrea, Ethiopia, Gambia, The, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar,
                                    Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Sierra
                                    Leone, Solomon Islands, Somalia, Sudan, Tanzania, United Republic of, Togo, Tuvalu, Uganda, Vanuatu, Yemen and Zambia.
                                   N.B. Kiribati, Tuvalu and Vanuatu are not Members of IFAD.
                                 b/ FAO has identified 82 countries as low-income food-deficit countries: Afghanistan, Albania, Angola, Armenia, Azerbaijan,
                                    Bangladesh, Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde,
                                    Central African Republic, Chad, China,Comoros, Congo, Congo, D.R., Cote d'Ivoire, Cuba, D.P.R. Korea, Djibouti, Ecuador,
                                    Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, The, Georgia, Ghana, Guatemala, Guinea, Guinea-Bissau, Haiti, Honduras,
                                    India, Indonesia, Kenya, Kiribati, Korea, D.P.R., Kyrgyzstan, Laos, Lesotho, Liberia, Macedonia, Madagascar, Malawi, Maldives,
                                    Mali, Mauritania, Mongolia, Morocco, Mozambique, Nepal, Nicaragua, Niger, Nigeria, Pakistan, Papua New Guinea, Philippines,
                                    Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Sri Lanka, Sudan, Swaziland,
                                    Syria, Tajikistan, Tanzania, United Republic of, Togo, Turkmenistan, Tuvalu, Uzbekistan, Vanuatu, Yemen and Zambia.
                                   N.B. Kiribati, Turkmenistan, Tuvalu, Uzbekistan and Vanuatu are not Members of IFAD.
                                 c/ Some countries belong to more than one group, and thus there are overlaps in the group numbers.



                                 ALLOCATION OF LENDING BY LENDING TERMS1/
                                 Twenty-five of the  loans approved in  – equal to .% of lending – were on highly conces-
                                 sional terms (Table  and Chart ). Four loans representing .% of  lending were on interme-
                                 diate terms, and the remaining loan – .% of lending – was on ordinary terms 2/. Thus the 
                                 loans carried a far higher level of concessionality than usual, with an overall grant element of over
                                 half their face value. This naturally reflected the increased lending to African countries, most of whom
                                 are eligible for highly concessional loans as a result of their low per capita .
                                 Of ’s total lending under the Regular Programme during -, .% consisted of
                                 highly concessional loans, in line with the two-thirds target established in the Fund’s constitu-
                                 tional document “Lending Policies and Criteria”. Another .% were loans on intermediate
                                 terms and the remaining .% on ordinary terms.
                                 Africa received by far the majority of its loans on highly concessional terms: .% (Table 5).
                                 Similarly, Asia and the Pacific received .% on highly concessional and .% on interme-
                                 diate terms. These two regions have a higher incidence of very low-income countries. The situ-
                                 ation in the other two regions was somewhat different. Of loans to the Near East and North
                                 Africa region, .% were on highly concessional, .% on intermediate and .% on ordin-
                                 ary terms. Conversely, for the relatively better-off national economies in Latin America and
                                 the Caribbean, only .% of lending was highly concessional; .% was on intermediate
                                 and .% on ordinary terms.


                                 1/ These lending terms refer to loans made by IFAD to borrowing countries and have no bearing on the terms and conditions placed
                                    on credit lines offered through the projects.
                                 2/ IFAD provides loans on three different types of lending terms: highly concessional loans, which are free of interest but bear a ser-
                                    vice charge of 0.75% per annum and have a maturity period of 40 years, including a grace period of ten years; intermediate loans,
                                    which carry a variable reference interest rate equivalent to 50% of the interest charged on World Bank loans and have a maturity
                                    period of 20 years, including a grace period of five years; and ordinary loans, which carry a variable reference interest rate equal
                                    to that charged by the World Bank and a maturity period of 15-18 years, including a grace period of three years.


38
Table 4
                                                                                                                a/
SUMMARY OF IFAD LOANS BY LENDING TERMS UNDER THE REGULAR PROGRAMME, 1978-1999                                        (Amounts in USD million)


                                       1978-88             %     1989-99             %       1999           %        1978-99        %

Highly Concessional
  Amount                                1 635.4       65.0%       2 400.7         66.8%      366.0      84.6%         4 036.1    66.0%
  Number of Loans                         147                       196                       25                        343

Intermediate
   Amount                                 686.2       27.3%        733.1          20.4%       49.3      11.4%         1 419.2    23.2%
   Number of Loans                         64                       55                         4                        119

Ordinary
  Amount                                  194.3       7.7%         462.2          12.9%       17.5       4.0%           656.6    10.7%
  Number of Loans                          18                       35                         1                         53

Total Amount                           2 515.9     100%           3 596.0     100%           432.7     100.0%         6 111.9   100%
                         b/
Total Number of Loans                    229                       286                        30                       515

a/ SPA loans are not included in this table. Such loans were provided on highly concessional terms to the Africa and the Near
   East-North Africa regions.
b/ A project may be financed through more than one loan, and thus the number of loans may differ from the number of projects
   shown in other tables.




Chart 4
IFAD LOANS BY LENDING TERMS, 1999




                              Ordinary 4.0%

                                                                                                                 Highly Concessional 84.6%
   Intermediate 11.4%




Table 5
                                                                                                                                   a/
SUMMARY OF IFAD LOANS BY REGION AND BY LENDING TERMS UNDER THE REGULAR PROGRAMME, 1978-1999                                             (Amounts in USD million)


                                                                       Asia and the               Latin America and   Near East and
                                               Africa             %       Pacific            %      the Caribbean   % North Africa               %    Total          %
Highly Concessional Loans
  Amount                                       1 674.6         88.3%     1 656.3          77.4%        215.1         20.9%       490.2       46.8%    4 036.1      66.0%
  Percentage of Highly Concessional Loans         41.5%                     41.0%                        5.3%                     12.1%                 100.0%
  Number of Loans                                165                       111                          21                        46                    343

Intermediate
   Amount                                         193.2        10.2%        482.5         22.6%        390.1         37.9%       353.4       33.7%    1 419.2      23.2%
   Percentage of Intermediate Loans                13.6%                     34.0%                      27.5%                     24.9%                 100.0%
   Number of Loans                                 20                        30                         44                        25                    119

Ordinary
  Amount                                          29.6         1.6%           0.0         0.0%         423.0         41.1%       204.0       19.5%      656.6      10.7%
  Percentage of Ordinary Loans                     4.5%                       0.0%                      64.4%                     31.1%                 100.0%
  Number of Loans                                  4                          0                         33                        16                     53

Total Amount                                   1 897.3     100.0%        2 138.8      100.0%         1 028.1    100.0%          1047.6      100.0%    6111.9     100.0%

Percentage of Total IFAD Lending                  31.0%                      35.0%                     16.8%                      17.1%                100.0%

Total Number of Loans b/                        189                         141                        98                         87                   515

a/ SPA loans are not included in this table. Such loans were provided on highly concessional terms to the Africa and the Near East and North Africa regions.
b/ A project may be financed through more than one loan, and thus the number of loans may differ from the number of projects shown in other tables.




                                                                                                                                                                           39
                                       DISBURSEMENTS
                                       Cumulative disbursements on loans under the Regular Programme amounted to   .
                                       million (.% of commitment) at the end of , compared to   . million (.% of
                                       commitment) disbursed at the end of .
                                       Under the , cumulative disbursements at the end of  were  . million (.% of
                                       commitment), compared to  . million (.% of commitment) at the end of .
                                       In , total disbursements for loans under the Regular Programme and the  were  . million
                                       (.% of commitment) and  . million (.% of commitment), respectively.


     Table 6
     ANNUAL LOAN DISBURSEMENT BY REGION UNDER THE REGULAR PROGRAMME, 1979-1999 (amounts in SDR million)


                                            1989    1990     1991    1992     1993    1994    1995    1996      1997     1998*    1999*     1979 - 1999

     Africa                                  40.7    39.3     37.0    32.4     34.4    35.4    35.2      39.1    43.7      53.2    44.9             751.8

     Asia and the Pacific                     58.0    41.5     37.9    36.0     37.0    38.8    41.4      61.0    69.2      70.7    63.1           1 084.1

     Latin America and the Caribbean         20.6    17.3     15.0     9.4     20.5    21.5    19.7      24.6    33.1      37.2    38.9             426.7

     Near East and North Africa              23.2    20.2     18.8    19.1     25.8    18.0    12.8      27.0    20.8      40.9    51.5             463.9

     Total                                 142.5    118.3   108.7     96.9    117.7   113.7   109.1   151.7     166.8    202.0    198.4           2 726.5

     * Source: Loans and Grants System (LGS)



                                       Table 7
                                       LOAN DISBURSEMENT BY REGION AND LENDING TERMS UNDER THE REGULAR PROGRAMME, 1979-1999
                                       (amounts in SDR million)


                                                                                                 Highly
                                                                                              Concessional       Intermediate         Ordinary              Total

                                       Africa
                                         Amount                                                  649.7                  92.6               9.5              751.8
                                         Percentage of Effective Commitment                       63.5%                 79.6%             79.6%              65.3%

                                       Asia and the Pacific
                                         Amount                                                  824.6              259.5                  0.0          1 084.1
                                         Percentage of Effective Commitment                       73.1%              80.9%                 0.0%            74.8%

                                       Latin America and the Caribbean
                                         Amount                                                   75.1              201.3             150.3                 426.7
                                         Percentage of Effective Commitment                       58.4%              79.3%             62.0%                 68.3%

                                       Near East and North Africa
                                         Amount                                                  239.8              137.2                 86.9              463.9
                                         Percentage of Effective Commitment                       77.7%              54.0%                61.3%              65.9%

                                         Total                                                 1 789.2             690.6              246.7             2 726.5

                                         Total Percentage of Effective Commitment                 69.1%             73.0%                 62.3%              69.4%




40
COFINANCING OF IFAD PROJECTS
Two loans for a total of  . million – about % of  lending – were approved to cofi-
nance projects designed by other financiers (Table ).
The remaining  projects approved in  were designed and initiated by . Of these,
 attracted external cofinancing for  . million (.% of their cost) and domestic con-
tributions – from the borrowing governments or other local sources – for another  . mil-
lion, or .% of their cost. Finally,  -initiated projects were exclusively financed by 
(.% of their cost) and domestic sources (.%).
Chart  shows the sources of cofinancing of -initiated projects: just over three quarters of
total cofinancing was provided by multilateral agencies, just under % from other bilateral
sources and about % from s.

Chart 5
COFINANCING OF IFAD-INITIATED PROJECTS UNDER THE REGULAR PROGRAMME
AND SPECIAL PROGRAMME FOR AFRICA, 1978-1999



                        Bilateral USD 402.7 million
                        21.3%
                                                                                      Unidentified USD 39.7 million
                                                                                      2.1%
                                                                                              NGO USD 17.8 million
                                                                                              0.9%




                                                               Multilateral USD 1 431.3 million
                                                               75.7%


N.B. The amounts and percentages shown here represent shares of cofinancing of USD 1 891.5 million.




                                                                                                                      41
     Table 8
     COFINANCING OF IFAD PROJECTS UNDER THE REGULAR PROGRAMME AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999
     (Amounts in USD million)


                                                                   1978-1988        %    1989-1999      %     1999       %     1978-1999      %

     Projects Initiated by Cooperating Institutions
       IFAD a/                                                          985.5    14.7%      400.3     18.4%    21.7    34.2%    1 385.8     15.6%
       Cofinanced b/                                                   2 698.1    40.4%    1 237.9     56.9%    32.0    50.5%    3 936.0     44.4%
       Domestic                                                       3 001.7    44.9%      535.8     24.6%     9.7    15.3%    3 537.5     39.9%
       Total b/                                                       6 685.3   100.0%    2 173.9    100.0%    63.5   100.0%    8 859.2    100.0%
       Number of Projects (including grant-financed projects)             90                  39                 2                 129

     IFAD-Initiated and Cofinanced Projects
       IFAD a/                                                          835.3    39.7%    2 199.3     45.0%   224.4    51.2%    3 034.5     43.4%
       Cofinanced b/                                                     705.1    33.5%    1 186.4     24.3%    84.8    19.4%    1 891.5     27.1%
       Domestic                                                         562.3    26.7%    1 501.4     30.7%   128.8    29.4%    2 063.7     29.5%
       Total b/                                                       2 102.7   100.0%    4 887.1    100.0%   438.1   100.0%    6 989.8    100.0%
       Number of Projects (including grant-financed projects)             87                 180                15                 267

     IFAD-Initiated and Exclusively-Financed Projects
       IFAD a/                                                          867.6    58.8%    1 232.1     62.3%   187.3    73.1%    2 099.7     60.9%
       Domestic                                                         606.7    41.2%      744.0     37.7%    68.9    26.9%    1 350.7     39.1%
       Total b/                                                       1 474.3   100.0%    1 976.1    100.0%   256.3   100.0%    3 450.4    100.0%
       Number of Projects (including grant-financed projects)             65                  89                13                 154

     All Projects
        IFAD a/                                                      2 688.4     26.2%    3 831.6     42.4%   433.5    57.2%    6 520.0     33.8%
        Cofinanced b/                                                 3 403.2     33.2%    2 424.3     26.8%   116.8    15.4%    5 827.5     30.2%
        Domestic                                                     4 170.7     40.6%    2 781.2     30.8%   207.5    27.4%    6 951.9     36.0%
        Total b/                                                    10 262.3    100.0%    9 037.1    100.0%   757.8   100.0%   19 299.4    100.0%
        Number of Projects (including grant-financed projects)          242                  308                30                 550

     a/ IFAD amount includes grants for project components.
     b/ Includes cofinancing for which sources have not yet been confirmed.




                                     Projects designed and developed by  have generated  . billion in cofinancing during
                                     -. The bulk of this, about  . billion, came from multilateral agencies, notably the
                                     World Bank/International Bank for Reconstruction and Development ₍₎, with .% of
                                     multilateral cofinancing and the Arab Fund for Economic and Social Development ₍₎
                                     with .% (Chart 6).
                                     Another  . million came from bilateral donors. Foremost among them were Germany,
                                     with .% of bilateral cofinancing, and The Netherlands, with .% (Chart ).
                                     Of the  projects, those initiated by  received  . million in bilateral cofinancing.
                                     The United Kingdom and the United States of America provided the largest shares, with
                                      . million and  . million, respectively. Multilateral agencies contributed another
                                      . million to these projects; the foremost contributor was the World Food Programme
                                     ₍₎, with  . milllion, followed by the  Fund, with  . million. This informa-
                                     tion is based on cofinancing arrangements finalized at time of project approval by the Executive
                                     Board.




42
Chart 6
COFINANCING OF IFAD-INITIATED PROJECTS BY MULTILATERAL DONORS UNDER THE REGULAR
PROGRAMME AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999 (amounts in USD million)

300




240




180




120




 60




     0

                                                                                                    %
                                                                                               .7                                                                                                                                                                   %
                                                                                          •2                                                                                                                                                                   .7
                                                                                     .7                                                                                                                                                                   •8                                     5.
                                                                                                                                                                                                                                                                                                      5%
                                                                                                                                                                                                                                                                                                                         2%
                                      %                                        38                                         %                     4   %
                                                                                                                                                                    7%
                                                                                                                                                                                                                                   %
                                                                                                                                                                                                                                                 5.
                                                                                                                                                                                                                                                    1                     0%                                        8.
                                   .5                    6%                                      %                     .3                    4.                 .                      8%                %                      .8                                    .                     •1
                              •2                    2.                   ion                  .0                  •4                     •                   •6                   6.                  .9                   •7               12                     •9              1.
                                                                                                                                                                                                                                                                                      5                        •1
                         .0                    •                    Un                   •4                  .9                     .1                  .4                    •                  •6               1.
                                                                                                                                                                                                                       6               nd                 8.
                                                                                                                                                                                                                                                               3                                      9.
                                                                                                                                                                                                                                                                                                           9
                    36                    .1                    n                   .8                  60                     63                96                      .6                 .6                                    Fu                                          22
                                     37                    ea                  56                P                    rs                                            97                 98                    11                                   12                      D                  25
                D                                      p                                                                                                                                                                      C
             OA               CI
                                 E
                                                   uro                   B                    ND                  the                    DB                   DB                   A                  DF                   PE               FP                     FE
                                                                                                                                                                                                                                                                      S                 RD
         B               B                     E                    ID                    U                  O                      As                   Is                   ID                 Af                    O                W                      A                   IB


N.B. The amounts and percentages shown here represent the share of each multilateral in total multilateral cofinancing of USD 1 431.3 million.

Chart 7
COFINANCING OF IFAD-INITIATED PROJECTS BY DONOR MEMBER STATES (BILATERALS) UNDER THE REGULAR PROGRAMME
AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999 (amounts in USD million)


80



70



60



50



40



30



20



10



 0


                                                                                                                                   6%
                                                                                                                                2.                                                                                 0% %
                                                                3%               7%                        %          3% 5 •                                                                                    6.
                                      2%
                                                            .                                           .
                                                                                                       .2          2.                                   4%                    1%         4%                              3
                                0.                       •0                             %            •0
                                                                                                     1           •      10
                                                                                                                           .
                                                                                                                                   .4
                                                                                                                                      %
                                                                                                                                           .2
                                                                                                                                              %
                                                                                                                                                     5.         .7
                                                                                                                                                                   %       0.         0.          .3
                                                                                                                                                                                                     %       •1       8.
                              •       1.
                                         4        4%         5 %        8            .9           •
                                                                                                            9.
                                                                                                               3               •3       •5         •         •9         •1         •1           2         .3       •1
                           .7                  0.         0.         2.          •0          4.
                                                                                                9
                                                                                                         s          om 3.7                      .6       .2           8          8         •1          64       .7
                         0         nd        •          •                                                        gd                  .1      21                     .          .        .7                   73
                               ala         8       2.
                                                      1        urg        3.
                                                                             5          nd          ate                  1       21                  39          40        41       49           nd
                                                                                                                                                                                                    s
                   ue
                      la               1.                  bo                       rla          St          Kin alia          y         rk        a                    n                    rla         ny
                ez          Ze      an         nd       em         an
                                                                      d
                                                                              i tze        t ed         t ed       tr       wa        ma       ad        g ium ede            n  ce       he          ma
            n             w               p  a             l     l        x                                                i                 i               s            r                 n           n                  l                          a                   t             r
         Ve          Ne              Ja              Ire             Lu              Fin             Sw             Un               Un                 Au           No                De         Ca               Be              Sw            Fr                 Ne             Ge


N.B. The amounts and percentages shown here represent the share of each bilateral in total bilateral cofinancing of USD 402.7 million.


                                                                                                                                                                                                                                                                                                                              43
     PORTFOLIO MANAGEMENT
     Since , a standardized project performance reporting and rating system called the project
     status report ₍₎ has been applied across regional divisions. In  a marked improvement
     was noted in the preparation and completion of s.
     This new approach to the portfolio review has contributed to a more efficient analysis of port-
     folio performance. The s, which serve as the building blocks for the portfolio review, con-
     tain information derived from supervision, follow-up and evaluation missions, and mid-term
     reviews. They also contain data collected from periodic progress reports on project perform-
     ance; these reports are prepared by the staff of all -financed projects.
     s support a process that starts with the review of single projects, leads to the assessment of
     the performance of the regional portfolios and, finally, ends with an assessment of ’s aggreg-
     ate project portfolio. s contain a number of indicators of project performance. As these
     indicators are analysed, they are transformed into a single composite indicator of the overall
     performance of each project. Using this information,  staff members can identify prob-
     lems and take measures to address them. During , in support of the regional portfolios,
      staff joined regular supervision missions and, when necessary, launched follow-up mis-
     sions to assist under-performing projects. When the situation warranted, in-country and in-
     region resource groups were established to support project implementation. In some cases, the
     grant programme has been used extensively in support of the loan portfolio.
     The knowledge that is gained from the analysis of the current project portfolio is also being
     used to improve the design of new projects. For example, the setting up of an effective monit-
     oring and evaluation system was proving to be a challenge to a number of ongoing projects.
     This was one of the reasons  decided to apply the logframe technique to all new projects.
     Utilizing the logframe, indicators for measuring progress of key activities are defined at the
     outset. In this way, design targets for project implementation are clearly defined. In the next
     phase, the logframe technique will be applied at the project level, where it will be used during
     implementation to encourage participatory approaches, for example, in the preparation of the
     annual programme of work and budget and in monitoring and evaluation.
     Another problem facing some projects has been delay in project start-up activities. Such delays
     tend to retard the smooth implementation of a project. Slow progress in implementation was
     also found to be due to inadequate coordination between the core project management unit
     and the associated implementing agencies. For example, if the agencies responsible for project
     implementation delay the submission of the accounting returns required to receive the next
     tranche of project funds, then the flow of loan funds is also delayed. Likewise, if the central
     accounting units of projects do not submit timely withdrawal applications to reimburse pro-
     jects’ special accounts, this can also adversely affect loan disbursement. In some cases, delays in
     project implementation have been caused by hold-ups in procurement of goods and services.
     With the use of periodic project portfolio reviews, these types of problems have been identi-
     fied and corrected. The result is an overall upward trend in loan disbursement. Orderly pro-
     ject start-up activities are proceeding for all new projects. Based on the lessons learned from
     the implementation of ongoing projects, potential problem areas are being pinpointed and
     corrective actions are being taken before situations become problematic. For example, during
     project start-up workshops, country portfolio managers ₍s₎ provide guidance in the setting
     up of accounting systems. When necessary, they also help arrange the preparation of project-
     specific loan-administration manuals.
     When project implementation problems are identified, a time-bound plan of action is drawn
     up, and responsibility is designated for the implementation of remedial measures. Both 
     and its cooperating institutions provide backstopping support in implementing the agreed
     action plan.




44
All-in-all, the successful monitoring and managing of the project portfolio requires assessment
of the performance of all project components, with a view to streamlining project activities.
This assessment can result in the reallocation of loan funds in favour of best-performing com-
ponents, or partial cancellation of loan amounts allocated to non-performing components.


KNOWLEDGE MANAGEMENT
When the Rapid External Assessment called on  to build up its institutional identity as a
knowledge organization on rural poverty eradication,  took a variety of steps to respond.
As a result, the Evaluation Knowledge System ₍₎ was created, the project development
cycle was re-engineered as a learning cycle, and the Fund sharpened its focus on building stra-
tegic partnerships through the sharing of knowledge.
In general, however, a large part of the Fund’s operational knowledge continues to be man-
aged on a country-by-country and regional basis. Value is added when knowledge is shared
across the boundaries of functional units and business processes. This is being achieved through
a new method of sharing experience and knowledge within the Fund (and, over time, with its
partners). During , four thematic knowledge-management groups were established. They
are focusing on sustainable rangelands management, small-scale enterprise, diagnostic methods
and small-scale irrigation. Based on their findings, the Fund hopes to expand ’s knowledge
of rural poverty alleviation along these thematic lines. It is expected that the groups will pro-
duce findings in a variety of media: web pages, brochures, multimedia tools, and publications;
members will also conduct a series of workshops and seminars.


PROJECT SUPERVISION AND COOPERATING INSTITUTIONS
The ongoing portfolio of  projects is being administered by ten cooperating institutions
₍s₎ and by . The United Nations Office for Project Services ₍₎ supervises over %
of the portfolio, followed by the World Bank with %. At the beginning of ,  projects
were transferred from the World Bank to , and one was transferred to the Andean
Development Corporation ₍₎, bringing it to third place with responsibility for supervising
7% of the total number of ongoing projects (Table ).

Table 9
IFAD COOPERATING INSTITUTIONS ENTRUSTED WITH LOAN ADMINISTRATON AND PROJECT SUPERVISION,
REGULAR PROGRAMME AND SPECIAL PROGRAMME FOR AFRICA


                                                       Projects at End-88 Projects at End-98             Projects at End-99a/
COOPERATING INSTITUTIONS                                               Actual
                                                        Number         %        Number          %          Number       %

African Development Bank (AfDB)                            14           8            7           3                6      2
Andean Development Corporation (CAF)                        6           3           16           6               17      7
Arab Fund for Economic and Social Development (AFESD)      11           6           16           6               16      6
Asian Development Bank (AsDB)                              16           9            9           4                7      3
Caribbean Development Bank (CDB)                            5           3            5           2                5      2
Central American Bank of Economic Integration (BCIE)        3           2            5           2                6      2
Inter-American Development Bank (IDB)                      10           5            1           0                1      0
United Nations Development Programme /
 Office for Project Services (UNOPS)                        32          17         113          45               134    53
West African Development Bank (BOAD)                        4           2          13           5                11     4
World Bank (IBRD/IDA)                                      83          45          50          20                34    13

To be supervised directly by IFAD                            -           -          14           6               15      6

Total b/                                                  184        100          249         100               252   100
a/ For some closed projects the loan account will be kept open for final settlement of withdrawal application.
b/ The total refers to the number of approved, uncompleted projects.




                                                                                                                                45
     Both annual and follow-up meetings with all s took place in . During the annual meet-
     ings, participants discussed the overall framework of collaboration and the annual programme
     of work, including timetables for supervision. The agreements reached during these meetings
     identified country and project-level follow-up work that must be completed by both  staff
     members and their counterparts in the various s. One agreement made during these sessions
     focused on the need to increase the level of awareness among project staff on the  issue. In
     response to this agreement, contingency plans were formulated and measures were adopted to
     mitigate possible adverse consequences.
      staff members were also briefed on various implementation aspects of projects entering the
     portfolio. Project start-up workshops were prepared with the participation of all parties involved
     in project implementation at the country level. These workshops provided an opportunity to
     jointly review project activities and to understand more fully the respective responsibilities of the
     implementing agencies. The roles of  and s were explained to minimize misunderstandings
     during project implementation. Regarding ongoing projects, numerous joint missions were car-
     ried out, with s providing supervision, mid-term review, evaluation and backstopping.
     By December , the last of the  projects to be directly supervised by  was approved by
     the Executive Board. Grants under the Special Operations Facility ₍₎ were given to  of these
     projects. As most of them have only recently been approved, efforts were focused on ensuring
     timely signature of the loan agreements and fulfilment of the conditions of loan effectiveness. As a
     result, a total of  loans have now been signed and, of these, seven have been declared effective.


     GRANT FINANCING
     In the last few years, the ceiling for grant financing has been raised from % to .% of the
     annual programme of work, increasing the overall level of concessionality in ’s financing
     while strengthening the grant programme. In , a total of  . million was approved in
     the form of grant financing, about .% of total loans and grants (Table ). During the last
      months,  has been actively engaged in a comprehensive review of its grants, partly
     because of their growing importance and also to further improve accountability and trans-
     parency in the use of funds.
     A major part of the review was an internal audit of grants by category that assessed compli-
     ance and utilization. The review spawned a set of recommendations designed to strengthen
     processes, including grant design, selection, utilization, monitoring and reporting. The imple-
     mentation of these recommendations will increase the accountability, relevance and impact of
      grants.
     The Fund intends to re-establish close functional linkages between grants and loans and between
     these and regional strategies. Interim outputs of the review process include the internal audit
     report “Grants/Technical Assistance”, a revised paper on “ Policy and Strategy for Grant
     Financing” and the first “Progress Report on the Implementation of Technical Assistance Grants
     for Agricultural Research”. A proposal is also under consideration to extend this last reporting
     procedure to include all types of grants.
     The fundamental objective is that ’s grant assistance should pave the way for a better and
     more effective lending programme. In general, the impact of grants has been found to be great-
     est when such grants were either directly linked to projects financed by , or when the activ-
     ity financed with the grants met the expressed need of national and/or regional organizations.
     For example, if grant funding for technical innovation or for training is in response to a spe-
     cific, already-identified need, then the grant is much more likely to have a positive, lasting
     impact. Grants that are “supply-driven” at the initiative of  and other cofinanciers are
     much less likely to have such impact.




46
There are two main types of  grants:
Grants directly linked to the project cycle (all are related to the formulation and implementa-
tion of  projects):
• Project Component                                                                • Environmental Assessment ₍₎
• Project Development Fund ₍₎                                                   • Special Operations Facility ₍₎
Grants not directly linked to the project cycle:
• Consultative Group on International
  Agricultural Research ₍₎-SupportedResearch                                  • Non--Supported Research
• Training and Other                                                               • / Extended Cooperation
                                                                                     Programme ₍₎

Table 10
SUMMARY OF GRANT FINANCING UNDER THE REGULAR PROGRAMME
AND THE SPECIAL PROGRAMME FOR AFRICA, 1978-1999 (Amounts in USD million)


                                                        1978-1988         1989-1999             1999        1978-1999             %

Project Preparation
    Amount                                                      14.7              19.4             0.0              34.1       9.8%
    Number of Grants                                            94                94               0               188

Project Component
    Amount                                                      21.1               4.0             0.6              25.1       7.2%
    Number of Grants                                            30                 7               2                37

Project Development Fund
    Amount                                                       0.0              38.5             8.2              38.5      11.0%
    Number of Grants                                             0               391              21               391

Research
   Amount                                                       83.0              55.6             7.0             138.6      39.7%
   Number of Grants                                            110                67               7               177

    Research CGIAR
     Amount                                                     59.0              34.7             4.6              93.7      67.6%
     Number of Grants                                           82                41               4               123

    Research Non-CGIAR
     Amount                                                     24.0              20.9             2.4              44.9      32.4%
     Number of Grants                                           28                26               3                54

Training and Other
    Amount                                                      10.3              72.8             9.7              83.1      23.8%
    Number of Grants                                            13               168              36               181

Special Operations Facility
   Amount                                                        3.0              12.3             1.8              15.3       4.4%
   Number of Grants                                             13               132              24               145

Environmental Assessment
    Amount                                                       0.0               3.8             0.1               3.8       1.1%
    Number of Grants                                             0                47               2                47

IFAD/NGO ECP
    Amount a/                                                    0.0             10.5              2.2              10.5       3.0%
    Number of Grants a/                                          0              171               32               171

Total Amount b/                                               132.1             216.9            29.6             349.0     100.0%

Total Number of Grants b/ c/                                  260             1 077             124             1 337

a/ Including IFAD/NGO Advisory Group meetings and consultations.
b/ During the period 1986-1995, 86 grants were approved for a total of USD 24.1 million under the SPA.
c/ The total number of grants shown in this table differs for past years from that shown in earlier annual reports as the result of
   the review of past records of grant approval.




                                                                                                                                      47
     GRANTS FOR ENVIRONMENTAL ASSESSMENT (EA)
     The Fund’s  process provides the framework for addressing environmental and natural-
     resource management issues in project design. All -initiated projects entering the pipeline
     are subjected to environmental screening and scoping. Proposed projects that could contribute
     to environmental problems receive an initial environmental examination ₍₎ and, where neces-
     sary, a full  is conducted before the final appraisal of the project. In such cases, grants for 
     are provided for proactive assessment during preparation of the projects.
     In , grants were approved for the following s, which measurably enhanced the design of
      projects in Cambodia and Rwanda.
     • A grant of    in support of the Agricultural Development Support Project to Seila
       in Cambodia.
     • A grant of    related to the planned Umutara Community Resources Development
       Project in Rwanda.


                                                                              BOX 12
                                IFAD’S APPROACH   TO   ADDRESSING ENVIRONMENTAL ISSUES

     While IFAD maintains constant awareness of potential environmental dangers, three areas of focus are
     of particular relevance. These regard situations in which:
     •   IFAD rural poverty alleviation projects might contribute to undue degradation of the natural resource
         base on which the poor depend;
     •   current or projected natural resource degradation or environmental risks might limit the success and
         sustainability of an IFAD poverty-alleviation project; or
     •   the reversal of natural resource degradation trends would provide significant quantifiable and non-
         quantifiable economic benefits to IFAD target groups in the short or long term.
     Approximately 70% of IFAD’s projects are located in ecologically fragile, marginal environments. The poor
     in these areas are often locked into patterns of natural resource degradation. In such areas, before a pro-
     gram of sustainable agricultural development can be put into place, greater attention must be focused
     on the linkages between poverty and environmental degradation. For IFAD, this is especially true during
     its project design phase. Thus its projects address the environmental aspects of poverty alleviation as a
     necessary and inescapable operational outcome of the Fund’s exposure to marginal areas.
     To ensure that its projects are environmentally sound, IFAD employs EA to address environmental and
     natural resource management issues in project design. Formal administrative procedures for EA, com-
     parable to those of IFAD’s major partners of International Financial Institutions (IFIs), were adopted in
     September 1994. In addition to mainstreaming environmental concerns into the project cycle, IFAD is
     promoting a number of broader environmental initiatives:
     •   thematic reviewing of past EA experience to evaluate its effectiveness as a project design process;
     •   thematic reviewing of approaches to community-based management of natural resources;
     •   providing support to member countries to combat drought and desertification through national,
         regional and subregional action programming under the Convention to Combat Desertification;
     •   collaborating with governments to identify and prepare projects eligible for Global Environment Facility
         (GEF) cofinancing; and
     •   developing partnerships to tackle other global environmental issues such as transfer payments for
         environmental services; conservation of tropical forests; biodiversity conservation; and development
         and transfer of environmentally appropriate agricultural production processes and technologies.




48
GRANTS FOR AGRICULTURAL RESEARCH
 continues to be the only multilateral financial institution that funds research targeting
rural poor farming systems of the developing world. In , as chair of the Donor Support
Group for the Global Forum on Agricultural Research ₍₎,  helped foster effective
research partnerships in this area. By building on the strengths and comparative advantages of
the different actors in the global agricultural research community (National Agricultural
Research Systems, farmer organizations, the private sector, s, agricultural universities in
developing countries and advanced research institutions in the developed world),  helped
mobilize international support for strategic partnerships that will bring the combined forces of
cutting-edge science to bear on the agricultural constraints faced by resource-poor farming
communities.
The in-house review of ’s strategy for grant financing took into account the strategic object-
ives of the Fund’s support to technology development. In this context, the research grants
approved in  support programmes that concentrate on the following strategic interests:
•  target groups and their household-food-security strategies, particularly in remote and
  marginalized agro-ecological areas;
• technologies that build on traditional knowledge systems, are gender-responsive, and
  enhance and diversify the productive potential of resource-poor farming systems by improv-
  ing productivity and addressing production bottlenecks;
• access to productive assets and the sustainable and productive management of such resources;
• a policy framework that provides the rural poor with an incentive to reach higher levels of
  productivity, thereby reducing their dependence on transfers; and
• an institutional architecture within which formal and informal, public and private-sector,
  local and national institutions provide services to the economically vulnerable according to
  their comparative advantage.
These strategic interests reflect a commitment to build stronger links between -financed
research programmes and ongoing or future -supported projects, increasing the likelihood
that technologies thus developed will be adopted by the Fund’s target groups. In , efforts
to improve these links included a series of consultations with a number of ’s agricultural
research partners. The meetings sought strategies to improve the diffusion to target groups of
technologies generated by Fund-supported agricultural research.
Development of such strategies is a major focus because, while the technologies generated
through  grant support are of significant value to small farmers, further effort is required
to move these technological breakthroughs ‘off the shelf ’ and place them in a wider develop-
mental context. Ideally,  intends to ensure that appropriate technologies do not remain
confined to the geographic area in which they are originally validated; rather, the proven tech-
nologies become available for adaptation and use in a broader range of environments.
One instrument currently being developed is the technical advisory note ₍₎. The s docu-
ment recommended technologies and illustrate their applications in a variety of socio-
economic and agro-climatological circumstances. A workshop was held in Nairobi in April 
to promote s among research institutions in Africa, and three workshops are being planned
for Asia and the Pacific, the Near East and North Africa, and Latin America and the Caribbean.
In ,  introduced a comprehensive implementation progress report ₍₎ to track the
general health and effectiveness of its agricultural research grants. This systematic review of the
research grant portfolio identified lessons learned that will improve the design and manage-
ment of future research grants. Because of its success, the  will become part of the annual
work programme of ’s grant coordination.
In , the following grants were approved for agricultural research by -supported inter-
national centres:
• A grant of  . million to the International Crops Research Institute for the Semi-Arid
  Tropics ₍₎ to finance a programme of adaptive research with resource-poor small-


                                                                                                      49
        holder farmers of the Sahel. The adaptive research aims to increase sorghum and pearl
        millet production and will help smallholders gain access to good quality seeds of improved
        varieties of sorghum and pearl millet, and develop sound management techniques for soil
        restoration and the control of insect pests and diseases.
     • A grant of    to the International Livestock Research Institute ₍₎ to support a
        regional programme that will have direct benefit for the large majority of small ruminant
        producers in south and southeast Asia. The programme will develop an integrated approach
        to the control of gastrointestinal parasites of small ruminants. It will test various combina-
        tions of existing control options to develop new cost-effective approaches to worm control.
     • A grant of  . million to the International Centre for Research in Agroforestry ₍₎ to
        support a research programme for the diversification of smallholder farming systems in
        western and central Africa. Through the cultivation of indigenous trees, the programme aims
        to increase income and reduce slash-and-burn practices. The programme will document and
        conserve endangered but economically important indigenous fruit trees in four countries;
        investigate agroforestry land-use systems and ownership and gender-related issues; and under-
        take research to improve non-extractive utilization and marketing arrangements for the fruit,
        so that poor producers, especially women, can capture greater economic benefits.
     • A grant of  . million to the International Institute of Tropical Agriculture ₍₎ to sup-
        port an applied adaptive research programme on improved yam technologies in five west-
        ern African countries. Research will be carried out in the areas of soil-fertility management;
        integrated pest and disease management; the introduction, testing and dissemination of
        improved yam varieties; and post-harvest technology.
     In addition, the following grants were approved in  for agricultural research by non--
     supported international centres:
     • A grant of  . million to the International Fertilizer Development Centre ₍₎ to sup-
        port a regional programme on environmentally friendly nutrient management technologies
        to help disadvantaged farmers in marginal rice-producing areas of Bangladesh, Indonesia
        and Nepal. The programme aims to reduce farmers’ dependence on off-farm inputs through
        proven fertilizer technologies (using deep point placement of Urea Super granules), so that
        they can produce more food at less expense and risk.
     • A grant of    to the International Centre of Insect Physiology and Ecology ₍₎
        to support a regional programme for the dissemination of improved apiculture technologies
        to farmers in northern Africa. Applied research and training of extension agents and small-
        holder bee-keepers will cover queen-rearing and breeding, management of honey-bee dis-
        eases and honey-quality analysis to improve the marketability of honey-bee products. The
        goal is to improve the income-generation potential of northern African bee-keepers.
     • A grant of    to the Food and Agriculture Organization of the United Nations ₍₎
        for the Subregional Project for the Integration of Aquaculture into Irrigated Small-Farming
        Systems for Southern Africa. The grant will finance practical applied field trials of integrated
        aquaculture-agriculture under the Smallholder Irrigation and Water Use Programme financed
        by  in Zambia. The results will be used to provide linkages and parallel replication under
        the -supported irrigation programmes in Malawi and Zimbabwe. The grant has been
        designed to link closely with a broader programme for aquaculture in the Southern African
        Development Community region; that programme is being implemented by , with Belgian
        financing. -supported activities will specifically target applied research for resource-poor
        smallholders, and the results of the overall programme will contribute to the knowledge base
        for integrating fish farming and agriculture in the region.

     GRANTS FOR TRAINING AND OTHER ACTIVITIES
     Capacity-building activities and diverse forms of training are invariably included in  pro-
     jects, many of which also include workshops and special studies. In certain circumstances,
     however, grant funds may be allocated for regional and subregional training programmes and/or
     policy initiatives that do not “fit” into individual projects. (These funds are used to address
     region-specific concerns and are reported in the sections dedicated to ’s five regions.) In


50
Table  the grants reported on include  small grants below    approved directly
by the President of . Those grants are not presented in the texts that follow.
The following four grants, which were approved by the Executive Board in 1999, are described
in further detail in the section covering Latin America and the Caribbean:
• A grant of    to the Group for Agricultural Research to finance a new three-year
    phase of the Southern Cone Training Programme in Rural Development ₍₎.
• A grant of    out of total programme costs of  . million to the Southern
    Cone Common Market ₍₎ to finance activities over three years under the
    Institutional and Policy Support Programme to Alleviate Rural Poverty in the 
    area. P articipating  countries will contribute    to cover costs associ-
    ated with human resources, facilities, equipment and supplies.
• A grant of  . million out of total programme costs of  . million to the Centre for
    Studies and Development Promotion ₍₎ for the second phase of the Programme for
    Strengthening the Regional Capacity for Monitoring and Evaluation of Rural Poverty-
    Alleviation Projects in Latin America and the Caribbean ().
• A grant of    to the Inter-American Institute for Cooperation on Agriculture
    ₍₎ to finance the third phase of the Regional Support Programme for the Development
    of South-American Camelids ₍₎.
In , the following grant was approved by the Executive Board for eastern and southern Africa :
• A grant of    to  for the Multi-Donor Food Security and Rural Development
    Hub. This project responds to a growing need to give support to regional and national insti-
    tutions in rural development programme formulation and implementation. The grant will
    support the Hub’s technical capacity in critical areas of smallholder development.
During , three grants were approved by the Executive Board in the category “Other”.
These grants are global in scope and application:
• A grant of    for  Assistance to the /Netherlands Conference on the Multi-
  Functional Character of Agriculture and Land (Maastricht, - September ). Based
  on its long operational experience and integrated approach to diverse facets of agricultural
  development, coupled with its integral involvement in the Convention to Combat
  Desertification, the Fund contributed substantially to the preparation of two major tech-
  nical reports: the concept paper and the case study paper.
• A grant of  . million to the Global Mechanism of the United Nations Convention to
  Combat Desertification in Countries Experiencing Serious Drought and/or Desertification,
  Particularly in Africa ₍₎. The funds will be used to support the basic framework for the
  special resources for  finance. Activities being financed by the grant include the prepar-
  ation of national, regional and subregional action programmes, the setting up of access to
  resources for a major group of stakeholders who are not parties to the Convention, the
  transfer of technology and use of traditional/indigenous knowledge, and the establishment
  of national desertification funds.
• A grant of    to finance programme activities leading to the publication of the
  “ Rural Poverty Report ”. These activities will include a series of four workshops
  and twelve studies on selected themes in order to deepen the Fund’s understanding of the
  conditions and causes of rural poverty and identify the most innovative approaches to poverty
  reduction. The studies and workshops will be conducted in close consultation with a con-
  tracted research institution, scholars, development practitioners and appropriate  staff.

GRANTS TO NGOS – THE IFAD/NGO EXTENDED COOPERATION PROGRAMME
While s participate in the overall technical Assistance Programme, they are exclusive recipi-
ents of grant financing under a special facility established in  – the / Extended
Cooperation Programme.  conducted an internal audit of the  during / (see the
section in Part Four entitled “Partnerships with Non-Governmental Organizations and Civil
Society”). Altogether  grants were approved in this category during , for a total of
 . million.

                                                                                                     51
     NUMBER OF ONGOING PROJECTS BY COUNTRY AND BY REGION 1999 a/
                                                              Latin America and the Caribbean                            Africa I: Western and Central Africa

     214     Projects                                         41    Projects                                             42   Projects
      93     Countries                                        24    Countries                                            19   Countries




                                                                                                                                                                Bosnia and
                                                                                                                                                               Herzegovina • 1
                                                                                                                                                                   Albania • 2



                                                                                                                                                 Tunisia • 4
                                                                                                                                                 Algeria • 1
                                                                                                                                               Morocco • 3


                                                                                           Haiti • 1
                                                                                     Dominican
                                                                                      Republic • 1
                                                                                                                                     Mauritania • 3
                                                                                                                                        Senegal • 4
                                                                                                         Dominica • 1
                                                                                                       Saint Lucia • 1
                                                                                                      Saint Vincent
                                                Mexico • 3                                      and the Grenadines • 1             Gambia, The • 2
                                             Guatemala • 2                                                 Guyana • 1                    Guinea • 4
                                                 Belize • 1
                                                                                                                                   Sierra Leone • 1
                                            El Salvador • 3
                                                                                                                                           Mali • 3
                                              Honduras • 3
                                                                                                                                   Burkina Faso • 2
                                             Nicaragua • 2
                                                                                                                                   Côte d’Ivoire • 3
                                             Costa Rica • 1
                                                                                                                                         Ghana • 4
                                               Panama • 3
                                                                                                                                           Togo • 3
                                              Venezuela • 2
                                                                                                                                          Benin • 2
                                              Colombia • 1
                                                                                                                                          Niger • 2
                                               Ecuador • 3
                                                                                                                                         Nigeria • 2
                                                                                                                                           Chad • 2
                                                                                                                                      Cameroon • 1
                                                                   Peru • 1
                                                                                                                                     Sao Tome
                                                                 Brazil • 2                                                        and Principe • 1
                                                                Bolivia • 3                                                    Equatorial Guinea • 1
                                                              Paraguay • 2                                                               Gabon • 1
                                                                                                                                 Central African
                                                                                                                                                                    Angola • 2
                                                                                                                                       Republic • 1
                                                                                                                                                                   Namibia • 1
                                                                                                                                                                   Lesotho • 1

                                                              Argentina • 1
                                                               Uruguay • 1
                                                                  Chile • 1




     a/ Excludes projects which closed during 1999.
     N.B. The designations employed and the presentation of the material in this map, in the maps
          of IFAD’s Regions and in the country maps do not imply the expression of any opinion
          whatsoever on the part of IFAD concerning the delimitation of the frontiers or boundaries,
          or the authorities thereof.




52
          Africa II: Eastern and Southern Africa                     Near East and North Africa      Asia and the Pacific

           43    Projects                                            37      Projects                51     Projects
           17    Countries                                           17      Countries               16     Countries




                                    Turkey • 2
                                                                                                     Mongolia • 1
                                   Georgia • 1
 The Former Yugoslav                                                                               Kyrgyzstan • 2
                                  Armenia • 2
Republic of Macedonia • 1
                                 Azerbaijan • 1
             Romania • 1
                                      Syria • 4
                                                                                                  D.P.R. Korea • 2
                                  Lebanon • 3
                                                                                                        China • 6
                                    Jordan • 3
                                                                                                     Pakistan • 6
                                                                                                        Nepal • 3
                                                                                                  Bangladesh • 6
                                                                                                         India • 5
                                                                                                     Viet Nam • 4
                                                                                                         Laos • 3
                                                                                                   Philippines • 3
                                                                                                    Cambodia • 1

                                                  Egypt • 3
                                                  Yemen • 3
                                                  Sudan • 2


                                                                     Sri Lanka • 4


                                              Eritrea • 1
                                                              Maldives • 1                                Papua New Guinea • 1
                                           Ethiopia • 4
                                             Uganda • 2
                                              Kenya • 3
                                           Rwanda • 5
                                             Burundi • 3                         Indonesia • 3
                                   Tanzania, United
                                       Republic of • 3
                                          Comoros • 2




                            Madagascar • 3

                    Malawi • 3
               Mozambique • 3
                    Zambia • 3
                 Zimbabwe • 3
                 Swaziland • 1




                                                                                                                                 53
     IFAD’S REGIONS

     AFRICA I:
     WESTERN AND CENTRAL AFRICA
                                                              Overview: Towards Greater Democracy and Pluralism
                                                              On the whole, economic development in western and central Africa
                                                              was relatively positive, with a long-term average annual growth rate of
                                                              nearly %. This was comparable to the achievements of all sub-Saharan
                                                              African countries, and only slightly below all low-income countries.
                                                              Yet economic growth generally did not keep pace with population
                                                              growth (countries in western and central Africa had the highest popu-
                                                              lation growth rates in Africa). Moreover, within the region, dramatic
                                                              differences occurred between subregions.
                                                              The western African countries and countries in the communauté finan-
     24    COUNTRIES                                          cière africaine ₍₎ zone experienced relatively higher growth rates,
     Benin                                                    often based on agricultural expansion for domestic consumption and
     Burkina Faso                                             exports and on mineral exploitation, mining and processing. However,
     Cameroon                                                 in ,  growth in western Africa increased by only .%, com-
     Cape Verde                                               pared to .% in  and a high .% in . Poorer economic per-
     Central African Republic
                                                              formance resulted from the difficulties faced by commodity-exporting
     Chad
                                                              countries in general, but this was especially true for oil exporters such
     Congo
     Côte d’Ivoire                                            as Nigeria. The growth performance of the Sahelian countries, as a
     D.R. Congo                                               group, was somewhat lower; this was influenced by the slow progress
     Equatorial Guinea                                        in Chad and Niger.
     Gabon
     Gambia, The
                                                              Meanwhile, the central African countries that suffered from declining
     Ghana                                                    growth trends in -, due to political instability and economic man-
     Guinea                                                   agement problems, appeared to be moving towards greater stability.
     Guinea-Bissau                                             growth in  was .%, as compared with a negative rate of
     Liberia                                                  growth of -.% in the period -.
     Mali
     Mauritania                                               Many countries in western and central Africa continued to make steady
     Niger                                                    progress in implementing economic and sectoral reform programmes.
     Nigeria                                                  These programmes have often resulted in improvements in the insti-
     Sao Tome and Principe
                                                              tutional and policy environment in which  rural development pro-
     Senegal
     Sierra Leone
                                                              jects function. For example, extension and research institutions under-
     Togo                                                     went restructuring, and output and input prices and marketing
                                                              arrangements were liberalized.
                                                              Progress was not uniform, however, and the achievements of economic
                                                              reform programmes are still fragile. Almost one half of the region’s popu-
                                                              lation continued to suffer from food insecurity and rural poverty, a situ-
                                                              ation that is the result of a complex interplay of population growth,
                                                                                                                                           Horst Wagner




                                      Fifty per cent of the
                                    population in western
                                    and central Africa are
                                  beset by food insecurity
                                         and rural poverty.
                                     Despite the relatively
                                        positive economic
                                      development of the
                                        region, population
                                   growth, in combination
                                     with natural resource
                                   degradation and social
                                 and political factors, has
                                 prevented the rural poor
                                from reaping the benefits
                                       of regional growth.


54
natural resource degradation, and institutional and social factors. Political instability also took its toll,
creating additional human suffering and delaying development efforts. Currently, approximately %
of the region’s population is adversely affected by civil strife. Throughout the region, however, move-
ments toward greater democracy and pluralism occurred, and these movements are progressively
becoming rooted in national political culture. In many countries, this created an atmosphere con-
ducive to the greater participation of civil society in projects and programmes; it also fostered a greater
willingness to discuss and seek solutions to poverty. Most dramatically, Nigeria returned to the demo-
cratic fold and, in ,  approved its first project for that country in seven years.
Political instability, however, in combination with the serious arrears problems of a number of
countries in the region, made it difficult for  to design and implement projects. The two
largest countries, which together account for more than one half of the region’s population
(D.R. Congo and Nigeria ), received their last loans in the early s. In , only three pro-
jects were submitted to the Executive Board for approval, and two projects in an advanced stage
of design had to be abandoned because of sudden outbreaks of violence (The Congo and Sierra
Leone). However, in both  and , the Fund successfully developed a full lending portfolio
of seven projects. The first  loan since  was approved to Nigeria, and if conditions con-
tinue to improve there, in coming years the Fund hopes to re-establish a new loan portfolio cor-
responding to the size and importance of that country. In addition, arrears rescheduling packages
were adhered to in several countries. This permitted the reactivation of a lending programme in
Cameroon, which had a loan approved in .
Strategy and Approach: From Food Security to Rural Decentralization
In line with its overall development objectives, and the regional poverty assessment conducted in
,  continues to maximize the positive impact of investments in the following areas:
• improvement of food security;
• development of sustainable institutions for rural-finance intermediation;
• conservation of the environment; and
• support to decentralization.
Several cross-cutting themes characterize  approaches in the region. Key themes are:
• reaching rural women with interventions tailored to their needs;
• using participatory techniques in project design;
• promoting group development;
• building on indigenous knowledge systems and traditional organizational structures; and
• focusing on institutional sustainability through the strengthening of grass-roots organizations.
Much of the work in these areas is promoted in partnership with other s such as the World Bank,
other United Nations agencies including the United Nations Children’s Fund,  and , and a
number of bilateral donors.
The designing of strategies to increase food security is central to many  interventions in the
region, and these strategies are taking several forms. In , the Nigeria Roots and Tubers
Expansion Programme was approved. Following a similar project in Ghana, this project seeks to
strengthen links between research and extension in the promotion of improved technologies for
major root crops such as cassava and yams. A grant to the  was approved in  for a research
programme on yams; % of the entire world production of this crop comes from western Africa.
There are also plans to develop grants for cowpea improvement and rice-based cropping system
development. Finally, a key element of food security is income diversification, and this figures
prominently in the Burkina Faso Rural Microenterprise Support Projects and in Guinea for the
Programme for Participatory Rural Development in Haute Guinée.
Food insecurity is most pronounced in countries affected by conflict. In The Congo, D.R. Congo,
Guinea-Bissau, Liberia and Sierra Leone,  will join in coordinated efforts with  and the
United Nations High Commission for Refugees ₍₎ to provide a crucial link between relief
and development as these countries move to a post-conflict situation.

                                                                                                                55
          Korotoumou Troaré,
      president of a women’s
     agricultural cooperative,
     weeds a groundnut field
              in Côte d’Ivoire.
        Korotoumou believes
        that being part of the
     cooperative has enabled
           her to increase the
           productivity of her
        groundnut fields, and
         thereby increase her
             family’s income.




                                                                                                                                          Christine Nesbitt
                                   is continuing to support innovative initiatives to make financial services more accessible
                                  to the rural poor and women. In Benin and Guinea,  continues to pioneer financial ser-
                                  vices associations ₍s₎, highly participatory shareholder-based institutions that provide small
                                  loans and savings facilities. The Fund is now taking a more system-wide approach to rural
                                  financial services delivery. The Cameroon National Microfinance Programme Support Project,
                                  approved in , assists in the development of a national system providing rural finance ser-
                                  vices. The programme integrates national-level support for policy and planning with direct
                                  support to field-level microfinance service providers. A similar programme is under develop-
                                  ment in Ghana.
                                  Rural decentralization is now a prominent area of intervention for . Both the Cape Verde
                                  Rural Poverty Alleviation Programme and the Senegal National Rural Infrastructure Project
                                  emphasize support for capacity-building at the district level within the context of rural decen-
                                  tralization policies. These interventions join two others that were approved in earlier years in
                                  Ghana and Guinea. In all of these activities, and often in partnership with the World Bank
                                  and selected other donors,  has been promoting more effective, decentralized decision-
                                  making. To accomplish these goals,  has designed strategies ensuring that the voices of the
                                  poor are heard at the local level. In further support,  has provided funds for priority infra-
                                  structure investments.
                                  Natural resource management remains an important strategic concern of  interventions in
                                  western and central Africa. Projects in a number of the Sahelian countries promote agroforestry
                                  technologies, the most successful of which are often variations on traditional soil and water-
                                  conservation techniques. Ongoing projects across the Sahel are promoting indigenous tree and
                                  shrub species and supporting other methods for improving soil and water conservation.
                                  Special Initiatives
                                  In ,  continued to develop projects for financing under the flexible lending mechanism
                                  ₍₎. The Sahelian Areas Development Fund Programme in Mali, approved in December
                                  1998, became effective in October . Two new s were approved for Cape Verde and
                                  Guinea. Key elements of the  include:
                                  • longer loan periods;
                                  • clear articulation of long-term development objectives;
                                  • an iterative, phased design process over the extended period of the loan to allow for greater
                                    flexibility in resource allocation and planning;
                                  • a detailed design process for the initial cycle of project activities, with a set of clearly defined
                                    preconditions, or “triggers”, for proceeding to subsequent cycles; and


56
                             • an enhanced role for monitoring and evaluation to ensure that the projects remain on track
                               in the pursuit of their immediate and long-term objectives.
                             In early , in a move designed to focus the grant programme more closely on regional tech-
                             nology development and transfer priorities,  finalized a regional strategy for agricultural
                             research. This strategy emphasizes increased funding to neglected or “orphan” crops – crops
                             important to poor farmers but that have traditionally received only minimal attention from
                             donors,  centres and national programmes. In western and central Africa, such crops
                             include yams, millet/sorghum, cowpeas, rainfed rice, and vegetables. With the new strategy in
                             place, better links will be established between loan and grant programmes.
                             In ,  continued to pursue two approaches to the linked problems of debt and arrears.
                             Under the Heavily-Indebted Poor Countries Debt Initiative ₍ ₎, a country programme was
                             approved for Mali. With the endorsement of an enhanced   by all major bilateral organiza-
                             tions in June  in Cologne, deeper and more rapid debt relief will be possible for other coun-
                             tries of the region over the next several years. For countries suffering from arrears problems, the
                             Fund continued to maintain a rigorous position vis-à-vis borrowers in accordance with 
                             policy. As a result of proactive negotiation of arrears rescheduling packages, the Fund was able to
                             reactivate the country lending programme in Cameroon, where a second post-arrears project was
                             approved. For those countries remaining under suspension,  will continue to develop and
                             implement non-lending activities in order to pursue poverty-reduction objectives.
                             Project implementation workshops are a key activity in maintaining strong field-level operation.
                             In , two such workshops were held in Guinea and Mauritania for project and ministry staff.
                             In addition,  continued to interact with the multi-donor Agricultural Management Training
                             Programme for Africa.
                             Summary of IFAD Financing in the Region
                             Seven projects in western and central Africa were approved in  for Burkina Faso, Cameroon,
                             Cape Verde, Ghana, Guinea, Nigeria and Senegal for a total of  85.7 million.
                             Thus  is now financing a total of  ongoing projects in  borrower countries for a total
                             value of  . million financed by  and a total of  . million dollars financed by
                             other external sources, borrower governments and beneficiaries themselves. Principal cofinanc-
                             ing partners in the region include f, France,  and the World Bank group. The coop-
                             erating institutions for the Fund in the region are comprised of the f, , , 
                             and the World Bank.




Increasing the output of
                                                                                                                                   Roberto Faidutti



 millet, a crop especially
  suitable to the hot, dry
   regions of Mali, Niger
  and Nigeria, is a major
      objective of IFAD’s
     regional strategy for
    agricultural research.




                                                                                                                                                      57
     AFRICA II:                                               Overview: Transition from Emergency to Long-Term Development
     EASTERN AND SOUTHERN AFRICA
                                                              In , the rural and agricultural situation in eastern and southern
                                                              Africa was relatively stable. The continuation of the peace process and
                                                              the resumption of normal economic and social life in much of the
                                                              Great Lakes area considerably reduced the profile of emergency assist-
                                                              ance, with increasing emphasis on the transition to long-term devel-
                                                              opment. Nonetheless, instability in the D.R. Congo continued to have
                                                              some spillover effects in neighbouring countries. Overall climatic con-
                                                              ditions were normal, though some countries continued to experience
                                                              the after-effects of the El Niño phenomenon. Operational planning
                                                              for the region focuses on economic and social fundamentals, while
                                                              close attention continued to be paid to the evolution of the situation
     21    COUNTRIES                                          in the Horn of Africa.

     Angola
                                                              Decentralization continued to be a feature of public-administration
     Botswana                                                 restructuring in the region. The emphasis was on streamlining minis-
     Burundi                                                  tries at the central level, while simultaneously building local capacity.
     Comoros                                                  In Uganda, for example, the strengthening of the provision of local
     Eritrea                                                  administrative services was extended to community and parish levels.
     Ethiopia                                                 Decentralization has the potential to ensure that the rural poor have a
     Kenya
                                                              voice in the decisions affecting the development of their communities
     Lesotho
     Madagascar
                                                              and the provision of services. A parallel development was the growing
     Malawi                                                   commitment by governments to forge new types of partnership and
     Mauritius                                                coalition arrangements with the private sector and civil society. With
     Mozambique                                               stronger local participation in overall priority-setting for the develop-
     Namibia                                                  ment needs of communities, the focus was placed on accountability
     Rwanda
                                                              and transparency in the allocation and use of resources.
     Seychelles
     South Africa                                             Poverty in eastern and southern Africa touches about half the popula-
     Swaziland                                                tion, which is overwhelmingly rural. Thus rural poverty accounts for
     Tanzania, United Republic of                             about % of total poverty in the region. The majority of the population
     Uganda
                                                              will continue to be rural well into this century, and the principal produc-
     Zambia
     Zimbabwe
                                                              tive activity for these people will continue to be agriculture.
                                                              Strategy and Approach: Targeting Smallholders
                                                              for Better Market Integration
                                                              A relatively low level of investment in the agricultural sector by other donors
                                                              has created a situation in which governments are increasingly turning to
                                                               as a sector leader, within a process of new coalition and partnership-
                                                              building. While paying special attention to agriculture,  is designing
                                                              interventions to support the overall livelihood strategies of the rural poor
                                                              and, more specifically, to promote the productive response of smallholders.
                                                              The interventions for smallholders, for example, take into account their
                                                              total resource endowment, their vulnerability context, and the policy and
                                                              institutional framework in which they are operating.
                                     A farmer grows snow
                                                                                                                                                Giacomo Pirozzi




                                     peas with the help of
                                 irrigation in Kenya. IFAD
                               is helping smallholders to
                                       become involved in
                                   commercial agriculture
                                 as a means of achieving
                                     greater food security,
                                      income and savings.




58
                                                                                                                    A women’s theatre
                                                                                                                    group uses songs to
                                                                                                                    communicate messages
                                                                                                                    to the Inguri community
                                                                                                                    in Mozambique.
                                                                                                                    IFAD is piloting new
                                                                                                                    approaches like this to
                                                                                                                    beneficiary participation
                                                                                                                    in project design and
                                                                                                                    implementation. Such
                                                                                                                    participation ensures that
                                                                                                                    the rural poor have a
                                                                                                                    voice in the changes
                                                                                                                    affecting their lives.
Robert Maass




                target groups are poor because they lack assets: their farms are small, they have no draught
               animals and no small livestock. Consequently, ’s poverty-alleviation strategy in the region
               focuses on enabling the poor to create assets, including the acquisition of knowledge and organ-
               izational skills. ’s approach centres on helping smallholders establish a viable position in
               commercial agriculture, using agriculture not only as a basis for food security but also as the
               foundation for expansion of income and savings. Because of the limitation of smallholder
               development based exclusively on staple food production,  also has been helping small-
               holders participate in markets and produce higher-value cash crops, both for domestic sale and
               for export.
                is helping the rural poor in eastern and southern Africa achieve the means to build their
               asset base. This involves policy dialogue to promote a framework for better access to assets,
               and investment to enable smallholders to actively exploit the opportunities created by a more
               supportive policy framework.  works at the local level to empower poor farmers and farmer
               groups to improve the management and use of their own resources and to develop effective,
               sustainable linkages to markets. To achieve this goal, new programmes include support for
               public-sector decentralization and support to farmers, both as individuals and in groups, in
               handling relations with non-public agencies.
               An important ongoing process throughout the region is the changing identity of the key play-
               ers in rural development, particularly in smallholder development. As a result of policy changes
               and financial necessity, the public sector’s role in providing inputs and services to small farmers
               has declined drastically. Inputs, credit and extension are increasingly viewed as goods and
               services to be procured by smallholders from the market or to be organized directly by the
               smallholders themselves. These changes have led  to direct its efforts to helping farmers
               serve their own needs and improve their market access. ’s focus here has been twofold:
               • improving the business framework by bringing together smallholder producers and the
                 formal private sector, while increasing the bargaining power of the former; and
               • reducing transaction costs to farmers for the purchase of needed inputs and the sale of outputs.
               The first -financed interventions to improve market linkages for smallholders – outside of
               commodity-specific interventions such as smallholder cotton and oil-seed production in
               Uganda – were approved in  for Mozambique, Uganda and Zambia. In Swaziland, small-
               holder agricultural intensification and market relations will be the focus of future programme
               development. In Kenya, a gradual process of programme development is being put in place to
               follow the evolution of national policy on privatization and cooperative reform.
               While better market integration is a key factor in helping smallholders earn income and pur-
               chase assets, natural resource management and conservation are also crucial to the maintainance

                                                                                                                                                 59
         A smallholder prunes
      coffee plants in Uganda.
     IFAD supports legislative
         measures to promote
     forms of land tenure that
      encourage smallholders’
              investments and
                 production of
               perennial crops.




                                                                                                                                        Radhika Chalasani
                                  of production systems. In this context, access to and management of land are being taken up
                                  as a central theme of new projects and programmes under development in the region. These
                                  focus on community management issues and on sustainable development in areas that may
                                  not immediately benefit from initiatives to strengthen commercial systems. Future pipeline
                                  development includes programmes for:
                                  • Eritrea and Rwanda, focusing on rangeland management;
                                  • Ethiopia and Lesotho, focusing on land husbandry and crop production in marginal areas; and
                                  • Malawi, addressing soil-fertility management and improvement.
                                  Programme development in these countries builds upon technical and organizational experi-
                                  ence gained in pilot components of past  projects.
                                   is also developing mechanisms to ensure that smallholders have access to quality land.
                                  Using supplementary funds provided by Norway, , in association with other donors, has
                                  developed a pilot initiative in Zimbabwe for exploring options for community-based land
                                  reform. This initiative is a further step in the Fund’s strategy to promote forms of land tenure
                                  suitable to smallholder investment and production. In the United Republic of Tanzania and
                                  Uganda, for example,  has influenced land legislation in the direction of titling small-
                                  holders and supporting independent access by women to land.
                                  Rural finance and access to technology are two areas of particular importance as  seeks to
                                  help smallholders raise production levels. At this time, little access exists to financing in rural
                                  areas in the wake of the liquidation of parastatal banks. Building upon experience gained in
                                  the development of local, rural financial institutions in some of its projects,  will be sup-
                                  porting governments in their efforts to promote rural financial-system development. Although
                                  it recognizes that this type of intervention requires substantial foundation-building in institu-
                                  tions and in policy,  has begun to prepare a national, rural finance programme in the
                                  United Republic of Tanzania. The experience gained from this project will later be used in the
                                  design of similar interventions in Zambia as financial-sector reforms proceed. The downsizing
                                  and restructuring of publicly supported agricultural services has reduced smallholder access to
                                  technology and advice. Together with other donors in Uganda,  is preparing a national
                                  extension programme that combines measures to support public-sector decentralization with
                                  expanded smallholder linkages to private-sector technology suppliers.




60
                                                                                                                         Freshly-picked coffee
                                                                                                                         cherries of Coffea
                                                                                                                         canephora, a coffee
                                                                                                                         cultivar from West
                                                                                                                         Africa, which has a
                                                                                                                         stronger and more bitter
                                                                                                                         taste than Coffea
                                                                                                                         arabica. IFAD’s projects
                                                                                                                         are helping smallholders
                                                                                                                         exploit niche markets for
                                                                                                                         such cash crops.
Radhika Chalasani




                    Partnerships and Special Initiatives
                    In order to be sustainable and successfully replicated, ’s approach to smallholder economic
                    and social empowerment requires the support of other international bilateral and multilateral
                    financiers.  has been working with other donors, both at the country level and at headquarters,
                    to establish a common understanding of issues critical to the smallholder farm sector. Strategic
                    partnerships have been pursued within the context of common perceptions, and these partner-
                    ships include the development of programmes in association with other donors and the continua-
                    tion of dialogue on development objectives and methods with multilateral/bilateral organizations.
                    Several strategic partnerships have already proven quite successful. In 1999,  mobilized
                    cofinancing for three projects in the United Republic of Tanzania, Uganda and Zambia from
                    supplementary funds provided by Ireland. Cofinancing was mobilized from the German
                    Development Service for the forestry project in Zambia.  and the f initiated a process
                    of joint programme development, with f providing financing for rural infrastructure under
                    projects in the same geographical areas as  interventions. Collaboration in project funding
                    continued with the  Fund, with cofinancing of the programme in Burundi.
                    Consultations with the World Bank have resulted in:
                    • finalization of a medium-term operational framework for collaboration;
                    • joint work on a new, multi-donor, rural technology programme for Uganda; and
                    • support for an innovative joint strategy for rural development in Mozambique.
                    This year has seen increased operational collaboration among ,  and . During the
                    year,  cofinanced projects in Burundi and the United Republic of Tanzania.  provided
                    technical services for the implementation of two -financed grants: one for the financing of
                    field testing in Africa of the farmer-field-school approach for integrated pest management and
                    one for pilot testing of integrating aquaculture with agriculture under -supported irriga-
                    tion components.  also provided extensive technical collaboration for the preparation of
                    the Regions Rural Poverty Assessment. The latter received extensive discussion internally, and
                    was presented to  and the Department for International Development ₍₎ of the United
                    Kingdom at two informal workshops.
                    As part of the -wide initiative on knowledge management, two special studies were under-
                    taken. The first was a review of gender issues in ongoing projects. It concluded that project
                    management units need to strengthen their approach to these issues. The second, a practical
                    review of the design approach and the implementation of water-management activities in ongo-
                    ing projects, is nearing completion. Some interesting lessons about traditional irrigation
                    systems are emerging. A third study has been initiated, a review of credit activities in ongoing
                     projects in the region. This study is expected to provide useful insights that will con-
                    tribute to the design of future projects supporting rural financial-system development.

                                                                                                                                                     61
     Supplementary grant funds provided by Norway enabled  to develop two special activities
     to complement ’s operational programme in the region. The first is a three-year gender
     strengthening programme. This programme, targeted at project management units, builds on
     knowledge management as it relates to gender issues and on the Fund’s experience in Latin
     America. The second is a pilot project that will test community-based resettlement approaches.
     This project will contribute to the ongoing dialogue with the Government of Zimbabwe on
     land reform and resettlement.
     Two technical assistance grants were approved to support ’s regional programme. The rel-
     atively high investment required for irrigation development means that the returns earned
     should be maximized. Integrating fish farming into smallholder irrigated agriculture represents
     one way of doing so. This integration of aquaculture with agriculture is new to southern
     Africa, and the first grant will adapt and extend research results to the needs of poor small-
     holder farmers under three -financed projects in Malawi, Zambia and Zimbabwe.
     The need for coordinating donor support on the basis of agreed programmes has led to the
     establishment of the  Multi-Donor Food Security and Rural Development Hub. The
     Fund’s grant to  for rural development planning and implementation capacity consti-
     tutes a new form of operational collaboration for , with the World Bank, , , the
     European Community and regional institutions.
     Under the ongoing   initiatives, debt relief by  was triggered for Uganda; a similar
     plan is soon expected to take effect for Mozambique.  is preparing the ground for the new,
     wider phase of   in the region.
     Summary of IFAD Financing in the Region
     Seven projects in eastern and southern Africa were approved in  for Burundi, Mauritius,
     Mozambique, the United Republic of Tanzania, Uganda and Zambia (two projects) for a total
     of  . million.
     Thus  is now financing a total of  ongoing projects in  borrower countries for a total
     value of  . million financed by  and a total of  . million dollars financed
     by other external sources, borrower governments and beneficiaries themselves. Principal
     cofinancing partners in the region include f, Belgium, , United States Agency for
     International Development ₍₎ and the World Bank Group. The cooperating institutions
     for the Fund in the region are comprised of f,  and the World Bank.




62
ASIA AND THE PACIFIC                                 Overview: From Recovery to Redefining the Challenges
                                                     Globalization and economic liberalization, which fuelled rapid eco-
                                                     nomic growth in the Asia and the Pacific region, also increased the
                                                     vulnerability of these economies to external shocks. As the recent finan-
                                                     cial crisis demonstrated, such shocks can lead to severe economic
                                                     downturn and rapid reversal of gains in poverty alleviation.
                                                     Nevertheless, the macroeconomic performance of the crisis-hit coun-
                                                     tries in Asia improved in , and annual  growth is expected to
                                                     be positive in almost all countries of the region. The overall  growth
                                                     rate in Asia is projected to be .% in , compared to .% in .
                                                     The economy of - (Indonesia, Malaysia, The Philippines and
                                                     Thailand), which contracted by about % in , is expected to grow
30   COUNTRIES                                       by .% in . The region experienced partial recovery of capital
                                                     inflows in , which eased financing constraints. Declining inflation
Afghanistan
Bangladesh
                                                     and a rise in confidence allowed further monetary easing. Exports gen-
Bhutan                                               erally increased in Asian countries; this was mainly due to competitive
Cambodia                                             exchange rates, the bottoming-out of some commodity prices and
China                                                improved growth in regional trade. Growth in agriculture, supported
Cook Islands                                         by improved weather, has also contributed to growth in India,
D.P.R. Korea
                                                     Indonesia and The Philippines.
Fiji
India                                                Despite these positive trends, however, the poverty situation remains
Indonesia                                            grim. For example, in Indonesia, poverty continues to rise despite a
Iran
                                                     resumption of growth. The total number of people living below the
Kazakhstan
                                                     poverty line rose from . million in February  to . million
Kyrgyzstan
Laos                                                 (roughly % of the population) at the end of . During this period,
Malaysia                                             the number of rural poor in Indonesia rose by %. In India, recent
Maldives                                             studies have shown that the high economic growth achieved in recent
Mongolia                                             decades has had no perceptible impact on rural poverty levels. These
Myanmar
                                                     examples illustrate some of the developments that have taken place in
Nepal
                                                     recent decades in Asia, and demonstrate that there were both costs and
Pakistan
Papua New Guinea                                     benefits associated with high rates of economic growth. The concern
Philippines                                          is that the rural poor incurred the costs but all too seldom reaped the
Republic of Korea                                    benefits.
Samoa
Solomon Islands                                      Recent surveys have shown that income inequality is rising in several
Sri Lanka                                            countries that achieved high economic growth rates and poverty reduc-
Tajikistan                                           tion in the last three decades. A significant rise in income inequality
Thailand                                             was observed in China and Thailand, and a marginal increase was
Tonga
                                                     noted in The Philippines and the Republic of Korea. The reason for
Viet Nam
                                                     this rising inequality was the growing disparity in economic growth
                                                     rates between areas within countries; in some areas, there was a high
                                                                                                                                 Anwar Hossain




                           A farmer and children
                          wait by the side of the
                         road to transport sacks
                            of rice to the nearest
                               market in Wangdi,
                       Bhutan. Many of the rural
                             poor live in isolated
                                  areas with poor
                            communications and
                             suffer from political
                              neglect and lack of
                       services. IFAD is helping
                        communities to improve
                            and maintain market
                                    access roads.



                                                                                                                                                 63
     concentration of economic activity, while others were stagnating. In China, for example, growth
     rates varied significantly across provinces and between rural and urban areas. In the last decade
     and a half, rural/urban and interprovincial income disparities have grown, which has led to
     interpersonal inequality. There are also signs that widening income inequality is contributing
     to the breakdown of social cohesion in these countries.
     Measures of economic growth and poverty assessments that are based on income analysis alone
     tend to miss some other important aspects of poverty. For example, South Asia is one of the
     regions with the lowest levels of social indicators. Despite improvements in infant mortality
     rates, life expectancy at birth, and adult literacy rates, South Asia still suffers from very low
     scores on measures of human development such as the human development index ₍₎, gender
     development index ₍₎ and gender empowerment index ₍₎. The relatively low  and
      may reflect the fact that educational levels and nutritional status, as well as the degree of
     empowerment of women in South Asia, are considerably lower than in other regions.
     The level of deprivation (social and nutritional as well as economic) is inadequately indicated
     by poverty statistics based on income figures. For example, a recent World Bank study based
     on the - round of the Indian National Sample Survey, revealed that about % of the
     rural population had caloric intakes below the   calories per adult recommended for rural
     areas. (Comparative figures for the urban population are % and   calories.) This is much
     higher than the percentage of people below the poverty line (approximately % in -).
     In -, % of India’s population consumed fewer than   calories per day and, of that
     %, % consumed less than   calories per day.
     The process of marginalization of the indigenous people and other groups of rural poor in the
     uplands of Asia has not received the attention it deserves. The areas inhabited by these people
     have been bypassed by the rapid economic growth experienced by many Asian countries. Living
     in isolated areas with poor communications, they also suffer from political neglect and negli-
     gible services. Whatever little assistance the upland populations have received has, until recently,
     been guided by the primary concerns of the lowlands and the mainstream societies. Indeed,
     conventional industrial and agrarian sectors rarely flourish in the hills and mountains, a fact
     that is due to strong comparative disadvantages, primarily in terms of production costs.
     Nevertheless, the uplands have valuable assets. Upland timber, fuel wood, non-timber forest
     products, hydropower, minerals, biodiversity, products for bioprospecting and opportunities
     for ecotourism are very attractive to outside investors. Unfortunately, past efforts to exploit
     these assets have tended to dispossess the local populations. Such development has followed
     the classic exploitation (extractive) mode rather than an empowering mode based on genuine
     involvement of the local population and generation of real benefits to them. If this is allowed
     to continue, the conflicts already experienced in many countries could spread throughout Asia.
     Economic transformations are changing the structure of agriculture in many Asian countries,
     with serious consequences for women in particular. In China, male migration from rural areas
     is resulting in the ‘feminization’ of agriculture. Such a phenomenon has a ripple effect on the
     populace. For example, when the work burden for the mother in a household increases, the
     eldest daughter’s education is affected; she is the one who must take care of younger siblings.
     Thus, with the next generation’s educational opportunities diminished or non-existent, the
     cycle of poverty continues. Increasing marginalization is also detrimental to the status of women
     in the society. There is some evidence that the relatively greater degree of gender equality that
     characterized many indigenous societies is being gradually eroded.




64
                                                                                                                    Farmers work on a tea
                                                                                                                    plantation in China.
                                                                                                                    The IFAD-funded project
                                                                                                                    in the south of Yunnan
                                                                                                                    province is helping
                                                                                                                    minorities by promoting
                                                                                                                    the cultivation of
                                                                                                                    permanent crops
                                                                                                                    that can be grown
                                                                                                                    on the sloping lands
                                                                                                                    where they live.
Lou Dematteis




                Strategy and Approaches: Enhancing the Livelihoods of the Upland Poor
                During ,  re-examined its development support strategy, priorities and practices in the
                Asia and the Pacific region. The extent of poverty and deprivation among indigenous people
                and other groups of rural poor in marginal upland areas led  to formulate a programme for
                enhancing the livelihoods of the very poor rural households in these areas. Their remoteness
                and diversity places a premium upon decentralized, participatory approaches and sensitivity to
                local conditions in programme development/execution in order to achieve sustainability.
                Particular emphasis is being placed on the building of local institutions.
                Based on an assessment of the impact of the Asian crisis and a review of past experience, greater
                attention is being paid to:
                • regenerative farming and forestry systems;
                • rural finance with emphasis on savings and institution-building geared towards the financ-
                  ing of on- and off-farm activity as well as the development of resilience;
                • rural infrastructure; and
                • local institutions and capacity-building.
                Utilizing lessons learned from past and ongoing projects, the strategy puts a renewed and
                increased emphasis on participation and effective implementation. Greater participation of
                beneficiaries and other stakeholders in the design and implementation of projects is achieved
                by promoting local champions, and by encouraging the active participation of all parties in
                pre-formulation workshops. Important beginnings have been made. For example, ‘reality check’
                workshops were held in Bangladesh and The Philippines in which those concerned with devel-
                opment (s, civil society and senior government officials from these countries) took an
                active part in discussions of the draft country strategic opportunities papers ₍s₎. Their
                input/advice helped identify target groups and potential areas of intervention for future 
                projects.
                In order to ensure that  staff gain more in-depth knowledge about project impact on the
                livelihood systems of the poor with whom they work, the Fund is investigating ways of pro-
                viding greater implementation support to ongoing projects. This year,  undertook a survey
                in three villages covered by the Maharashtra Rural Credit Project in India. Using local
                researchers, the survey sought to gain a deeper understanding of targeting and empowerment
                processes in the project area. The findings of this research have provided valuable feedback for
                future design and implementation of projects.  is also exploring the feasibility of giving
                technical assistance grants to regional research and development institutions such as the
                International Centre on Integrated Mountain Development ₍₎ and . These grants
                would be used to enable these centres to provide implementation support to  projects on

                                                                                                                                              65
         A smallholder harvests
        rice in Lobesa, Bhutan.
      In cooperation with local
             researchers, IFAD is
            carrying out surveys,
          including crop-cutting
          trials, that will provide
        valuable information for
           the future design and
               implementation of
       projects and help it gain
     a better understanding of
                   project impact.




                                                                                                                                          Anwar Hossain
                                      substantive issues such as gender mainstreaming, participatory monitoring and evaluation and
                                      impact assessment.
                                      Social empowerment and participation in governance are important objectives in new and
                                      planned projects. In India, the design of the new Bihar-Madhya Pradesh Tribal Development
                                      Programme is based on a recent ( December) amendment to the Constitution of India.
                                      This amendment transferred significant decision-making power to local communities over the
                                      use of the local resources, including non-timber forest produce, local water bodies and minor
                                      mineral resources. The amendment allows for a much more participatory approach to local
                                      development in the ‘scheduled’ areas, with, for example, the formation of gram sabhas (village
                                      assemblies) based on natural affinity (clans or geographical nearness, or those sharing common
                                      resources). The institutional framework used for grass-roots development is thus based on the
                                      gram sabhas, consisting of - households, with an average of some  households. Also, in
                                      seeking a means to restore tribal land to tribal households, an innovative project tool has been
                                      developed and will be tested through the new project in India. The tool, a legal defence fund,
                                      can be used to finance the legal costs incurred in defending the various rights of a tribal house-
                                      hold, including the right to own property.
                                      The newly approved Ha Tinh Rural Development Project in Viet Nam has a number of innov-
                                      ative features. First, it provides for a commune development fund and a development initi-
                                      atives fund; these funds will enable the project to implement a genuine demand-driven and
                                      client-oriented approach. Second, the project ensures, for the first time, the participation of
                                      s in project implementation and in the Project Provincial Steering Committee. It will
                                      establish an advisory panel composed of senior development practitioners (academics and
                                      researchers), who will provide an independent assessment on selected aspects of project imple-
                                      mentation such as targeting, training and procurement. These elements will serve as a control
                                      mechanism in project implementation.
                                       also seeks to influence the views of policy makers by implementing innovative projects at
                                      the grass-roots level and by building partnerships with like-minded donors, governments, s
                                      and other stakeholders. ’s outreach in Asia and the Pacific is being extended by developing
                                      strategic alliances with key opinion makers and organizations in the region; the goal of these
                                      alliances is to scale up and replicate successful projects. For example, in   organized
                                      regional workshops in Japan and Thailand to discuss the Fund’s new programme approach on
                                      upland development. Participants in these workshops included s, civil society, government
                                      officials, and like-minded donors.  will continue this dialogue as projects are developed
                                      and implemented, so that there is greater collaboration with different stakeholders during pro-
                                      ject design and implementation. In India, the Fund has joined with the British Government


66
                                                                                                                      In Nepal, women and
                                                                                                                      men work side by side
                                                                                                                      threshing wheat after a
                                                                                                                      harvest. Promoting
                                                                                                                      women’s active
                                                                                                                      participation is
                                                                                                                      fundamental in the
                                                                                                                      design and
                                                                                                                      implementation
                                                                                                                      of IFAD’s agricultural
                                                                                                                      projects in Asia.
Anwar Hossain




                to jointly finance a national microfinance project in collaboration with a national bank.
                Likewise,  is scaling up the -initiated Cambodia Area Rehabilitation and Regeneration
                Project ₍₎ in Cambodia and has collaborated with the Germany Agency for Technical
                Cooperation ₍₎ in Sri Lanka,  and the Canadian International Development Agency
                ₍₎ in The Philippines.
                Special Initiatives
                The feminization of agriculture and other gender-related issues have figured prominently in
                the Rural Poverty Assessment for the Asia and the Pacific region.  has collaborated closely
                with the Government of Japan in analysing these issues in several countries under the Special
                Contribution for Women-in-Development ₍₎. The aim of this collaboration is to deinstitu-
                tionalize the male bias and to enhance women’s decision-making role by redefining the rules
                and procedures of institutions. During , the following studies were initiated under the
                special contribution from Japan:
                • a gender assessment study and awareness-building in  projects (in China);
                • a gender assessment study, women’s training and gender awareness-building (in Laos); and
                • a programme for the strengthening of gender initiatives in ’s projects among indigenous
                   people (throughout Asia).
                In addition, a symposium on The Asian Crisis and the Rural Poor was organized in Tokyo, in
                July , under the same special contribution. The symposium was attended by more than
                 participants, including representatives of the Japanese Government, academics, s, and
                policy makers from several Asian countries. Special insights were provided during the sympo-
                sium by direct interaction through satellite link-up with Indonesian villagers, who described
                the impact of the financial crisis on their lives.
                In ,  made concerted efforts to create awareness and build consensus among all stake-
                holders on its special initiative for upland areas of Asia. In April , , the  Investment
                Centre and the World Conservation Union ₍₎ jointly organized a “reality-check” consulta-
                tion in Bangkok to assess the relevance of the proposed programme. The consultation brought
                together, in addition to  staff,  participants from nine Asian countries, regional and
                international organizations and bilateral agencies. The participants strongly endorsed the pro-
                gramme and passed a resolution in its support. The Tokyo symposium also strongly supported
                this  initiative. With this broad support,  finalized the programme proposal Enhanced
                Partnership for the Future of Asia’s Upland Poor. The programme’s overall goal is to ensure
                that indigenous and other marginalized upland people have improved and increasingly resilient
                livelihoods through secure and sufficient access to and control over their natural resources.



                                                                                                                                                67
      took the lead in a number of innovative initiatives in  designed to empower the poor
     and encourage participatory development and governance. The Fund organized a workshop in
     Hanoi, Viet Nam, in collaboration with the Centre on Integrated Rural Development for Asia
     and the Pacific ₍₎ and the Asian  Coalition for Agrarian Reform and Rural
     Development ₍₎. This workshop provided another opportunity to share various particip-
     atory processes in project development, implementation, monitoring and evaluation with s
     and to learn from them based on their experience.
     In China, the project-based collaboration existing between  and  since  has devel-
     oped into a joint programme approach. ’s country strategic opportunities paper ₍₎
     for China, which was finalized in February , was prepared in close collaboration with .
     Future project areas have been selected on the basis of the Vulnerability Analysis and Mapping
     ₍₎ carried out jointly by  and . The partnership has allowed  to participate
     actively with  in World Food Day, which was organized in Kunming, China, on the occa-
     sion of the International Horticultural Expo . The presence of the three Rome-based agen-
     cies in China has renewed the prospects for joint interventions. Strategic linkages have been
     established with  (Germany) and the Desjardins International Development Society
     (Canada) to strengthen the Fund’s efforts in support of using the rural credit cooperatives in
     China as microfinance institutions ₍s₎ for the rural poor. This collaboration has allowed
      to initiate policy dialogue with the People’s Bank of China on the restructuring of these
     cooperatives into poverty and gender-sensitive s.
     During ,  also established a knowledge network for the Asia and the Pacific region;
     its purpose is to electronically link -funded projects with their counterparts in other coun-
     tries to allow the sharing of ideas and experiences. This regional network will also allow more
     effective communication among , cooperating institutions and projects, and will facilitate
     closer monitoring of quality and a continuous flow of information to and from projects.
     Summary of IFAD Financing in the Region
     Six projects in Asia and the Pacific were approved in  for Bangladesh, Bhutan, Cambodia,
     China, India and Viet Nam for a total of  . million.
     Thus  is now financing a total of  ongoing projects in  borrower countries for a total
     value of  . million financed by  and a total of   . million dollars financed by
     other external sources, borrower governments and beneficiaries themselves. Principal cofinan-
     cing partners in the region include s, Japan, The Netherlands, the World Bank group, 
     and . The cooperating institutions for the Fund in the region are comprised of s, 
     and the World Bank.




68
LATIN AMERICA AND THE CARIBBEAN                        Overview: Rural Poor Most Affected by the Financial Crisis and
                                                       Climatic Disasters
                                                       In , the economic performance of Latin American and Caribbean
                                                       countries reached the lowest point of the whole decade. The continued
                                                       decline of capital inflows, the consequent tightening of domestic credit
                                                       conditions, the continuous and sharp deterioration in the terms of
                                                       trade, and the continued low level of prices of oil and non-oil export
                                                       products during the first six months caused a record low economic
                                                       performance. Additionally, the devastation brought by Hurricane
                                                       Mitch in the Central America subregion, along with the damage caused
                                                       by an earthquake and intensive rains and flooding in the south-west
                                                       region of Mexico, continued to negatively influence the region’s over-
32    COUNTRIES                                        all economic performance. In spite of modest gains in export prices in
                                                       the second half of , the regional  annual growth rate is fore-
Antigua and Barbuda
                                                       cast to be negative, -. to -.%. Per capita , which grew only at
Argentina
Barbados
                                                       .% in , will contract to -.% in . Thus in the entire decade
Belize                                                 of the s, the Latin America and the Caribbean region will have
Bolivia                                                achieved only a % growth in per capita .
Brazil
                                                       In early , Brazil’s currency crisis further raised external financing
Chile
Colombia                                               costs and deterred capital inflows, pushing the whole region into reces-
Costa Rica                                             sion. Most of the contagion from Brazil’s crisis spread to 
Cuba                                                   member countries, particularly Argentina, through direct trade. Effects
Dominica                                               on Chile were reflected in the emerging conflict between the lower
Dominican Republic
                                                       interest rates needed to stimulate demand and the need for a stable
Ecuador
                                                       currency. However, the health of the Chilean financial system remained
El Salvador
Grenada                                                strong, despite a moderate deterioration resulting from interest rate
Guatemala                                              levels and the economic slowdown. Added volatility pushed Ecuador
Guyana                                                 into a serious banking crisis, with severe restrictions applied to bank-
Haiti                                                  deposit withdrawals. As a consequence, the  negative  in
Honduras
                                                       Ecuador reached -%, the second worst performance in the region.
Jamaica
                                                       Despite some recovery in world oil prices in the second semester of
Mexico
Nicaragua                                              , Venezuela also experienced a decline in  and a record nega-
Panama                                                 tive  growth of -%, the lowest performance in the region. This
Paraguay                                               decline was due to a combination of political and financial instability.
Peru
Saint Christopher and Nevis                            The “post-Mitch effect” affected Honduras’ economic performance,
Saint Lucia                                            with an expected  negative growth of -.%. Mexico and Peru man-
Saint Vincent and the Grenadines                       aged to maintain positive, if slower, rates of  growth, reaching .%
Suriname                                               and .%, respectively. The Brazilian crisis also led to another bout of
Trinidad and Tobago
                                                       turbulence in Mexico’s financial markets during January .
Uruguay
                                                       Fortunately, however, this turbulence was short-lived, reflecting the
Venezuela



                              A dairy farmer makes
                                                                                                                                   Giuseppe Bizzarri




                           cheese to be sold in the
                          local market in San José,
                                   Uruguay. IFAD is
                           encouraging small-scale
                          entrepreneurs to improve
                                their efficiency and
                            productivity in order to
                                  compete in newly
                                expanding markets.




                                                                                                                                                       69
     A woman from a farming
          family spins rope in
          El Tambo, Ecuador.
         Providing indigenous
       women with access to
           training and credit
     enables them to develop
             off-farm income-
       generating enterprises.




                                                                                                                                      Giuseppe Bizzarri
                                 limited extent of the economic links between the two countries, and the prompt tightening of
                                 Mexico’s monetary policy. Central American and Caribbean countries (with the exception of
                                 Honduras) were the least affected by the regional crisis. This was mainly due to lower oil prices,
                                 which provided a stimulus for a favourable economic performance. Costa Rica and the
                                 Dominican Republic and were the two economies with stronger dynamism, with projected
                                  growth rates of . and .%, respectively. Countries of the Caribbean subregion, in which
                                 tourism and construction are the main engines of growth, experienced modest but positive
                                 rates of economic growth. However, continued restrictions on the banana trade, the most
                                 important agricultural commodity, reduced total agricultural-sector performance.
                                 Overall, the regional financial crisis, in combination with the climatic disasters of last year and
                                 this year, had significant negative impact on the living conditions of the region’s rural poor.
                                 Recent data from the central American region and Brazil and Mexico suggest a -% increase
                                 in rural poverty levels, bringing the total number of the rural population currently living in
                                 poverty to over  million. Clearly, the task of poverty alleviation in the region has increased.
                                 A consequence of poor economic performance was the loss of employment in urban and rural
                                 areas, reflected in an unemployment rate that climbed from . to .% between  and
                                 . Additional consequences include sharp rises in the prices of food and agricultural inputs,
                                 and a marked decline in the delivery of government-supported financial and technical services
                                 to marginal rural areas. All of these events critically affected the region’s economic growth and
                                 limited its short and medium-term development outlook. They also provided clear evidence
                                 of the underlying weakness and instability of Latin American and Caribbean economies.
                                 During , the region’s economies are expected to experience a slow recovery, with very
                                 moderate levels of growth. Despite adequate average incomes in many countries of the region,
                                 poverty and inequality remain serious problems and are expected to continue to worsen in
                                 some areas. Inequalities in access to education, health services and productive assets constitute
                                 an important structural constraint to development.
                                 Government efforts to achieve stabilization and to deepen structural reforms will not, alone,
                                 be sufficient to reduce the magnitude of poverty and produce sustainable development. The
                                 poor, and the rural poor in particular, must be actively involved in the economic development
                                 process, both as consumers and producers, through active participation in these processes.
                                 Regional and global markets provide an important set of challenges and opportunities that
                                 have to be used effectively by governments in their rural development and poverty-alleviation
                                 programmes. National governments and  face a particular challenge as they work together
                                 to design and implement effective poverty-reduction interventions.



70
Strategy and Approach: Policy Dialogue on Poverty Alleviation
During , ’s strategies in Latin America and the Caribbean were framed by the coun-
tries’ responses/adjustments in their national economies and social programmes to the various
economic crises and natural disasters that occurred in  and . The increased levels of
rural poverty in most countries as a result of these crises have renewed the interest and com-
mitment of governments to poverty-alleviation policies and programmes in a context of chal-
lenges and opportunities arising from the consolidation of regional and global markets. Thus
 was characterized by renewed and fruitful policy dialogue on poverty alleviation and rural
development strategies at the country level, as well as in ’s new project design and imple-
mentation arrangements. The  for Mexico was completed and approved, and initial drafts
for Chile, Haiti, and Venezuela were prepared for institutional approval.
At the operational level,  projects in Latin American and the Caribbean are giving priority to:
• Human capital. This priority is aimed directly at integrating marginal poor populations
  into the local social/economic mainstream, and ensuring that they have a means of main-
  taining a sustainable income. Investments in human-capital formation and/or improvement
  are particularly important for the rural poor of indigenous origins, rural women and other
  minorities; such assistance helps them as they seek to achieve full social and economic integ-
  ration into both their rural society and their country. Armed with new skills and greater
  confidence, this target population will be better able to incorporate cutting-edge technol-
  ogy into their productive processes and to access markets and financial services efficiently.
• Agricultural and non-agricultural market competitiveness. Global markets have created
  challenges and opportunities for the rural poor. To take advantage of the best opportunities
  provided by this scenario, agricultural development and poverty-alleviation programmes
  should create and strengthen links between the target population and the technology-
  generation system, technology delivery services, financial markets, private enterprises and
  local, national and international markets. The challenge is to enhance poor or small-scale
  farmers’ and entrepreneurs’ productivity and competitiveness so that they can efficiently
  and profitably reach available markets, and to reduce their transaction costs through eco-
  nomic organizations and partnerships with the private commercial/industrial sector. For
  the rural poor in semi-arid regions, technologies and investments in water supply, conserv-
  ation, and management at the farm level are of particular relevance. Under semi-arid con-
  ditions, limited water availability is often a key constraint.
• Sustainable agricultural production and natural resource utilization in semi-arid and other
  environmentally fragile areas. Ecological sustainability is a necessary condition for long-
  term agricultural and rural development. Yet the natural resource base continues to deteri-
  orate in parts of rural Latin America and the Caribbean. The rural poor are predominantly
  located in fragile lands, particularly in semi-arid regions, on sloping mountainous terrain
  and in the humid tropics; they are part of the problem and part of the solution for natural
  resource conservation and management.
• Gender. Inequalities arising from the patriarchal societies of the region have negatively
  affected the pattern of social and economic rural development. As one consequence, rural
  women – both heads of households and wives – are often excluded from the services and
  benefits of agricultural and rural development programmes. The full participation of rural
  women in the economic improvement of rural society is both a requirement for, and an
  indicator of, fair, democratic, and sustainable rural development.
• Empowerment of the rural poor at local and regional levels. Current trends to decentral-
  ize government services to community and/or municipal organizations require the active
  participation of the rural poor in the planning, selection and implementation of local devel-
  opment programmes. Efforts oriented towards empowerment of the rural poor will directly
  affect their ability to participate in local and central decision-making processes and negoti-
  ate with authorities. Such empowerment should lead to active partnerships among govern-
  ment, civil-society organizations and grass-roots organizations; ideally, the participants will
  become a leading force for good governance and accountability in local government.

                                                                                                      71
                                   Special Initiatives
                                   During ,  implemented a set of special initiatives designed to increase the impact of
                                   ongoing projects throughout the region. These initiatives are briefly described below.
                                   In Argentina, Brazil, Bolivia, Chile, Paraguay and Uruguay, an  grant is being used to iden-
                                   tify the challenges and opportunities for peasant farmers that have been created by regional
                                   market integration under the Common Market of the Southern Cone ₍₎. This innov-
                                   ative programme will identify ways of enabling vulnerable peasant farmers to participate in
                                   new market niches created by the expansion of . It will also identify ways to enable
                                   them to avoid marketing and income risks arising from the economic modernization process,
                                   elimination of trade barriers and expanded markets. Through monitoring, analysis and research
                                   on trade policies, training and capacity-building of peasant leaders and public officials, and
                                   design of public policies at the country and regional level, rural communities will be able to
                                   integrate and participate successfully in a competitive market environment.
                                   The monitoring and evaluation of project performance and impact has been a continuous
                                   priority for . As one example, the  grant-funded Programme for Strengthening the
                                   Regional Capacity for Monitoring and Evaluation of Rural Poverty-Alleviation Projects in Latin
                                   America and the Caribbean ₍₎, made possible the collection and sharing of lessons learned
                                   and knowledge of monitoring and evaluation across the entire region. The success of the first
                                   phase has led to the approval of a grant for a second phase of . This second phase will
                                   standardize the monitoring and evaluation systems and techniques currently being used by
                                   providing integrated “tool kits” to guide the activities of project management units, by train-
                                   ing project staff and beneficiaries and by promoting the horizontal exchange of experiences
                                   among projects.   will also reinforce the regional network in order to strengthen com-
                                   munication and collaboration among  projects and related public institutions, agencies
                                   and s. Its activities will cover the whole region.
                                    endeavours to further increase the efficiency and quality of project performance, by expand-
                                   ing the skills and capacity of the staff responsible for implementation. One  grant is being
                                   used to finance the Southern Cone Training Programme in Rural Development
                                   ₍₎. Under this programme, the Corporation for Regional Rural Development Training
                                   will provide regular training to project managers, professional and technical staff, private service
                                   providers and local government personnel. Staff from projects located in Argentina, Bolivia, Chile,
                                   Paraguay, Peru and Uruguay will participate.  will also provide technical assistance ser-
                                   vices to improve project implementation. This grant will enable  to offer a complete training
                                   network. Training services will be provided by the Foundation for Training and Applied Research
                                   in Agrarian Reform ₍₎ for the northern part of South America and the Spanish-speaking
                                   Caribbean countries, and by the Regional Unit for Technical Assistance ₍₎ for Central America,
                                   Panama and Mexico. Using this approach, training coverage will be provided for the whole region.
          Acacia seedlings are
                                                                                                                                          Giuseppe Bizzarri



         planted as part of the
         reforestation effort in
             degraded areas of
      Quilloac, Ecuador. IFAD
          encourages the rural
      poor to take a proactive
       role in the preservation
     and rehabilitation of their
                  environment.




72
                         The indigenous pastoralists of the high Andes puna of Argentina, Bolivia, Chile and Peru are
                         among the poorest segments of the Latin America and the Caribbean region. They constitute
                         an important part of the region’s hard-core rural poor. Living at an altitude of over   m,
                         these pastoralists endure some of the most harsh and difficult agro-ecological conditions in the
                         world. In the natural ranges of the Andean tundra, productive options are limited to the breed-
                         ing and raising of South American camelids, alpacas and llamas. Permanent freezing temperat-
                         ures by night prevent the cultivation of all known crop species, with the exception of a few
                         native tubers. Camelid fibre is a valuable product in the textile industry. Peasant producers,
                         historically, have been unable to realize its income-generating potential; this has been due
                         mainly to their isolation, low productive technologies and lack of marketing capacity. In ,
                          approved the first grant to the Regional Support Programme for the Development of
                         South American Camelids ₍₎; Phase  was approved in . In its early phases, the
                         programme improved technologies for camelid breeders, organized fibre, meat and hide mar-
                         keting groups and identified small-scale processors and artisans who could work with these
                         products. In Phase , organized producers negotiated directly with commercial processors of
                         graded fibre, and a marketing group organized directly by the peasants began operations. In
                         , a grant was approved for  . Its mission is to consolidate and extend the tech-
                         nological advances achieved by breeders, promote market-oriented initiatives for fibre, meat
                         and hides, and strengthen a functioning network of small producers/processors in the four
                         participating countries.
                                                                                                 BOX 13
                                                                 CONTINUING TO STRENGTHEN GENDER ISSUES:
                                  PROGRAMME   FOR THE   REINFORCEMENT OF GENDER ASPECTS IN IFAD PROJECTS


                         In June 1999, the Programme for the Reinforcement of Gender Aspects in IFAD’s Projects (PROFAGEP)
                         held its fourth seminar/workshop in La Serena, Chile. Over 100 professionals, including participants from
                         eleven IFAD projects, attended the meeting. The programme supports the incorporation of gender
                         aspects into IFAD-financed projects and promotes the equitable participation of men and women in pro-
                         ject activities. The programme has been introduced into all IFAD projects in the region. While the main
                         activity of the workshop was gender-related training for project staff, it also provided access to regional
                         publications and training materials on gender, and a space for the presentation and demonstration of
                         products manufactured by men and women beneficiaries. Subregional working plans on gender aspects
                         have been formulated. They are being implementated with backstopping provided by RUTA, PROCASUR
                         and CIARA (all IFAD-financed initiatives), as well as by the Caribbean Development Bank.




                                                                                                                                       Camelids in the Andean
Francesco Paolo Gianzi




                                                                                                                                       highlands of Peru graze
                                                                                                                                       on shrubs and grass
                                                                                                                                       where the land is not
                                                                                                                                       suitable for other forms
                                                                                                                                       of food production.
                                                                                                                                       Camelid meat is an
                                                                                                                                       excellent source of
                                                                                                                                       protein and micro
                                                                                                                                       nutrients, while the wool
                                                                                                                                       and hide is a potential
                                                                                                                                       source of income for
                                                                                                                                       indigenous pastoralists.




                                                                                                                                                                   73
     The Regional Unit for Technical Assistance ₍₎, created in  with the participation of
     the World Bank, ,  and , has continued its inter-agency coordination activities in
     Central America. During , financial services and agricultural markets, were the subject of
     seminars and policy documents. Personnel from  ongoing projects discussed the challenges
     and limitations faced by national, subregional, and extra-regional markets and, in these dis-
     cussions, they identified the risks and opportunities for the agricultural products of ’s ben-
     eficiaries. The problems and opportunities of rural financing in the subregion were analysed
     by  project staff and  personnel in a seminar held in Managua, Nicaragua. As a result,
     proposals to improve the rural financial systems supported by ongoing projects are now being
     implemented. ’s project analysis/evaluation software has been upgraded and is being used
     by projects and government institutions both within and beyond the subregion.
     Summary of IFAD Financing in the Region
     Five projects in Latin America and the Caribbean were approved in  for Argentina,
     El Salvador, Guatemala, Honduras and Nicaragua for a total of  . million.
     Thus  is now financing a total of  ongoing projects in  borrower countries for a total
     value of  . million financed by  and a total of  . million dollars financed
     by other external sources, borrower governments and beneficiaries themselves. Principal cofin-
     ancing partners in the region include the European Union, , the  Fund for International
     Development and the World Bank group. The cooperating institutions for the Fund in the
     region are comprised of , the Caribbean Development Bank ₍₎, , ,  and
     the World Bank.




74
NEAR EAST AND NORTH AFRICA                           Overview: Income Inequality and Increased Rural Poverty
                                                     In the Near East and northern Africa subregion, the year  brought
                                                     a number of positive developments in most  borrower countries.
                                                     The downward trend of oil prices in  was reversed in , result-
                                                     ing in increased revenues for  member states. With a new gov-
                                                     ernment in place in Israel, prospects for the peace process have
                                                     improved, and final status negotiations for Gaza and the West Bank
                                                     are scheduled for completion by September .
                                                     Real  growth in many of the low and middle-income countries of
                                                     the region continues at rates averaging -%, comparing well with the
                                                     high-income countries of the region and most of western Europe.
                                                     However, developments in  were less encouraging in countries
31    COUNTRIES
                                                     where rural poverty is most widespread and most severe, such as
Albania                                              Somalia, The Sudan and Yemen.
Algeria
                                                     The appearance of prosperity is increasingly threatened by growing
Armenia
Azerbaijan                                           income inequality and the potential of associated civil strife. This is
Bosnia and Herzegovina                               particularly true in countries with faster growing economies. Illiteracy
Croatia                                              rates remain disproportionately high in rural areas and among women
Cyprus                                               compared to countries in other regions at similar levels of national
Djibouti
                                                     income per capita. Past demographic trends have produced very young
Egypt
                                                     populations, with more than % of the total population under age
Georgia
Iraq                                                  in a number of countries. As a result, unemployment among youth
Israel                                               has been a recurrent preoccupation of policy makers in . These
Jordan                                               three issues – income inequality, low-level social indicators in rural
Kuwait                                               areas and youth unemployment – are likely to dominate economic and
Lebanon
                                                     social policy in the region in the near future.
Libyan Arab Jamahiriya
Malta                                                In , the agricultural sectors of Iraq, Jordan, Morocco and Syria
Morocco                                              were hard hit by severe drought. Repercussions of the drought, suf-
Oman                                                 fered most acutely by poor rural households as both consumers and
Qatar
                                                     producers, included loss of employment and income, reduced food
Republic of Moldova
Romania
                                                     availability and associated price increases. These repercussions have
Saudi Arabia                                         affected the overall economies of these countries in  and are likely
Somalia                                              to continue to do so in the year .
Sudan
Syria
                                                     In central and eastern Europe and the Caucasus, the escalation of the
The Former Yugoslav Republic of Macedonia            conflict in the Kosovo Province of the Federal Republic of Yugoslavia
Tunisia                                              overshadowed all other issues. Destabilizing political, economic and
Turkey                                               social effects have been strongest in Albania and The Former Yugoslav
United Arab Emirates                                 Republic of Macedonia. Intensification of military action in Chechnya
Yemen                                                and the violent assassination of the Prime Minister in Armenia in late

                          Mustafadi Souadsoukoh
                                                                                                                                Jon Spaull




                              makes yoghurt from
                         sheep’s milk in her home
                            in Baalbek, Lebanon.
                              She has attended a
                        two-month course on the
                         hygienic preparation and
                        preservation of food. The
                           education and training
                                   of women is of
                           paramount importance
                              in overcoming rural
                            poverty in the region.




                                                                                                                                             75
          Project director Jamil
       Jaa’freh examines olive
     tree seedlings planted on
         rocky slopes in Karak,
     Jordan. Stone walls have
       been built to help retain
             water and prevent
      erosion on land normally
     unsuitable for cultivation.




                                                                                                                                        Jon Spaull
                                    had similar destabilizing effects in the Caucasus countries, where tension has continued
                                   to mount. The financial crisis in Russia in  had a strong impact on the already declining
                                   economic performance in all countries of the Commonwealth of Independent States ₍₎.
                                   Overall economic growth rates among  borrowers in the subregion in  were negative
                                   and, for the most part, gains made in Albania and The Former Yugoslav Republic of Macedonia
                                   in  were wiped out in . There are clear indications that the percentage of rural people
                                   living in poverty increased and that the level of their poverty deepened in .
                                   Deteriorating economic performance and political instability tended to dampen agricultural
                                   output levels in most areas. Incomplete reform processes brought mixed market signals to agri-
                                   cultural producers and, at the same time, inhibited their ability to respond to economic incent-
                                   ives. Little progress was made in developing the formal and informal institutions that are nec-
                                   essary to the integration of small and medium-scale producers into agricultural-sector markets.
                                   Strategy and Approach: Participatory Resource Management
                                   In ,  pursued its poverty-reduction strategy by helping the rural poor in the subre-
                                   gion overcome their severe natural resource constraints regarding soil and water. Greatest
                                   emphasis was placed on rainfed agriculture and resource conservation. In addition, invest-
                                   ments in infrastructure, technology and institutions were designed to reduce environmental
                                   degradation and to instigate the adoption of sustainable resource management practices as a
                                   means of increasing household food security and incomes. The Fund promoted microenter-
                                   prises and off-farm employment opportunities to provide other solutions to those seeking to
                                   overcome natural resource constraints.
                                    added a new dimension to its existing approach emphasizing participation and particip-
                                   atory resource management: decentralization in the public sector. In addition to its previous
                                   efforts concentrating on local-level government and community institutions, the Fund added
                                   explicit support to decentralization processes that delegate responsibilities and resources to the
                                   local level.  continued to foster participatory, community-level initiatives to identify
                                   required investments. These allowed the selection and implementation of the investment activ-
                                   ities that best suited their respective local resource bases and their social/economic structures.
                                   In Yemen, for example, the new Al-Mahara Rural Development Project explicitly provides for the
                                   negotiation of a three-year formal contract-type arrangement (referred to as a “social agreement”)
                                   between individual communities and the project. The two parties to the agreement jointly
                                   decide upon priority activities for poverty reduction in the community and agree upon the
                                   cost-sharing arrangements to finance them. Another example is found in North Kordofan, in
                                   The Sudan, where the new  Rural Development Project, approved in , helps local
                                   councils fulfil the new roles and responsibilities delegated to them by the government as it
                                   pursues its new national policy of decentralization.

76
                                                                                                                        Arayik Unussian spreads
                                                                                                                        fertilizer on his cabbage
                                                                                                                        and wheat field in
                                                                                                                        Azadan, Armenia. NGOs
                                                                                                                        are working with IFAD to
                                                                                                                        provide poor rural
                                                                                                                        producers with access to
                                                                                                                        agricultural inputs such
                                                                                                                        as seed and fertilizer.
Robert Grossman




                  The basic strategy for lending to the countries of central and eastern Europe and the Caucasus
                  was to undertake a range of investments and activities that would enable poor households to
                  benefit from participation in the market. These included investments to improve access and
                  control over productive resources such as land, water and capital. They also included a heavy
                  emphasis on the development of institutions that, as in , was directed largely towards finan-
                  cial institutions. In addition to these activities, the Fund persevered in its work with local com-
                  munities and government counterparts to identify and develop a variety of formal and informal
                  institutions among beneficiaries. In the North West Agricultural Services Project in Armenia,
                  for example, an international , the Armenian Technology Group, helped create institutions
                  to supply agriculture inputs (in this case, potato and wheat seed) to poor rural producers, while
                  simultaneously building public-sector institutional capacity to certify such seed.
                  In ,  added a focus on the upland and mountainous areas in response to government
                  priorities and the high incidence of poverty. The Fund expects to develop this as an important
                  area-based orientation. In addition to ongoing projects in mountainous regions of Albania,
                  Armenia, The Former Yugoslav Republic of Macedonia and Romania, in   financed a
                  Mountain Areas Development Programme in Albania.  is also preparing a joint programme
                  for Azerbaijan and Georgia that should become effective in .
                  In eastern Europe, as in the Near East and northern Africa, participation and participatory
                  resource management have been at the core of ’s approach to the implementation of its
                  strategy. This has been most important in the water sector, with continued development of
                  beneficiary-managed s to operate and maintain irrigation systems.
                  To tailor overall strategies and approaches in the region to country-specific conditions, the
                  Fund elaborates individual country strategies. Ten individual country strategies – for Albania,
                  Algeria, Azerbaijan, Bosnia and Herzegovina, Gaza and the West Bank, Georgia, The Former
                  Yugoslav Republic of Macedonia, Moldova, Tunisia and Yemen – have been completed as of
                  year-end .
                  Special Initiatives
                  In a special initiative in May ,  chaired a workshop on decentralization with its bor-
                  rowers from the Near East and northern Africa. The Fund invited its counterparts and senior
                  officials from nine countries and eight of its international partners to Morocco to discuss the
                  situations in their own countries with respect to decentralization of the public sector.
                  Participants analysed what decentralization in government can mean for the rural poor and
                  how to design poverty-reduction programmes so that they benefit from the advantages of
                  decentralization (e.g., improved maintenance of local infrastructure) and mitigate its disadvan-
                  tages (e.g., domination of resource-allocation decisions by local elites). Of special interest was

                                                                                                                                                    77
      A field technician from
                 the Lebanese
       Agricultural Research
           Institute examines
         experimental fodder
      crops. IFAD is building
      stronger links between
       research workers and
     poor farmers in an effort
             to speed up the
     development of relevant
                   technology.




                                                                                                                                   Jon Spaull
                                 the experience of Morocco, which has been among the first of the Arab states to begin to decen-
                                 tralize some of its political and administrative power. For example, a programme is already in
                                 place to delegate some authority to local government and to hand over control of natural
                                 resources, such as rangeland, to local communities. ’s own new projects designed in 
                                 in Jordan, The Sudan and Yemen all included “pull-factor” activities designed to help local
                                 governments and communities bring about de facto decentralization, both within and outside
                                 of explicit decentralization policy frameworks.
                                 In Lebanon,  created a rural poverty map for the country. Due to its prolonged civil war,
                                 and the fact that the rural sector is a small part of what is a growing service-sector economy,
                                 information on the actual living standards of rural people is very scarce. There is known to be
                                 severe poverty in some regions of the country, and stark contrast between renewed affluence in
                                 urban Beirut and poverty in rural areas. Yet the level of poverty in these regions has not been
                                 fully evaluated by either the Government of Lebanon or the international community. 
                                 thus entered into a partnership with the Centre for World Food Studies at the Free University
                                 in The Netherlands, using trust fund resources provided to  by The Netherlands and ’s
                                 own resources, in order to document actual conditions in that country. (This exercise builds
                                 on the 1998 rural poverty surveys undertaken in Armenia, Azerbaijan and Georgia with the
                                 same university and with financial support from Japan and The Netherlands.)
                                 Another special initiative taken by  in  was to hold a development forum in Baku,
                                 Azerbaijan. The purpose of the forum was to bring together the wide-ranging group of stake-
                                 holders directly concerned with the programme for the Mountainous Areas in Azerbaijan and
                                 Georgia, which was under design in . At the forum, participants analysed constraints on
                                 rural poverty reduction in the subsectors of crop production, livestock, forest management,
                                 environmental protection, village infrastructure, and health and education. Based on their
                                 analysis, consensus was reached on activities that should be adopted by their respective gov-
                                 ernments and by  in the planned programme. The forum was the first such experience for
                                 the majority of participants, who were genuinely excited to have an active role in the pro-
                                 gramme design.
                                 Summary of IFAD Financing in the Region
                                 Five projects in the Near East and North Africa were approved in  for Albania, Jordan,
                                 Moldova, The Sudan and Yemen for a total of  . million.
                                 Thus  is now financing a total of  ongoing projects in  borrower countries for a total
                                 value of  . million financed by  and a total of  . million financed by other
                                 external sources, borrower governments and beneficiaries themselves. Principal cofinancing part-
                                 ners in the region include , s and the World Bank group. The cooperating institutions
                                 for the Fund in the region are comprised of the f, ,  and the World Bank.
78
PROJECTS APPROVED IN 1999:
SUMMARIES BY COUNTRY
Innovative features are highlighted after each project description,
these innovations are generally related to IFAD’s Corporate Strategy.
Project descriptions are arranged in alphabetical order.




                                                                        79
     ALBANIA                                               Farm families in the mountainous areas of Albania are highly vulnerable in terms of
     Mountain Areas Development Programme                  food security and nutrition. The recent crisis in Kosovo has added to the strain on the
                                                           family economy and the infrastructure system; in the programme area, private house-
                                                           holds are hosting almost 300 000 refugees. The overall goal of this IFAD-initiated pro-
                                                           gramme is to raise the standard of living of poor people living in mountain areas. It
                                                           will promote and support increased agricultural production and productivity, better
                                                           household food security and nutrition, increased incomes from agricultural and related
                                                           rural enterprises and improved infrastructure. The programme will build upon, consol-
                                                           idate and extend the achievements of the first two IFAD-financed projects in Albania.
                                                           The first phase of the programme, which will be implemented over a six-year period,
                                                           seeks to accomplish the following goals:
                                                           •   establish an agency for mountain-area development capable of elaborating a
                                                               resource-efficient development programme and providing effective technical, finan-
                                                               cial and managerial support for its realization;
                                                           •   establish a sustainable financial institution that can provide financial services to
                                                               rural mountain-area clients;
                                                           •   ensure sustainable and equitable use of irrigation water – a vital commodity in the
                                                               livelihood of farmers;
                                                           •   allow farmers full benefit from programme-rehabilitated irrigation schemes by sup-
                                                               porting increased crop production and diversification into higher-value crops;
                                                           •   improve food security and livestock development based on increased feed supply
                                                               and improved animal health; and
                                                           •   facilitate market-oriented agriculture and improve standards of living by alleviating
                                                               small infrastructure bottlenecks through construction or rebuilding of roads and
                                                               village water supplies.




     ARGENTINA                                             In Argentina, approximately 160 000 rural families live below the poverty line; most
     North Western Rural Development Project (PRODERNOA)   belong to ethnic minorities. About two thirds of the poorest families are concentrated
                                                           in the northern provinces. The main objective of this five-year IFAD-initiated project is
                                                           to increase incomes of small-scale producers and the rural poor in the north-west-
                                                           ern provinces. Historically, these provinces have been characterized by a lack of
                                                           public/private institutional mechanisms that specifically address the needs and con-
                                                           straints of the rural poor. To combat this lack of institutional support, the project will
                                                           promote an entrepreneurial business environment by providing technical assistance
                                                           and financial services to the rural poor. More specifically, the project seeks to:
                                                           •   foster the development of technology aimed at linking producers with existing markets;
                                                           •   assist in the development of a demand-driven, private, rural market for technical
                                                               assistance services;
                                                           •   provide assistance for market development, such as capacity-building and busi-
                                                               ness advisory/information services; and
                                                           •   promote income-generating investment initiatives through the provision of finan-
                                                               cial services, thus allowing small-scale producers to adjust their production sys-
                                                               tems to market demand.




80
Africa I:                      Africa II:
Western and Central Africa     Eastern and Southern Africa     Asia and the Pacific            Latin America and the Caribbean   Near East and North Africa


    Country                       Country                         Country                        Country                           Country
    Project Area                  Project Area                    Project Area                   Project Area                      Project Area




Seven poor mountain districts – five in the south and two in the north-central part of the     Loan Amount:
country – with a total population of 365 000 persons (89 000 families) are targeted in         . million (approximately  . million) on
the programme’s first phase. Fourteen districts will have been covered by the end of the      highly concessional terms.
programme. Farm families owning less than 2.5 ha of arable land, of which not more            Total Programme Costs:
than 0.75 ha can be irrigated, will be part of the programme’s priority target group.         Estimated at  . million, of which a grant of
                                                                                                 will be provided by ,    will
Innovative Features:
                                                                                              be (tentatively) provided by The Netherlands
The programme will set up the Mountain Areas Development Agency as a sustain-
                                                                                              Development Organization,  . million by other
able, market-oriented centre of excellence. The agency will have a number of benefi-          cofinanciers still to be identified,    by a
cial features, including:                                                                     national financial institution,  . million by the
•   a programmatic approach designed to foster a continuing, coherent and timely              Government and  . million by the beneficiaries.
    response to clients and to encourage their full participation in determining its          Cooperating Institution:
    activities;                                                                               .
• a decentralized structure and system for outsourcing; and
• an emphasis, in conjunction with the Mountain Areas Finance Fund, on sustain-
    able individual and association-based private enterprise and local empowerment
    and capacity-building.
This programme will also establish a model for the provision of services to disad-
vantaged areas in transitional economies.




The project covers selected areas in three provinces where more than 60% of the               Loan Amount:
rural population is classified as poor. Approximately 22 500 rural families form part of       . million (approximately  . million) on
the target group, and it is estimated that 6 000 families – with households headed by         ordinary terms.
women accounting for 15% of the total – will benefit directly from project activities.         Total Project Costs:

Innovative Features:                                                                          Estimated at  . million, of which   
                                                                                              will be provided by the central Government and
• In this project, a clear differentiation is being made between two groups of bene-
                                                                                               . million by local Government (three provinces).
    ficiaries: the rural poor and the destitute. Different sets of project instruments will
                                                                                              Cooperating Institution:
    be used to address the specific needs of each group.                                       .
• The “venture” aspect of the initiatives to be supported draws attention to possible
    risk factors. To minimize and manage these risks, all activities to be financed/imple-
    mented will need to show a profit for the individual producers or groups involved.
    In this way, the project will build confidence and experience among credit bene-
    ficiaries and, in doing so, transform them into clients of the regular banking system.
    This transition process will be reinforced when the guarantee mechanism is intro-
    duced after three years of project execution.
• The project is placing special emphasis on forging links between rural and urban
    markets by providing information on business opportunities and by offering advis-
    ory services on technical, managerial, financial and legal matters.




                                                                                                                                                             81
     BANGLADESH                                     As one of the poorest countries in the world, Bangladesh is particularly vulnerable to
     Smallholder Agricultural Improvement Project   floods and cyclones, which destroy crops, livestock and property and cause loss of
                                                    life. This six-year IFAD-initiated project seeks to boost the food production and house-
                                                    hold incomes of the rural poor in the districts of Jamalpur, Mymensingh and
                                                    Sherpur in the north-centre of the country. Its overall goal is to improve food secur-
                                                    ity and living standards, while enhancing the economic infrastructure serving targeted
                                                    rural households.
                                                    An important secondary objective of this project is to strengthen the implementation
                                                    capacity of key institutions, including community groups, the Department of Agricultural
                                                    Extension, the local Government Engineering Department and NGOs. To this end, the
                                                    project plans to:
                                                    •   contract suitable NGOs to form cohesive beneficiary groups and provide them
                                                        with training and support;
                                                    •   strengthen extension services and reorient their approaches to ensure beneficiary
                                                        participation in the planning and implementation of activities;
                                                    •   increase employment opportunities for the landless, functionally landless and
                                                        women through provision of collateral-free credit for income-generating activities;
                                                    •   promote a number of activities to benefit minority groups, and improve basic infra-
                                                        structure, with a focus on providing adequate access roads and marketing and
                                                        training facilities.



     BHUTAN                                         This eight-year IFAD-initiated programme builds on IFAD’s experience in the country
     Second Eastern Zone Agricultural Programme     and on the successful implementation of the First Eastern Zone Agricultural Project. It
                                                    will be implemented in two phases of three and five years under the flexible lending
                                                    mechanism. The programme’s specific objectives are to:
                                                    •   increase agriculture and livestock production by extending agricultural and live-
                                                        stock technology and development programmes;
                                                    • raise target-group household incomes;
                                                    • establish sustainable food security;
                                                    • generate technologies for extension through participatory research and on-farm
                                                        testing;
                                                    • develop/implement approaches encouraging beneficiary participation in order to
                                                        increase the sustainability and effectiveness of all programme activities;
                                                    • improve farmer access to markets, agriculture and livestock inputs; and
                                                    • support the timely and cost-effective delivery of credit services.
                                                    The overall objectives also focus on the conservation of natural resources and the
                                                    establishment of an equitable system of development.
                                                    The programme covers the six districts of the eastern region, where about 81% of
                                                    the rural households are food-insecure. The target group comprises 22 840 rural
                                                    households (155 312 people). It is estimated that 25% of the total rural households in
                                                    the programme area will directly benefit from programme activities, particularly from
                                                    increased crop production, greater household food security, improved nutrition and
                                                    higher cash incomes. All farms will benefit from improvements to extension, research
                                                    and support to the input supply farms and other units.



     BURKINA FASO                                   The overall goal of this seven-year IFAD-initiated project is to diversify and increase
     Rural Microenterprise Support Project          rural incomes by launching a sustainable process of microenterprise development.
                                                    This will be achieved by setting up support mechanisms for rural microentrepreneurs
                                                    and by strengthening decentralized financial systems. Key objectives of the project
                                                    are to:
                                                    •   improve the availability of basic goods and services in rural areas;
                                                    •   lengthen the period of the year during which the rural population is gainfully
                                                        employed; and
                                                    • reduce the exodus of rural youth through the creation of working opportunities.
                                                    While national in scope, the project concentrates initially on areas that favour the emer-
                                                    gence of rural microenterprise. The target group consists of individuals and groups
                                                    that, because of their poverty or insufficient knowledge of appropriate technologies,
                                                    are unable to implement their own business ideas for the rural sector. The project,
                                                    which has been prepared in line with the main thrusts of IFAD’s medium-term strat-
                                                    egy for Burkina Faso, places special emphasis on the needs and aspirations of poor
                                                    rural women, who represent a particularly vulnerable category. Women and youth will
                                                    be ensured equal access to all project services and facilities.


82
The target group encompasses the landless and marginal or small farmers, with par-             Loan Amount:
ticular attention to women heads of households, Adivasi (indigenous families) and               . million (approximately  . million) on
Charlanders (people who live on newly formed riverbanks). About 131 000 households             highly concessional terms.
are targeted, of which 13 000 are Adivasis and 5 000 Charland households. The pro-             Total Project Costs:
ject will benefit the entire population of the project area by improving basic infrastruc-      Estimated at  . million, of which  . million
ture and living conditions.                                                                    will be provided by ,  . million by the
                                                                                               Government,    by participating banks and
Innovative Features:
                                                                                                  by the beneficiaries.
• To ensure that target beneficiaries have access to credit, the project will establish
                                                                                               Cooperating Institution:
    pilot revolving funds (savings and credit) administered by the community with sup-
                                                                                               .
    port from and under the supervision of suitable NGOs. Private commercial banks
    will be invited to participate in credit supply and to support selected NGOs.
• The project targets minority populations, namely the Adivasi and Charlanders,
    and addresses their unique vulnerabilities. In the case of the Adivasi, project funds
    will be channelled into a development fund exclusively for the use of these tribal
    communities. The main focus of support to the Charlanders is flood protection
    for both poor individual families and for communities.
• The project will test six pilot ecological villages, incorporating community bio-gas
    plants and energy-saving stoves, to improve village living conditions.




Innovative Features:                                                                           Loan Amount:
• The programme gives a central role to the village representative bodies (GYTs),               . million (approximately  . million) on
    which will become the focal points for local area development. Their ability to per-       highly concessional terms.
    form this role will be progressively increased as they gradually take over develop-        Total Programme Costs:
    ment activities. A “local initiatives fund” placed at their disposal will further enable   Estimated at  . million, of which  . million
    them to learn to plan and execute small-scale infrastructure and other local, need-        will be provided by the Netherlands Development
    based activities. Temporary task forces will provide training and technical assist-        Organization,    by the United Nations
    ance to the GYTs, tapping the resources of all stakeholders – the Government,              Capital Development Fund,  . million by the
    NGOs, the private sector and farmer organizations.                                         Government and    by the beneficiaries.
• Research trials will be taken out of research stations and brought down to the vil-          Cooperating Institution:
    lage level and into farmers’ fields. This move represents a quantum shift towards          .
    participatory on-farm testing and demonstration in which researcher, extension
    agent, farmer and trainer all collaborate.
• The programme will also encourage private-sector involvement in tasks previously
    undertaken by the public sector. For example, the programme will support com-
    mission agents in the districts to take responsibility for distributing farm inputs
    and some other extension tasks.
• Opportunities for entrepreneurial development will be provided to farmers through
    contract breeding of animals (contracted between farmers and government live-
    stock centres), the establishment of private para-veterinarian practices and the
    development of farmer-owned and managed nurseries. To enable farmers to take
    advantage of these opportunities, a village-based, group savings-and-lending
    scheme will be promoted by the Bhutan Development Finance Corporation.




Innovative Features:                                                                           Loan Amount:
• The project is the first IFAD intervention in Burkina Faso dealing exclusively with           . million (approximately  . million) on
    the off-farm sector. While external donors and NGOs have offered rural microen-            highly concessional terms.
    trepreneurs technical and financial support on a selective basis, no consolidated          Total Project Costs:
    attempt has been made until now to assist this increasingly important subsector.           Estimated at  . million, of which  . million
• The project will provide technical support to rural microenterprises using a new             will be provided by the Network of People’s Bank of
    mechanism based on area focal points. Use of such focal points will enable the             Burkina Faso,  . million by the Government and
    project to cover extended parts of the country, avoid any duplication of interven-          . million by the beneficiaries.
    tions and promote complementary interventions.                                             Cooperating Institution:
                                                                                               .
• The project’s strong private-sector orientation distinguishes it from any previous
    intervention and is evidence for its potential success and sustainability. Private
    agencies, institutions and enterprises will play a crucial role during the imple-
    mentation period, and it is also foreseen that, after the seven-year investment
    phase, all support activities will be taken over by the private sector, in particular
    by former project personnel and partners. This “hand-over” will ensure continuity
    without reliance on public funds.




                                                                                                                                                         83
     BURUNDI                                             Burundi’s socio-political crisis, compounded by economic sanctions imposed by
     Rural Recovery and Development Programme            neighbouring countries, has led to economic decline and increasing impoverishment
                                                         (per capita income is estimated to have fallen from USD 180 in 1992 to a low of
                                                         USD 134 in 1997). This seven-year IFAD-initiated programme has, as its objectives,
                                                         the reduction of rural poverty and the promotion of sustainable market-led growth.
                                                         The overall goal is to strengthen the enabling socio-economic environment in a
                                                         manner conducive to the reduction of rural poverty. The programme seeks to accom-
                                                         plish this goal by creating a stakeholder economy based on equitable partnerships, co-
                                                         investment and the achievement of national reconciliation.
                                                         To achieve its strategic goal, the programme’s specific objectives are to:
                                                         •   enhance the productive capacity of marginalized, poor communities;
                                                         •   promote household food security;
                                                         •   promote community-driven development as a means of ensuring people and
                                                             gender empowerment with a view to furthering reconciliation; and
                                                         • contribute to environmental preservation and the restoration of rural livelihoods.
                                                         The programme will use an interactive, community-based participatory approach to
                                                         programme planning, implementation and monitoring.
                                                         Since the crisis began in 1993, more than 100 000 people have lost their lives, and
                                                         over 800 000 people have been displaced and are living in camps. The primary target



     CAMBODIA                                            Decades of war and internal strife have made Cambodia one of the 22 poorest coun-
     Agricultural Development Support Project to Seila   tries in the world in terms of GNP per capita (USD 300 in 1996). The rural poor number
                                                         over four million and comprise 40% of the country’s population. The strategic goal of
                                                         this six-year IFAD-initiated project is to increase the food and income security of the
                                                         targeted population in four north-western provinces. The main objectives are to help
                                                         poor households in the area sustain an increased level of farm productivity and
                                                         income and diversify their crop and livestock activities.
                                                         Specifically, the project seeks to:
                                                         •   provide support to agricultural development activities tailored to the needs of the
                                                             poor and food-insecure farming households;
                                                         • empower local communities and beneficiaries to successfully maintain and
                                                             manage their productive resources;
                                                         • strengthen the capacity of local institutions, particularly provincial and district agri-
                                                             cultural departments, to target and manage investment programmes in a parti-
                                                             cipatory manner; and
                                                         • assist NGOs and microfinance institutions in providing retail savings and credit
                                                             services for the target group, with the strengthened Rural Development Bank as
                                                             an effective wholesaler of credit.
                                                         Several design features should reinforce the project’s potential impact on the situation
                                                         of women. The target group comprises approximately 245 000 households, equivalent
                                                         to 64% of the rural population. They mostly include food-insecure families with less
                                                         than 1.5 ha of land, returnees from the border, internally displaced persons, who often
                                                         lack access to land for growing rice, mine victims and unemployed youth.
                                                         Approximately 64 500 households will benefit directly from project interventions.




84
group is those households that were displaced and have now either resettled in their         Loan amount:
original villages or plan to do so. In households headed by women or orphans, direct          . million (approximately  . million)
support to production capabilities is likely to have a rapid impact on domestic food         on highly concessional terms.
supply and nutritional status.                                                               Total Programme Costs:
                                                                                             Estimated at  . million, of which  . million
Innovative Features:                                                                         will be provided by the  Fund,  . million by
• The programme will systematically apply community development methodologies                ,  . million by the Government and
    and promote the empowerment of women over a vast geographical area. A few                 . million by the beneficiaries.
    NGOs already apply such methods here and there in Burundi, often at the com-             Cooperating Institution:
    mune level. However, for the first time, a specialized NGO will be involved at the       .
    national level.
• Although programme leaders are acutely aware that the pace of technological
    innovation should never be forced (especially under post-crisis conditions in which
    large sections of the population are primarily concerned with recovering their
    former economic and social status), the programme will promote those produc-
    tion methods and technologies deemed to be more effective and capable of gain-
    ing acceptance by the target population. Biological soil conservation and protec-
    tion methods clearly come under this heading, especially if they can be associ-
    ated with intensive livestock management and improved crop production in marsh-
    lands. Finally, the programme will test and promote the establishment of bench
    terraces for annual cultivation.




Innovative Features:                                                                         Loan Amount:
• The project will be implemented in areas where social mobilization and aware-               . million (approximately  . million)
    ness-raising of beneficiaries, participatory planning and local capacity-building,       on highly concessional terms.
    have already started and are creating demand for investment. To build on this            Total Project Costs:
    momentum, IFAD will finance agricultural investments that produce a rapid impact          Estimated at  . million, of which  . million
    on household food/income security and benefit the maximum number of rural                will be provided by  and Aus,
    poor.                                                                                     . million by the Government and   
                                                                                             by the beneficiaries.
• The project will provide physical and financial assistance to very poor households,
                                                                                             Cooperating Institution:
    organizing them into “joint liability” groups to enable them to more effectively bene-
                                                                                             .
    fit from social and economic development opportunities.
• Implementation will be decentralized to the villages, communes, districts and
    provinces so that project assistance reaches the intended beneficiaries and brings
    them into the development process. The project will help institutionalize the
    Government’s policy of decentralized planning and development. By including
    regular participatory planning, monitoring and beneficiary impact assessments,
    the lessons learned can be provided as feedback to provincial and national policy-
    makers. Project activities will be implemented by the provincial and district agri-
    cultural staff under output-oriented contracts to ensure accountability and
    transparency.
• The project will also pilot a new mechanism for IFI financing of rural financial ser-
    vices by channelling funds through the Rural Development Bank, which will act
    as credit wholesaler.




                                                                                                                                                       85
     CAMEROON                                         To a large extent, the Government of Cameroon’s ability to reduce poverty and ensure
     National Microfinance Programme Support Project   sustainable rural livelihoods for its population depends on the availability of viable
                                                      microfinance services and networks. The overall objective of this six-year IFAD-
                                                      initiated project is to help create and maintain a system of properly supervised MFIs
                                                      whose services are accessible to all segments of the population, including those
                                                      living in rural areas. In collaboration with other development partners and as part of
                                                      a national platform for microfinance development, IFAD has assisted the Government
                                                      of Cameroon in formulating a national microfinance policy that will protect small
                                                      depositors’ money while leaving room for institutional and product innovation.
                                                      More specifically, the project’s objectives are to:
                                                      •   increase the ability of government institutions to implement the national microfi-
                                                          nance policy and establish a permanent consultative mechanism that brings
                                                          together concerned government departments, MFI networks and professional
                                                          associations;
                                                      • support the consolidation and professional development of MFI networks and the
                                                          expansion of their outreach;
                                                      • replicate, through action research, innovative approaches to rural microfinance;
                                                          and
                                                      • capitalize on and disseminate experiences and best practices.
                                                      While national in coverage, the project devotes special attention to the more disad-
                                                      vantaged segments of the population with little or no access to financial services.



     CAPE VERDE                                       Cape Verde is faced with a combination of environmental and socio-economic chal-
     Rural Poverty Alleviation Programme              lenges due to extremely harsh climatic conditions, inequitable land tenure, limited fish-
                                                      ery resources and few economic opportunities. The result is a very high incidence of
                                                      poverty, about 70%. In November 1997, the Government finalized its own poverty
                                                      policy and strategy and presented the National Programme to Alleviate Poverty (PNLP)
                                                      at a donors’ round table. The costs of the PNLP were estimated at USD 75 million.
                                                      The key goals of the nine-year IFAD-initiated programme are to develop rural
                                                      peoples’ institutions that will mobilize common-interest groups and communities and
                                                      enhance the ability of their emerging leaders to develop effective partnership relations
                                                      with other organizations in the private and public sector.
                                                      Specifically the programme seeks to:
                                                      •     create more income for programme beneficiaries;
                                                      •     establish better access to social services;
                                                      •     improve living conditions for poor people in the areas selected for programme
                                                            intervention; and
                                                      • establish arrangements for mutual cooperation between the civil-society organi-
                                                            zations engaged in the fight against poverty and the public authorities whose task
                                                            it is to support and serve them.
                                                      It will also assist the Government’s ongoing efforts towards decentralized rural development.
                                                      The programme is national in scope, but is initially limited to the poorest and most
                                                      populous islands, which contain over two thirds of the rural poor of Cape Verde. It
                                                      concentrates on farmers with rainfed lands, who constitute the poorest socio-




86
Poor, small-scale users of resources, who are clients of rural and urban MFIs, consti-         Loan Amount:
tute the target group. The project will also contribute significantly to improving the sit-      . million (approximately  . million)
uation of women, since the majority of MFI clients come from the informal sector, in           on highly concessional terms.
which women predominate.                                                                       Total Project Costs:
                                                                                               Estimated at  . million, of which  . million
Innovative Features:                                                                           will be provided by the Government and   
• IFAD has played a key facilitator role in this project by bringing together govern-          by the beneficiaries.
    ment agencies, donors, MFI networks and NGOs in an effort to facilitate the devel-         Cooperating Institution:
    opment of the entire rural microfinance system. The project will help coordinate           .
    the activities of all major stakeholders and will intervene in particular areas to
    extend the financial services of sustainable microfinance institutions to rural women
    and the poor.
• The project focuses on expanding and strengthening MFIs and on broadening the
    range and coverage of financial services. Project implementation has been con-
    ceptualized in a decentralized manner, with beneficiary MFIs and networks taking
    responsibility for their own delivery and recovery systems as well as monitoring
    and control mechanisms.
• The strength of the project will be direct implementation of project activities by
    the agencies, supported by technical assistance and other resources provided
    under the project.




economic group and have minimal access to land; poor artisanal communities; food-              Loan Amount:
insecure and/or women-headed households; and unemployed youth.                                  . million (approximately  . million)
                                                                                               on highly concessional terms.
Innovative Features:                                                                           Total Programme Costs:
• The programme will build on the Government’s decentralization policy, which sup-             Estimated at  . million, of which  . million
    ports the establishment of regional commissions of partners (CRPs) as associa-             will be provided by the Government and  . million
    tions under private law, one in each of the four programme areas. Membership of            by the beneficiaries.
    the CRPs will include representatives of local communities and common-interest             Cooperating Institution:
    groups, NGOs operating in the area, and representatives of municipalities and              .
    decentralized government services that join on a voluntary basis.
• Financial resources will be provided to each CRP participating in the programme.
    Decisions on allocations of resources to fund individual microprojects will be made
    by the general assemblies of the CRPs, in which local communities and common-
    interest groups will hold the majority of votes. By utilizing such an approach, the pro-
    gramme provides a mechanism that enables associations of rural poor to join as
    equal partners both in implementing the Government’s poverty-alleviation policy in
    accordance with their own strategic choices and in selecting microprojects to imple-
    ment that policy. Thus, the programme concentrates on institutional and procedural
    aspects rather than on the specific content of its poverty-alleviation interventions.
• The programme will be implemented in three distinct phases, under the flexible lending
    mechanism, and should enhance the Government’s decentralization policy by transfer-
    ring responsibilities and resources from the central to the local government level.




                                                                                                                                                         87
     CHINA                                               China has an impressive record in terms of reducing absolute poverty over the last
     Qinling Mountain Area Poverty Alleviation Project   four decades. This record is mainly the result of overall economic growth and China’s
                                                         strong commitment to improving the standards of education, health and nutrition for
                                                         the entire population. Nevertheless, poverty is still acute in many rural areas, and there
                                                         remains a need for sustainability in any poverty-eradication strategy and a continuous
                                                         effort over an extended period of time. The goal of this six-year IFAD and WFP-
                                                         initiated project is to ensure food and income security for vulnerable rural house-
                                                         holds living in a mountainous environment with limited and degraded natural
                                                         resources.
                                                         Specifically, the project seeks to:
                                                         •   empower beneficiaries to attain a sustainable increase in productive capacity, both
                                                             on- and off-farm; and
                                                         • ensure beneficiaries increased access to economic and social services, including
                                                             education, health, sanitation and social networks.
                                                         The project area covers the 128 poorest townships (with a population of about
                                                         1.5 million) within nine contiguous counties in the north-west of Hubei Province and
                                                         south-east of Shaanxi Province. The five counties of Shaanxi are part of the Shangluo
                                                         Prefecture, a nationally designated flood-prone area strongly affected by the August
                                                         1998 floods that devastated large parts of the Yangtze Basin and surroundings.
                                                         Typically, farm sizes are extremely small, production systems are subsistence-oriented,
                                                         and the production of cash crops is very limited. Almost all households are very poor
                                                         and live in extremely harsh conditions with limited food availability. The annual per
                                                         capita income in the project area is about half that in the rest of rural China.
                                                         The project targets 310 000 households, but it is expected that the entire project area
                                                         will be positively affected. Women constitute a significant part of the target group, and
                                                         project activities have been designed in full recognition of their important productive role.




     EL SALVADOR                                         The key objective of this six-year IFAD-initiated project is to contribute to the allevia-
     Rural Development Project for the Central Region    tion of rural poverty through building local capacity and increasing rural incomes,
     (PRODAP-II)                                         hence improving the standard of living of the rural poor. More specifically, the project
                                                         seeks to:
                                                         •    increase production and diversify income opportunities in agricultural and non-
                                                              agricultural activities, small-scale enterprises and marketing;
                                                         • strengthen local farmers’ organizations and institutions to facilitate their participa-
                                                              tion in the identification, design, implementation and evaluation of project-
                                                              supported activities;
                                                         • implement an efficient, sustainable credit system based on the gradual transfer of
                                                              responsibilities and funds to local intermediate financial institutions;
                                                         • build a sustainable technical assistance and extension service through the grad-
                                                              ual transfer of supervision and administration to local farmers’ organizations;
                                                         • mainstream and strengthen the gender perspective through project activities,
                                                              ensuring equal participation of men and women in activities and benefits and
                                                              reducing gender inequities in the project area; and
                                                         • promote sustainable management of soil, water and forest resources.
                                                         The project area covers a total of 32 municipalities with an estimated rural population
                                                         of 235 000 people. Of these, 74% live under the poverty line and 42% live in condi-
                                                         tions of extreme poverty. The target group consists of poor smallholders and landless
                                                         farmers, households headed by women (women represent 31% of the target popula-
                                                         tion), agricultural and non-agricultural workers and small rural entrepreneurs. The target
                                                         population is comprised of 30 000 families, with an average of six members per family.




88
Innovative Features:                                                                        Loan Amount:
• In this project, a strong emphasis has been placed on utilizing all methodologies          . million (approximately  . million)
    available for project analysis/control. For example, during project inception, both     on highly concessional terms.
    the project area and target group were identified via the vulnerability analysis and     Total Project Costs:
    mapping (VAM) methodology. The active participation of women and other target           Estimated at  . million, of which  . million
    groups was then secured through training of the township staff of the Project           will be provided by ,  . million by the
    Management Office in the use of participatory-rural-appraisal (PRA) methods for         Government and  . million by the beneficiaries.
    preparing village development plans. Such training should also increase their           Cooperating Institution:
    understanding of the living conditions and specific needs of the target group. As       .
    a result of the VAM findings, project leaders emphasized that credit packages
    must be both gender-sensitive and tailor-made, based on actual landholding and
    development plans of the individual borrower or group.
• Project monitoring is also a key focus. A beneficiary-initiated self-monitoring pro-
    gramme will require the submission of biannual written reports from the village
    community outlining the services and inputs received and the impact achieved.
    The VAM will also be used for processing data regarding the impact of project
    activities.
• In this project, technology is delivered directly to the people. Technologies relating
    to reducing post-harvest losses, improving soil conservation, increasing the level
    of organic farming and improving water management will be demonstrated directly
    on the farms of project beneficiaries. Extension efforts will emphasize non-timber
    forestry production as a means to generate income while simultaneously reduc-
    ing erosion. Extension with a poverty and gender focus will be the main instru-
    ment. Numerous small demonstrations and trials of selected, recommended pack-
    ages will be carried out on the fields of poor and very poor farmers, women in
    particular. The demonstration inputs will be provided free of charge to the benefi-
    ciary, allowing some of the poorest to improve their asset-building capacity.
• In addition to other activities, savings mobilization and increased beneficiary own-
    ership of rural credit cooperatives will be gradually strengthened and then intro-
    duced into ongoing projects.



Innovative Features:                                                                        Loan Amount:
• This project is based on participatory processes through which responsibility for          . million (approximately  . million)
    project implementation and evaluation will gradually be transferred to the benefi-      on intermediate terms.
    ciaries. Beneficiaries have participated in the project’s overall design, through       Total Project Costs:
    workshops held during the formulation and appraisal stages.                             Estimated at  . million, of which  . million
                                                                                            will be provided by the Government and  1.9 million
• The project will set up an innovative coordination link among all three IFAD-             by the beneficiaries.
    supported projects – the Rehabilitation and Development Project for War-Torn Areas in
                                                                                            Cooperating Institution:
    the Department of Chalatenango (PROCHALATE) in the north, the Rural Development
                                                                                            .
    Project for the North-Eastern Region (PRODERNOR) and PRODAP-II – to ensure an
    integrated and coordinated development effort throughout one of El Salvador’s poorest
    regions.
• Another innovative aspect of this project is that implementation will be based on
    demand, and the contracting, administration and supervision of technical assist-
    ance will be decentralized – on the basis of a cost-sharing system – in order to
    strengthen local organizations.
• A transition is foreseen from the centralized Agricultural Development Bank credit
    system developed for PRODAP-I to a system of placing credit through local finan-
    cial intermediaries.
As with all IFAD-initiated projects, significant resources have been allocated to
strengthen the mainstreaming of a gender approach throughout the project structure.




                                                                                                                                                        89
     GHANA                                              This five-year IFAD-initiated project is designed to extend the benefits of dam rehab-
     Upper-East Region Land Conservation and            ilitation and strengthen the capacity of WUAs, improve access of women to land and
     Smallholder Rehabilitation Project – Phase II      build on existing credit experience to improve household food security. As part of its
                                                        objectives for this second phase, the project seeks to:
                                                        •   resolve technical issues relating to irrigated agriculture and crop production;
                                                        •   address financial aspects of smallholder operations (rural savings and credit
                                                            groups);
                                                        • re-emphasize the importance of empowering smallholders through group activities;
                                                        • reinforce beneficiary participation and promotion of grass-roots organizations, par-
                                                            ticularly those that promote the interests of women;
                                                        • continue improvement of the most solicited rural infrastructure; and
                                                        • ensure an institutional framework conducive to post-project sustainability.
                                                        To better meet women’s credit needs, the project provides mobile banking facilities to
                                                        participating banks and savings/credit groups. Gender sensitization, negotiating-skills
                                                        enhancement and group development are major training components for both banks
                                                        and beneficiaries. About 34 400 family members, about 50% of the target group, will
                                                        benefit directly from project activities. The beneficiaries are rural people, including
                                                        smallholders, near-landless farmers, women, in general, and specifically women heads
                                                        of households. Women are targeted specifically, with a view to improving their eco-
                                                        nomic status, by providing them with working capital for small-scale processing and
                                                        trade activities. All of the population in the selected area will benefit from access to
                                                        drinking water supplies, latrines, feeder roads and crop-storage facilities.


     GUATEMALA                                          Armed conflict over a period of 36 years has had devastating consequences, espe-
     Rural Development Programme for Las Verapaces      cially for the rural population of Guatemala. Accordingly, one of the highest priorities
                                                        under the Peace and Reconstruction Agreements signed in 1996 by the Government
                                                        and the rebel forces was to combat rural poverty in the areas most affected. To that
                                                        effect, the Government requested that IFAD finance a project to support its fight against
                                                        rural poverty. This ten-year IFAD-initiated programme will contribute to the reduction
                                                        of rural poverty among indigenous peasants who live in a very fragile natural
                                                        resource environment in the poorest municipalities of the Las Verapaces Department.
                                                        The specific objectives of the programme are to:
                                                        •   increase indigenous peasants’ incomes through the promotion and support of
                                                            agricultural and non-agricultural income-generating activities;
                                                        •   promote and strengthen peasant organizations so that they function as effective
                                                            local institutions;
                                                        •   empower peasant women and guarantee their full participation in the programme’s
                                                            social and economic activities;
                                                        •   improve and preserve the natural resource base for future generations by imple-
                                                            menting sustainable conservation practices; and
                                                        •   foster the integration of rural communities into the mainstream of the national economy.



     GUINEA                                             The goal of this ten-year IFAD-initiated programme is to improve the incomes and
     Programme for Participatory Rural Development in   living conditions of poor rural households in the Haute-Guinée region and achieve
     Haute-Guinée                                       sustainable development to be managed by the beneficiaries themselves. The
                                                        immediate objectives of the programme are to:
                                                        •   strengthen the capacity of grass-roots institutions to initiate and manage their own
                                                            development, with strong emphasis on women, who will constitute 50% of the
                                                            beneficiaries;
                                                        • establish viable rural financial institutions along the lines of financial service
                                                            associations;
                                                        • improve the on- and off-farm income-earning potential of poor households; and
                                                        • strengthen the regional monitoring and evaluation system for rural development.
                                                        The programme partly covers three prefectures of Haute-Guinée, one of the country’s
                                                        poorest regions. The target population is comprised of approximately 320 000 people
                                                        (34 000 households), situated in about 400 villages. There is a wide disparity between
                                                        the income of the region and the rest of the country; female literacy is about 20%,
                                                        undernourishment is endemic, and malaria is the main cause of death. Programme
                                                        interventions involve 200 of the poorest villages in the area, accounting for approxi-
                                                        mately 17 000 households. The programme’s focus on women will help in their
                                                        empowerment and in the effective management of household and external resources.




90
Innovative Features:                                                                            Loan Amount:
• General decentralization policies are increasingly empowering regional administra-             . million (approximately  . million)
    tions and district assemblies at the local level, and this project focuses strongly         on highly concessional terms.
    on this aspect. The implementing agencies for the different interventions, includ-          Total Project Costs:
    ing NGOs and private-sector organizations, will be represented on the project’s             Estimated at  . million, of which a grant of
    governing bodies or will become partners in implementation. Public-sector admin-               will be provided by ,  . million
    istrators will not be allowed to be directly involved in infrastructure construction        will be provided by the Government,    by
    and service delivery.                                                                       the beneficiaries and    by local s.
                                                                                                Cooperating Institution:
• The public sector will be strongly encouraged to support and facilitate develop-
                                                                                                .
    ment. It will also be encouraged to participate in the formulation of project pol-
    icies via the creation of new and innovative incentives. The project will also actively
    promote the formation of socio-professional groups, train farmers, and further
    pass authority to relevant groups and communities. In addition, more emphasis
    will be placed on facilitation to make empowerment and devolution worthwhile.
• Financial and technical resources provided by the project will be transferred to tar-
    geted communities and groups, on a demand-driven, participatory basis. This par-
    ticipatory approach will facilitate the implementation and sustainability of rural devel-
    opment in the upper-east region. At the same time, greater flexibility and gender
    considerations are being systematically mainstreamed into each component.




The target group is comprised of poor rural families whose income level is lower than           Loan Amount:
USD 1.3 per capita per day, the poverty benchmark. The programme will directly bene-             . million (approximately  . million)
fit approximately 16 000 rural families – mainly composed of landless and marginal              on intermediate terms.
producers; subsistence producers; and emergent commercial producers.                            Total Programme Costs:
                                                                                                Estimated at  . million, of which  . million
Innovative Features:                                                                            will be provided by the  Fund,  . million
• A key feature of this programme is its use of the FLM. The adoption of the FLM                by the Government and  . million by the
    allows greater flexibility in resource allocation, planning and implementation. During       beneficiaries.
    the fourth year, this mechanism calls for a revision of implementation, based on            Cooperating Institution:
    pre-set targeted indicators. The proposed revision will be submitted to IFAD’s              .
    Executive Board, and Board members will then decide whether to continue the
    programme. The FLM will also enable the programme to respond adequately and
    in a timely manner to new priorities arising both from the evolving socio-economic
    situation in the country and from beneficiary demands, while at the same time con-
    tributing to the successful accomplishment of long-term development objectives.
• The programme’s highly participatory and gender-sensitive approach used during
    its design phase will be maintained throughout implementation.




Innovative Features:                                                                            Loan Amount:
• The programme applies a participatory approach and maintains a strategic focus                 . million (approximately  . million)
    on women.                                                                                   on highly concessional terms.
                                                                                                Total programme costs:
• Village stakeholders are being empowered to manage their own development and
    to take an increasingly leading role in decision-making and programme manage-               Estimated at  . million, of which  . million
                                                                                                will be provided by the Government and  . million
    ment activities.
                                                                                                by the beneficiaries.
• The programme also utilizes the FLM as well as an approach to programming and                 Cooperating institution:
    implementation based on demand among village stakeholders.                                  .
• In addition, implementation activities are being contracted out under tripartite contracts.
• A coordination mechanism has been established, in the form of an observatoire.
The programme closely cooperates with the Village Communities Support Project,
which was jointly developed by the World Bank and IFAD in 1998.




                                                                                                                                                          91
     HONDURAS                                          Within the framework of the government-initiated Sustainable Rural Development
     National Fund for Sustainable Rural Development   Programme, which forms part of the National Master Reconstruction Plan for
     Project (FONADERS)                                Honduras, this six-year IFAD-initiated project aims to support rural development and
                                                       reconstruction in the aftermath of Hurricane Mitch. The overall objectives of the pro-
                                                       ject are to bring about sustainable increases in agricultural and livestock produc-
                                                       tion and in food security; ensure the adoption of sustainable practices in natural
                                                       resource use and management; and repair the damage caused by Hurricane Mitch.
                                                       Specifically, the project seeks to:
                                                       •    develop local capacity in the areas of information, knowledge, technology, access
                                                            to markets and financing, infrastructure and other production services; and
                                                       • establish a fund for cofinancing technical assistance services, community invest-
                                                            ments in productive infrastructure and sustainable natural resource management,
                                                            and for financing profitable small-scale productive activities.
                                                       Although FONADERS is part of a programme with national coverage, project activi-
                                                       ties focus on 81 municipalities grouped in seven clusters. Over 90% of the population
                                                       in the project area is rural. The total target population consists of 111 000 families
                                                       in 850 hamlets, covering the poorest and most marginalized municipalities. Other
                                                       families will benefit indirectly from investments in small infrastructure projects and




     INDIA                                             In spite of the significant amount of resources allocated to the development of tribal
     Bihar-Madhya Pradesh Tribal Development           people, who are among the poorest in India and constitute 40% of the displaced pop-
     Programme                                         ulation, benefits have not trickled down to them and their living conditions have not
                                                       improved. The overall objective of this eight-year IFAD-initiated programme, which will
                                                       be directly supervised by the Fund, is to promote a replicable model that ensures
                                                       household food security, livelihood opportunities and an improved overall quality
                                                       of life for tribal people, based on sustainable and equitable use of natural resources.
                                                       Specific objectives are to:
                                                       •   empower tribal grass-roots associations and users’ groups to plan, implement
                                                           and manage their own development activities;
                                                       • promote activities that generate sustainable increases in production and produc-
                                                           tivity of land and water resources;
                                                       • generate alternate sources of income outside agriculture, particularly for the land-
                                                           less; and
                                                       • improve the quality of life and income of marginal groups through sustainable nat-
                                                           ural resources management.
                                                       The principal beneficiaries are tribal households in two of the three states with the
                                                       highest proportion of tribal population, namely, Bihar and Madhya Pradesh. Special



     JORDAN                                            The principal objectives of this six-year IFAD-initiated project are to improve the food
     Yarmouk Agricultural Resources Development        security and incomes of target group farmers by arresting degradation and restor-
     Project                                           ing soil fertility, thus allowing for sustainable use of land and water resources.
                                                       Specifically the project seeks to:
                                                       •   provide technical and financial support to the target group to adopt soil and water
                                                           conservation measures and improve agricultural production;
                                                       • promote and fund credit for on- and off-farm enterprises; and
                                                       • strengthen the capacity of the agricultural directorates in the project area to pro-
                                                           vide the required technical support services and extension.
                                                       The target group encompasses the entire population of the selected priority areas,
                                                       where poorer farmers are in the majority. The project expects to have a positive impact
                                                       on the income and quality of life of 2 480 households. The beneficiaries of soil and
                                                       water conservation measures will be about 2 625 households, of which 2 495 will
                                                       benefit through direct project support and 460 through credit. The spring protection/
                                                       rehabilitation programme will benefit about 214 households. Income-generating pro-
                                                       grammes will assist about 800 women to develop small-scale business enterprises.
                                                       Further groups of households (estimated at about 2 490 and 5 460, respectively) will
                                                       receive direct benefits from credit and technology transfer programmes.




92
reconstruction of facilities damaged by Hurricane Mitch, including, for example, the        Loan Amount:
repair/replacement of small bridges and access roads. All actions are oriented towards       . million (approximately  . million) on
gender-balance, assuring women heads of households and household members equal              highly concessional terms.
opportunities in accessing project services and benefits and in decision-making com-         Total Project Costs:
mittees established by the project. In fact, at least 30% of rural development fund         Estimated at  . million, of which  . million
financing is expected to benefit women.                                                       will be provided by ,  . million by the
                                                                                            Central American Bank of Economic Integration,
Innovative Features:                                                                           by the Government and  . million by
• This project will use an explicit mechanism for targeting the poorest and more            the beneficiaries.
    marginalized areas and communities. This targeting mechanism will be grounded           Cooperating Institution:
    in the baseline study, which classifies the various groups of poor in the project       .
    area.
• A needs assessment survey, conducted among the target groups, will help for-
    mulate local microprojects that are adapted to their different needs.
• Mechanisms are also in place to address gender and ethnic inequities within com-
    munities and families and to ensure true participation by beneficiaries/organiza-
    tions – at all levels of planning and project execution – and to encourage benefi-
    ciaries to participate in overall project monitoring/evaluation. The SOF grant, in
    support of the project’s preparatory activities, will be crucial in this regard.




attention is being paid to marginal households and to groups that are in the process        Loan Amount:
of being marginalized, such as women, the landless, hill cultivators and tribal groups       . million (approximately  . million)
that have been classified as primitive by the Government. Approximately 74 000              on highly concessional terms.
households (270 000 people) are expected to benefit.                                         Total Programme Costs:
                                                                                            Estimated at  . million, of which  . million
Innovative Features:                                                                        will be provided by the Department of International
• The programme proposes to strengthen the role of community-based organiza-                Development (United Kingdom),  . million by
    tions by formalizing them and by increasing their capacity to plan and execute          the Government and  . million by the beneficiaries.
    development activities. The programme is highly process-oriented and flexible,          Cooperating Institution:
    and it emphasizes the empowerment of beneficiary groups and their active par-           The programme will be supervised directly by .
    ticipation in self-development. Towards this goal, the programme will introduce the
    concept of autonomous tribal development societies within each state. This
    approach is designed to promote professionalism and accountability in programme
    management.
• Laws affecting tribal populations will also be studied. To support this study, a legal
    defence fund will be established to cover any costs that may be incurred in defend-
    ing the rights of tribal households.
• A holistic approach to natural resources management also plays an integral part
    in the programme. The programme will introduce, for the first time, watershed
    management as part of its overall approach to the protection/management of nat-
    ural resources.


Innovative Features:                                                                        Loan Amount:
• The project will encourage a participatory approach to the management and con-             . million (approximately  . million)
    servation of soil and water resources in order to ensure sustainable agricultural       on intermediate terms.
    production. The approach is designed to empower the poor by providing them              Total Project Costs:
    with access to productive resources and directly involving them in the decision-        Estimated at  . million, of which  . million
    making process.                                                                         will be provided by ,  . million by the 
                                                                                            Fund,  . million by the Abu Dhabi Fund for
• Soil and water-conservation initiatives will be based on a sustainable land-use plan      Agricultural and Economic Development,  . mil-
    prepared with the participation and approval of the communities, by consensus.          lion by the Government and  . million by the
• User groups will, in fact, play an important role in the setting of all priorities; the   beneficiaries.
    project will finance only those initiatives proposed as priorities by these user        Cooperating Institution:
    groups. Beneficiaries will be encouraged to form user groups, participate in design      .
    and implementation, contribute at least 15% of the costs and make a commit-
    ment regarding future maintenance of the works. The line of credit for the income-
    generating enterprises, which will be managed by NGOs on a pilot basis, has
    been designed to facilitate access by the rural poor, especially women, who may
    not have land as collateral.




                                                                                                                                                       93
     MAURITIUS                                     In Mauritius, the poor live in deprived rural and peri-urban areas and have limited educa-
     Rural Diversification Programme                tional and vocational skills. Furthermore, their opportunities for generating incomes through
                                                   self-employment are restricted. They are the targeted beneficiaries of this six-year IFAD-
                                                   initiated programme. The programme is designed to improve the technical, organiza-
                                                   tional and managerial capacity of the poor. Specifically, the programme aims to:
                                                   •   enable beneficiaries to diversify and expand household incomes derived from agri-
                                                       culture, fishing, microenterprises and self-help community initiatives.
                                                   Programme activities concentrate on the relatively deprived and neglected northern and
                                                   eastern regions of Mauritius and on the island of Rodrigues, where rural poverty is wide-
                                                   spread. Beneficiary participation will be secured by involving them actively in the design,
                                                   planning and implementation of all activities, and a gender-impact assessment will be
                                                   conducted to solidify the programme’s gender focus. The programme will benefit approx-
                                                   imately 15 180 households, of which about 4 580 are direct beneficiaries, consisting of
                                                   1 160 small farmers, 1 220 artisanal fishermen and 2 200 microentrepreneurs.




     MOZAMBIQUE                                    The goal of this seven-year IFAD-initiated project is to increase the participation of
     PAMA Support Project                          smallholder producers in the market economy on more favourable terms, with a
                                                   view to increasing agricultural income and improving food security at both the national
                                                   and local level. At the national level, the project seeks to:
                                                   •    support the development of the policy, institutional and legal framework for
                                                        enhanced smallholder market linkages; and
                                                   • serve as a catalyst for the start-up of new smallholder agricultural production
                                                        projects.
                                                   At the local level, the objectives are to:
                                                   • respond to specific constraints faced by targeted smallholder producers in access-
                                                        ing markets; and
                                                   • identify opportunities available to alleviate them.
                                                   The main beneficiaries are the smallholder farmers who sell their agricultural produce
                                                   on the market, those who buy food in periods of deficit and those who currently have
                                                   no market access. Beneficiaries encompass a broad cross-section of the smallholder
                                                   population, or family sector. Especially vulnerable groups are included, such as house-
                                                   holds headed by women and families with limited labour availability and/or little access
                                                   to technical, financial and social support services.




     NICARAGUA                                     This 12-year programme, initiated by IDA, the Swiss Development Cooperation and
     Technical Assistance Fund Programme for the   IFAD, was developed in parallel with and as part of the broader World Bank-supported
     Departments of León, Chinandega and Managua   Agricultural Technology and Training Programme. It covers five regions of Nicaragua.
                                                   The main objective of the programme is to improve the productive and marketing
                                                   capacity of rural small and medium-scale producers and entrepreneurs in order to
                                                   improve the income and living conditions of their families. The programme’s specific
                                                   objective is to:
                                                   •    ensure that small-scale farmers and rural entrepreneurs have access to sustain-
                                                        able technical assistance services, based on a competitive supply of services and
                                                        in accordance with beneficiary-identified needs.
                                                   The programme will be implemented in three phases, in accordance with the FLM,
                                                   and is under the overall responsibility of the Ministry of Agriculture and Forestry. It will
                                                   contribute to counteracting the devastating effects of Hurricane Mitch and to support-
                                                   ing the Government in its objective to modernize the agricultural sector, which is still
                                                   a mainstay of the economy. It is estimated that 15 000 farm families will benefit from
                                                   different forms of technical assistance, and 30-40% of the requests for assistance are
                                                   expected to come from households headed by women.




94
Innovative Features:                                                                        Loan Amount:
• The programme will seek to bring about a new orientation for rural investments in          . million (approximately  . million)
    Mauritius. Wherever possible, the major initiatives will be taken by the rural groups   on intermediate terms.
    and poor households themselves, and the Government will play a supportive and           Total Programme Costs:
    catalytic role rather than acting as a top-down decision-maker.                         Estimated at  . million, of which  . million
                                                                                            will be provided by the Government,   
• Programme activities will be PRA-led and beneficiary owned.                                by national financial intermediaries and   
• Qualified private-sector operators and NGOs, both local and international, will help       by the beneficiaries.
    facilitate targeting, group mobilization and programme implementation.                  Cooperating Institution:
• Community development activities and microfinance will provide a complemen-               .
    tary platform for transfering financial resources and investments for productive
    purposes to the rural poor.
• Specific emphasis will be placed on promoting entrepreneurship and business
    activities by rural women, in collaboration with the Ministry of Women, Family
    Welfare and Child Development.
• WUAs will be trained and encouraged to be responsible for water use and opera-
    tion and maintenance of the facilities and, possibly, input supply and marketing
    functions.
• The programme will support fisheries using Fish Aggregating Devices (FADs) and
    will introduce an element of joint management wherein the fishermen themselves
    will contribute to FAD/O&M and will have a voice in decisions about annual fish-
    ing and FAD management plans.




Innovative Features:                                                                        Loan Amount:
• The focus on development of linkages between smallholder producers and mar-                . million (approximately  . million)
    kets is a relatively new area of involvement for both IFAD and the Government. It       on highly concessional terms.
    reflects a recognition by both parties that these linkages represent the most import-    Total Project Costs:
    ant area for intervention if smallholder incomes and food security are to be            Estimated at  . million, of which  . million
    improved in Mozambique. It also reaffirms the fact that Government has a key            will be provided by the Government.
    role to play in the development of these linkages.                                      Cooperating Institution:
                                                                                            .
• The separate definition of PAMA and the supporting project is another innovative
    approach. The project will establish the policy, institutional and financing frame-
    work in the medium-term and, at the same time, provide a means of making tan-
    gible progress in addressing current market constraints. It is thus both process-
    oriented and activity-based.
• The project enables a wide range of stakeholders to discuss market-development-
    related issues of common interest. Such dialogue should establish an atmosphere
    of trust and mutual respect and should promote the development of effective,
    mutually beneficial policies, strategies and interventions.
• Large elements of project implementation will be contracted to service providers.
    This course of action will build upon experiences gained and lessons learned under
    ongoing projects. It will also allow the Government to concentrate on pursuing its
    core functions without having to become involved in the implementation of activ-
    ities best left to other economic actors.



Innovative Features:                                                                        Loan Amount:
Experience has shown that technical assistance can contribute to the solution of pro-        . million (approximately  . million)
duction and marketing problems only if the services rendered are responsive to the          on highly concessional terms.
needs identified by the clients themselves. It has also shown that technical assistance      Total Programme Costs:
services are more efficient if conceived within a market perspective in which suppliers      Estimated at  . million, of which a grant of
of technology and organizations demanding services are able to purchase the ser-               will be provided by ,  . million will
vices according to market rules, establishing prices to be paid as well as contractual      be provided by ,    by the Swiss
obligations for both parties. To ensure that these criteria are met in the programme,       Development Cooperation,  . million by the
the following features are in place:                                                        Government and  . million by the beneficiaries.
                                                                                            Cooperating Institution:
•   Small- and medium-scale farmers are encouraged to participate in decision-              .
    making at all stages. Programme beneficiaries identify their needs and their ser-
    vice requirements, select their preferred service providers, stipulate a contract
    defining outputs and results and effect payment only upon satisfactory comple-
    tion of this contract.
•   Joint investments (by service providers and clients) are actively promoted, enabling
    the risks inherent in the introduction of new technologies to be shared; and
•   A foundation has been created in which public and private-sector institutions jointly
    manage public funds to promote demand-driven services in research and agricul-
    tural extension.



                                                                                                                                                      95
     NIGERIA                                          This eight-year IFAD-initiated programme will serve as a testing ground for an IFAD
     Roots and Tubers Expansion Programme             commodity-based approach for poverty alleviation. It builds on the encouraging
                                                      achievements of the previous IFAD-supported Cassava Multiplication Programme
                                                      (CMP). That programme contributed to a two-fold increase in cassava production in
                                                      less than eight years and enhanced the potential role of cassava and other root crops
                                                      in raising the country’s food self-sufficiency level. The overall objectives of this new
                                                      programme are to enhance national food self-sufficiency and improve rural food
                                                      security and the incomes of poor farmers. The project seeks to:
                                                      • increase production of cassava, yam and Irish potatoes;
                                                      • adopt improved processing technology;
                                                      • offer education about adequate storage methods; and
                                                      • increase support/education in marketing activities.
                                                      About 3.2 million farming households are estimated to be in the roots and tubers-
                                                      growing belt.
                                                      The principal target group for this programme is comprised of smallholders, generally
                                                      with less than 2 ha of land per household. These smallholders have been selected
                                                      from 18 of the southern and middle-belt states. The poorest segment has less-than-
                                                      average household size, limited labour, no access to fertilizer or credit – with resultant




     REPUBLIC OF MOLDOVA                              The overall goal of this five-year IFAD-initiated project, the first IFAD intervention in the
     Rural Finance and Small Enterprise Development   country, is to contribute to poverty alleviation and the improvement of household
     Project                                          food security in rural areas during the transition to a well-structured free-market
                                                      economy. To help achieve this goal, initial project objectives are to:
                                                      •    facilitate the participation of the rural poor in the commercialization of agricultural
                                                           and rural development; and
                                                      • contribute to the establishment of a responsive institutional framework for rural
                                                           services delivery.
                                                      The project’s initial post-privatization support builds upon the substantial foundation
                                                      laid by support from other donors and is consistent with and supportive of a cohe-
                                                      sive microfinance strategy for the country. Overall investment is geared towards help-
                                                      ing build up economic and commercial activity among private landholders in the rural
                                                      areas targeted for intervention. Private farmers, most of whom organize production
                                                      on an extended family or small-group basis, constitute the backbone of agricultural
                                                      production and will form the new economic base of the Republic of Moldova’s 1 600
                                                      villages. The potential target beneficiaries comprise an estimated 41 500 private, poor
                                                      farm households (including 1 500 small and family entrepreneurs).




     SENEGAL                                          This 12-year World Bank-initiated project will promote decentralized rural develop-
     National Rural Infrastructure Project            ment and strengthen local governance. The long-term goal is to empower local com-
                                                      munities and their representative local governments to plan and manage their own
                                                      development programmes and to mobilize the necessary resources. The project
                                                      seeks to:
                                                      •   increase resources for rural development;
                                                      •   improve the adequacy of basic rural infrastructures for the priority needs of rural
                                                          populations;
                                                      • reduce the unit cost of providing rural infrastructures; and
                                                      • enhance transparency and accountability.
                                                      The project is designed to ensure the proper representation of vulnerable and/or mar-
                                                      ginalized groups (youth, women, castes and refugees) in the identification, design and
                                                      implementation of community projects. It will be implemented in three phases: initi-
                                                      ation, expansion and graduation. During the initiation phase, the project will test and
                                                      establish mechanisms for decentralized planning and decision-making, as well as
                                                      approaches to strengthen the capacity of local communities and their local govern-
                                                      ments to manage and maintain the investments undertaken. Based on this experi-
                                                      ence, during the second phase, it will expand to cover most of the rural communities




96
low crop yields – no marketable surplus and a strong dependence on low-income,                     Loan Amount:
off-farm activities for economic survival. Women in particular will benefit from pro-               . million (approximately  . million)
gramme activities, as they traditionally undertake the processing of cassava. It is                on highly concessional terms.
expected that 560 000 farm households will benefit from increased incomes.                          Total Programme Costs:
                                                                                                   Estimated at  . million, of which  . million
Innovative Features:                                                                               will be provided by the federal Government,
Using the experience gained in the preceding Cassava Multiplication Programme, the                  . million by the state Government and
programme will:                                                                                       by the beneficiaries.
•   expand the scope of IFAD interventions to support the production of other suit-                Cooperating Institution:
    able roots and tubers in addition to those mentioned above;                                    .
•   use the existing extension system to provide farmers with information relating to
    on-farm, off-farm and conservation-oriented technologies, while at the same time
    exploring alternative approaches (for example, community-based) to disseminat-
    ing this information;
•   emphasize poverty-oriented packages, including measures to maintain soil fertility
    for smallholders facing land and labour constraints; and
•   combine the proposed loan with other financial resources to encourage partner-
    ships between government agencies and civil-society organizations (NGOs and
    community-based organizations specializing in agricultural training for farmers and
    food processing), with a view towards long-term sustainability.




Innovative Features:                                                                               Loan Amount:
The project will help establish financial systems and institutions that can, in turn, stimu-        . million (approximately  . million)
late private-sector initiative in the agricultural sector; this sector, in particular, is strug-   on highly concessional terms.
gling to adjust to a changed economic and political environment. The proposed inter-               Total Project Costs:
ventions respond to the priority given to promoting commercialization in agricultural              Estimated at  . million, of which  . million
and rural development in the Republic of Moldova. The project seeks to:                            will be provided by the Citizens Network for Foreign
                                                                                                   Affairs from ,    by the Government
•   develop a synergy among funding sources through the combined use of grant                      and    by the beneficiaries.
    aid, IFAD loan funds and beneficiary contributions in support of small-scale com-              Cooperating Institution:
    mercial enterprises financed under the proposed small-scale enterprise develop-                .
    ment fund (SEDF);
•   support the establishment of a deposit insurance scheme to promote savings
    mobilization by the savings and credit associations (SCAs) in rural areas and to
    assist them in becoming sustainable rural financial institutions;
•   perform a brokerage role at the local level, on behalf of project area clients, to link
    them with relevant rural services, while simultaneously enhancing access (through
    the SCA and SEDF credit lines) to the means to invest; and
•   contract specialized technical services on behalf of village-based, self-help organ-
    izations and the enterprises that receive SEDF support.



in the country, while continuing to monitor and adjust project approaches and strat-               Loan Amount:
egies. The final phase will consolidate the achievements made under the previous                    . million (approximately  . million)
two phases, with emphasis on sustainability and efficiency of the decentralized rural              on highly concessional terms.
development process.                                                                               Total Project Costs:
                                                                                                   Estimated at  . million, of which  . million
Innovative Features:                                                                               will be provided by ,  . million by the
• For the first time in Senegal, IFAD has participated at the national level in the def-            Government and  . million by the beneficiaries.
    inition of government policy towards decentralized rural development and in the                Cooperating institution:
    design of this project, the policy’s main implementation instrument, in partnership            .
    with the World Bank. The focus on decentralization and working through per-
    manent local government within a national policy framework is new for IFAD in
    Africa.
• The project presents IFAD with an opportunity to link, within its country portfolio,
    rural policy, rural infrastructure and support to income-generating activities. This
    project will be the chief instrument for policy reform and funding community-based
    investments. It will support local governments, while ongoing operations will focus
    more on supporting income generation and village-level organizations.




                                                                                                                                                              97
     SUDAN                                            The State of Kordofan, like the rest of the Sahelian Sudan zone, suffered from the
     North Kordofan Rural Development Project         increasing frequency and severity of drought that occurred from 1970 to 1996. This
                                                      seven-year IFAD-initiated project, to be directly supervised by the Fund, covers Bara
                                                      and Um Ruwaba, two of the State’s four provinces. The goal of the project is to ensure
                                                      that the communities in Bara and Um Ruwaba have assured food security, an
                                                      enhanced resilience to drought and expanded income-generating opportunities.
                                                      Specifically, the project is designed to:
                                                      •   enhance the productivity and income of individual farmers, villagers and groups
                                                          from crop and livestock production and from non-farm enterprises through tar-
                                                          geted technical, logistical and financial services and commercial/extension sup-
                                                          port;
                                                      • provide village communities with the capability to plan, execute and manage devel-
                                                          opment schemes through training and on-the-job experience and by providing
                                                          the technical or professional assistance initially required;
                                                      • establish, at the rural council and province level, the institutional capability to assist
                                                          communities in the development process, while, at the same time, emphasizing
                                                          cost-effectiveness; and
                                                      • foster communal natural resource management to support increased but sustain-
                                                          able levels of production through changes in policy and agreements implemented
                                                          at the rural council and village levels.
                                                      An important feature of the project will be the provision of financial services through
                                                      the sanduq system, a traditional participatory savings and credit fund. The principal
                                                      advantages of such a fund are the low cost of servicing, repayment pressure internal-
                                                      ized in the social system, and the possibility of its use by illiterate villagers.
                                                      Ease of access to markets and reduced isolation from economic opportunities will
                                                      result once the Obeid-Bara road has been constructed, with financing from IsDB. This
                                                      will be of great benefit to the vast majority of the population in the project area – rural
                                                      dwellers who are, for the most part, small-scale farmers, livestock herders and farm
                                                      labourers.




     TANZANIA, UNITED REPUBLIC OF                     Building on the lessons of the Smallholder Development Project for Marginal Areas
     Participatory Irrigation Development Programme   and the positive experience gained through its participatory irrigation component, the
                                                      overall goal of this six-year IFAD-initiated programme is to improve smallholder incomes
                                                      and household food security on a sustainable basis. Its purpose is to enhance the
                                                      institutional, organizational and technical ability of farmers, the private sector, NGOs,
                                                      civil-society organizations and government institutions to develop smallholder irri-
                                                      gation throughout the marginal areas of the country’s central plateau, which is com-
                                                      prised of parts of the dry zones of six regions. To achieve these objectives, the pro-
                                                      gramme will:
                                                      •    increase the availability/reliability of water through improved low-cost water con-
                                                           trol systems;
                                                      • raise agricultural productivity by providing improved agricultural extension services
                                                           responsive to farmers’ needs;
                                                      • improve the capacity of stakeholders (farmers, private-sector service providers
                                                           and the Government) to construct, operate and maintain simple, low-cost
                                                           schemes efficiently and sustainably;
                                                      • build institutional capacity to enhance smallholder irrigation-development poten-
                                                           tial throughout the programme area; and
                                                      • construct rural access roads to facilitate marketing of farm inputs and outputs.
                                                      The target group consists of smallholder farm families, all of whom rely on paddy as
                                                      their major source of income. Approximately 11 400 families will benefit directly. Within
                                                      this target group, resource-poor farmers, women and women-headed households are
                                                      particularly targeted through specific interventions. The programme gives special atten-
                                                      tion to women, due to their important role in agriculture, and will facilitate their access
                                                      to services, represent their specific concerns in local institutions and enable them to
                                                      benefit from programme activities in an equitable manner.




98
About 90% of the population (118 000 households), including nomadic pastoralists,              Loan Amount:
constitutes the target group. Women, who traditionally participate fully in all farming         . million (approximately  . million)
and livestock production activities, will be encouraged to participate in all project activ-   on highly concessional terms.
ities and to choose women representatives to local administrative bodies. Project              Total Project Costs:
activities focus on villages where the basic needs of the inhabitants are not being met        Estimated at  . million, of which  . million
and where there is interest in participating in self-help programmes. By the sixth year        will be provided by the s,  . million by the
of the project, it is expected that 320 villages (an estimated 67 000 families) will become    Government and  . million by the beneficiaries.
primary beneficiaries. Of this number, about 25% (17 600 households) are expected              Cooperating Institution:
to participate in all project interventions.                                                   The project will be supervised directly by .
Innovative Features:
• The project has been formulated and appraised through a strong consultative and
    participatory process. Central Government, line departments, state ministries,
    provincial administrations and local council staff (as well as NGOs, beneficiary
    communities and individual stakeholders) have been involved throughout. This
    highly participatory process will continue during implementation.
• This is one of the first state-based projects in The Sudan. Its effectiveness will be
    enhanced by: a high degree of beneficiary participation and responsibility; flexibil-
    ity of contingent funding; optimal use of existing knowledge, resources and expert-
    ise, including the labour and skills of local people; further development of systems
    of small farmer group credit, still in the early stage of development in the country;
    and training, orientation, advice and follow-up support to bolster community-group
    and local authority capabilities.
• Local councils and their cadres will be among the principal recipients of resources,
    training and expertise. Personal skills will be dramatically increased as individuals
    learn how to better plan and manage revenue-raising systems; as a group, they
    will benefit from local-area economic growth and enhancement of the self-reliance
    of the community organizations themselves.




Innovative Features:                                                                           Loan amount:
The programme employs a participatory, beneficiary-demand-driven and private-sector              . million (approximately  . million)
approach and, in doing so, will profit from the use of mechanisms piloted in the SDPMA          on highly concessional terms.
and other IFAD-supported projects. These include:                                              Total Programme Costs:
                                                                                               Estimated at  . million, of which  . million
•   ensuring that programme activities are PRA-led and beneficiary-owned;                       will be provided by ,    by Ireland,
•   ensuring that qualified and experienced private-sector operators and NGOs help              . million by the Government and    by
    build capacity at the district grass-roots level to implement participatory small-         the beneficiaries.
    holder irrigation development;                                                             Cooperating Institution:
•   supporting the establishment of village-based savings and credit associations              .
    (SACCOs);
•   training the WUAs to be responsible for water management and scheme opera-
    tion and maintenance, and raising beneficiary ownership and the sustainability of
    irrigation schemes;
•   placing specific emphasis on the participation of women in WUAs and SACCOs;
    encouraging adequate provision of plots within irrigation schemes for households
    headed by women; and facilitating specific activities of women by providing shal-
    low wells (for micro-irrigation of vegetables and domestic water supply) and labour-
    saving/produce-storage equipment; and
•   ensuring flexibility in programme design so that, during implementation, the pro-
    gramme is able to respond to the emerging strategies of the new policy environ-
    ment of privatization and decentralization, as well as to newly developed institu-
    tional procedures at the district level.




                                                                                                                                                         99
      UGANDA                                            This six-year IFAD-initiated programme is designed to increase incomes among poor
      Area-Based Agricultural Modernization Programme   rural households in south-western Uganda through the stimulation of economic
                                                        activity and through contributions to the modernization of smallholder agriculture.
                                                        It will consolidate the achievements made under the closed Southwest Region
                                                        Agricultural Rehabilitation Project, which was financed under the Special Programme
                                                        for Sub-Saharan African Countries Affected by Drought and Desertification. Specifically,
                                                        the programme seeks to:
                                                        •   increase the involvement of the private sector in further commercialization of small-
                                                            holder agriculture;
                                                        • help economically active smallholders organize themselves so that they can gain
                                                            better access to rural services (technical, financial and marketing);
                                                        • improve rural infrastructure (especially community access road networks); and
                                                        • increase the public sector’s ability to respond to production needs identified by
                                                            rural households.
                                                        The programme covers ten districts with a total population of approximately 5.26 million
                                                        people. Over 90% of the area’s inhabitants are rural, with smallholders constituting
                                                        the overwhelming majority of the population. The target group is comprised of eco-
                                                        nomically active smallholders who derive their livelihood from agricultural production,
                                                        as well as existing or potential small-scale entrepreneurs and business associations
                                                        that provide services to these rural households. Within the target group, women play
                                                        a major role in crop and livestock production, processing and small enterprise opera-
                                                        tions. It is estimated that over 1.6 million people will directly benefit from the pro-
                                                        gramme intervention.



      VIET NAM                                          In spite of the remarkable economic success achieved over the last decade, Viet Nam
      Ha Tinh Rural Development Project                 is still one of the poorest countries in the world, with half its population classified as
                                                        poor. Within this context, the primary objective of the proposed six-year IFAD-initiated
                                                        project is to improve the incomes and living standards of poor households in the
                                                        coastal province of Ha Tinh in north-central Viet Nam and increase their participa-
                                                        tion in the development process.
                                                        Associated benefits will be improved food security and general well-being for all the
                                                        target group, reduced isolation and improved market access. To achieve these object-
                                                        ives, the project seeks to:
                                                        •    establish a microfinance programme that provides access to credit for a range of
                                                             financially rewarding small enterprises;
                                                        • improve the physical infrastructure of the project area;
                                                        • improve technical support services; and
                                                        • encourage beneficiary participation in the selection of activities to be undertaken,
                                                             in providing/monitoring feedback to enable ongoing adjustment and improvement,
                                                             and in taking responsibility for the managerial aspects of the project.
                                                        Farm sizes in Ha Tinh are very small, averaging 0.3 ha per household, and agricul-
                                                        tural productivity is low. Approximately 36% of the population of 1.3 million live below
                                                        the poverty line, and both poor and very poor households face considerable food
                                                        insecurity. Project activities are targeted to areas where concentrations of poverty are
                                                        the highest. Initially, 137 of the 262 communes in the eight poorer rural districts are
                                                        targeted, and infrastructure activities will be implemented in the 48 poorest com-
                                                        munes. The project is expected to have a significant positive impact on women.
                                                        Interventions aim for a marked improvement in household food security. Women’s
                                                        access to production technology will be increased through their inclusion in farmer
                                                        training and field demonstrations and through the formation of women’s savings and
                                                        credit groups with the support of the Viet Nam Women’s Union.




100
Innovative Features:                                                                       Loan Amount:
Programme design differs from those of earlier IFAD investments in Uganda in a              . million (approximately  . million)
number of key ways:                                                                        on highly concessional terms.
                                                                                           Total Programme Costs:
•   the programme adopts a flexible programme approach and the design introduces            Estimated at  . million, of which  . million
    a series of processes and procedures so that districts can access funds for devel-     will be provided by the Government and  . million
    opment and identify broad categories for investment;                                   by the beneficiaries.
• funds will flow to the districts and, eventually, to the subcounty level as condi-       Cooperating Institution:
    tional grant “pools”, under the control of the District Council, to finance eligible   .
    programmes and activities identified by interest groups and/or communities and
    included in the annual work programme and budget; and
• the programme will promote links for the supply of services between smallholder
    farmers and their economic interest groups within the private sector.
The programme has strong links to IFAD’s corporate thrusts and to the regional lend-
ing strategy for Eastern and Southern Africa, with its focus on linking smallholders to
private-sector suppliers of goods and services, mobilizing smallholders to resolve their
problems with investments that they themselves can maintain, and supporting the
decentralization of government service-provision and collaboration with other donors
on programme financing (for example, AfDB).




Innovative Features:                                                                       Loan amount:
The following features are new in the context of IFAD-supported projects in Viet Nam:       . million (approximately  . million)
                                                                                           on highly concessional terms.
•   development of a self-reliant model for an area development project that is based      Total project costs:
    on decentralization of decision-making and control of funds to the technical           Estimated at  . million, of which    will
    departments, accountability of project implementing agencies to the project’s          be provided by the private sector,  . million by the
    clientele, and reliance on national management and technical expertise;                Government and  . million by the beneficiaries.
•   adoption of a process approach to ensure that project activities are not pre-          Cooperating institution:
    identified before commencement of the project but reflect the priorities of the com-     .
    munities as identified through annual participatory planning exercises;
•   provision of a community development fund, which allows communities to finance
    small-scale infrastructures;
•   provision of a development initiative fund, which provides the flexibility to direct
    additional resources to the areas of highest priority, as expressed by the com-
    munities, and to the best-performing components;
•   introduction of a farmer-led extension service based on farmer field schools, rather
    than re-establishment of paid, government, commune-level extension workers,
    which is not sustainable given the provincial Government’s budgetary constraints;
•   collaboration with ongoing IFAD-supported projects in terms of provision of tech-
    nical assistance for project management and participatory development;
•   introduction of a commune-level revolving credit fund as a sustainable mechanism
    to promote savings and credit activities; and
•   participation of independent national advisors and representatives of NGOs in the
    Project Steering Committee and in the Project Microcredit Development Board as
    quality-control mechanisms.




                                                                                                                                                       101
      YEMEN                                            Despite the remarkable growth in national income since 1970, Yemen is still afflicted
      Al-Mahara Rural Development Project              by endemic poverty, which is especially severe in rural areas. Rural households in
                                                       Al-Mahara Governorate, one of Yemen’s most impoverished areas, are particularly dis-
                                                       advantaged due to its remoteness and inaccessibility. The overall goal of this pro-
                                                       posed seven-year IFAD-initiated project is to improve the well-being of participating
                                                       smallholder households and rural communities through more productive and sus-
                                                       tainable use of the natural resources at their disposal. The project objectives are to:
                                                       •    support the development of more self-reliant communities and strengthen part-
                                                            nerships among all stakeholders in the economic development of Al-Mahara;
                                                       • strengthen the capacity of men and women farmers and fishermen and their com-
                                                            munities, particularly disadvantaged groups, to determine, access and use appro-
                                                            priate resources, technology and financial services for agriculture, fisheries and
                                                            livestock development; and
                                                       • build knowledge and capacity in public and private institutions and enterprises to
                                                            deliver equitable, sustainable and profitable financial and technical services to the
                                                            rural community.
                                                       It is estimated that 82-95% of the 15 000 households live below the poverty line.
                                                       Dependent on fisheries and livestock; only a few are engaged in cropping activities.
                                                       About 6 750 households will benefit from the project and, of these, over 1 400 house-
                                                       holds will receive multiple fishery and agricultural production services. In addition, a
                                                       number of households in some 40 communities will have access to social services.
                                                       Women will benefit directly through improved livestock husbandry, community devel-
                                                       opment centres, a better water supply and credit for income-generating activities.




      ZAMBIA                                           Many of Zambia’s poorest rural people live in close association with the country’s
      Forest Resource Management Project               extensive areas of natural forest. Increasing population pressure is already contribut-
                                                       ing to the decline in the forest resource base. Without the adoption of a sound nat-
                                                       ural resource management system, this process will eventually lead to falling incomes
                                                       and increasingly insecure food supply for these communities. The main objectives of
                                                       this six-year IFAD-initiated project are to increase the incomes and food security of
                                                       poor people in the forest-dwelling communities in north-western and Luapula
                                                       provinces. Specifically, this project will:
                                                       •   develop institutions and systems for the management and preservation of forest
                                                           areas through communal or joint management arrangements;
                                                       •   assist existing and emerging producers and groups to develop sustainable
                                                           income-generating activities through improved harvesting, processing and mar-
                                                           keting of forest products; and
                                                       •   improve the living conditions of forest-dwelling communities by reducing their
                                                           social and economic isolation through upgrading social infrastructure and local
                                                           access roads.



      ZAMBIA                                           In the absence of well-functioning markets, the majority of Zambia’s smallholders have
      Smallholder Enterprise and Marketing Programme   few opportunities to produce anything other than traditional subsistence crops with
                                                       minimal inputs; they are thus locked into a vicious circle of low income and food insec-
                                                       urity. This seven-year investment programme, to be directly supervised by the Fund,
                                                       aims to create new opportunities for linking smallholders with input and output
                                                       markets. A series of interrelated initiatives are designed to:
                                                       •    develop and strengthen smallholder enterprise groups and associations and build
                                                            capacity in local institutions to be progressively able to provide such services;
                                                       • promote a range of market linkage initiatives that capitalize on the synergies pos-
                                                            sible between the smallholder and the market intermediary;
                                                       • develop new and complementary agricultural market opportunities and support
                                                            the associated diversification in smallholder production;
                                                       • improve rural road access through funding rehabilitation, developing maintenance
                                                            capacity and training of local contractors; and
                                                       • facilitate a positive policy/legislative environment for smallholder/private-sector
                                                            market linkages.
                                                       The target group consists of smallholders who live below the poverty line in the more
                                                       densely populated parts of the country and have the potential to produce marketable
                                                       surpluses. It is difficult to estimate the number of smallholders that will become involved
                                                       in the programme, as they will be self-selected, and the precise location and mix of
                                                       different interventions will be determined by participatory planning in focal areas.
                                                       However, it is estimated that some 30 000 households will be involved in the group


102
Innovative Features:                                                                            Loan Amount:
• The project will nurture participation in development by five groups: local commu-              . million (approximately  . million)
    nities, women, NGOs, cooperative societies and the private sector. It will also con-        on highly concessional terms.
    tinue to develop approaches to community development through “social agree-                 Total Project Costs:
    ments” negotiated with local communities.                                                   Estimated at  . million, of which   
                                                                                                will be provided by ,  . million by the
• Project investments will be conditional on communities’ support of the process of
                                                                                                Government,    by the Cooperative and
    poverty alleviation and gender equity. At the same time, the project will initiate a
                                                                                                Agricultural Credit Bank and  . million by the
    community empowerment process, providing the community with skills for the                  beneficiaries.
    market economy and using the positive aspects of cooperation whenever pos-
                                                                                                Cooperating Institution:
    sible. The role of women will also be further reinforced by ensuring that they are
                                                                                                .
    recruited as community para-veterinarians and community extension agents, thus
    strengthening their role in society.
• Local NGOs are in their infancy, but some are serious and show promise in pro-
    viding services to the community. The project will strengthen NGOs by improving
    their managerial capabilities. It will also explore the possibility of using some NGOs
    to deliver village-based financial services, with the help of more experienced local
    and international NGOs. This measure will help strengthen the development of
    civil society in the area. The project will also seek to rehabilitate the reputation of
    cooperative societies (long tarnished by the policies of the previous regime) as
    providers of economic services to their members.
• There is a growing and vibrant private sector in Yemen, which has, until now, not
    been active in Al-Mahara in view of its isolation and low level of development. The
    project will encourage private investors bold enough to invest in fish marketing,
    since fishing is the most important economic activity in the area.




It is expected that about 40 000 households (approximately 200 000 people) could                Loan Amount::
benefit from the project. Direct assistance will be given to more than 13 000 produ-             . million (approximately  . million)
cers to develop sustainable income-generating activities based on forest products.              on highly concessional terms.
                                                                                                Total Project Costs:
Innovative Features:                                                                            Estimated at  . million, of which  . million
• The principal implementers will be NGOs and private-sector entities under con-                will be provided by the German Development Service,
    tract with the Government. The small Project Facilitation Unit (PFU) will generate             by Ireland,    by the
    and manage these contracts, ensuring that complementary activities function                 Government and    by the beneficiaries.
    smoothly together. The PFU will be a supernumerary and temporary arm of the                 Cooperating Institution:
    Ministry of Environment and Natural Resources, whose sole purpose will be car-              .
    rying out the agreed-upon activities.
• The project has a clear “exit route” for all interventions; support to each “working
    area” will be limited to three years. This will ensure that authentic institutions are
    created and developed at the village level, without need for perpetual subsidy.
    Improvements in the capacity of the Government and NGOs will be long-lasting,
    providing support to community management structures and producer groups.




                                                                                                Loan Amount:
formation and strengthening, with some 50 000-60 000 households, or 250 000-
                                                                                                 . million (approximately  . million) on
300 000 people, benefiting directly from the broader initiatives such as road improve-           highly concessional terms.
ment and other market-linkage mechanisms.
                                                                                                Total Programme Costs:
Innovative Features:                                                                            Estimated at  . million, of which  . million
• The focus on the development of linkages between smallholder producers and                    will be provided by the Government and   
    markets is largely a new area of involvement for both IFAD and the Government.              by s and market intermediaries.
    It reflects their recognition that this is the most important area for intervention if      Cooperating Institution:
    smallholder incomes and food security are to be improved.                                   The programme will be supervised directly by .
• While bringing farmers together in groups and associations is certainly not new,
    developing smallholder group enterprises along sound business lines is. If suc-
    cessful, this could be a major factor in transforming Zambian agriculture, facilitat-
    ing many other market initiatives.
• Outsourcing of large elements of programme implementation to contracted organ-
    izations will be a new approach for the Government; indeed, it is relatively new for
    IFAD. However, it will build upon experiences gained and lessons already learned
    under ongoing projects, permitting the Government to concentrate on its core func-
    tions and avoid direct involvement in activities better undertaken by the private sector.
• The application of programme investment to two flexible funds is a flexible and
    robust way of managing a diverse range of activities in a rapidly changing envir-
    onment, where there is a need to be able to respond to initiatives by other donor-
    funded programmes and changes in market signals.



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