In an increasingly unpredictable global economy, investments in the socio-economic transformation of rural areas are fundamental to a more stable and prosperous world.
That’s the message that Alvaro Lario, President of the International Fund for Agricultural Development (IFAD) will take to the 80th UN General Assembly in New York, challenging the international community to consider these investments in their approach to global security, said IFAD on Friday.
“Global stability and security take root when we unlock a path to a brighter future for rural people and deliver quality of life and job opportunities,” said Lario, who leads the only International Financial Institution focusing exclusively on rural development.
Rural areas are home to 80 per cent of the world’s poorest people.
Investing in rural communities and agrifood systems strengthens food security, expands economic opportunity, and builds resilience to climate change for more than 3 billion people living in rural areas of developing countries.
Investments in rural transformation have shown impressive returns. An IFAD investment in Senegal has already enabled 10,000 young women and men choose to return to rural areas as they now earn up to seven times the national minimum wage.
Ambitious partnerships and development finance
As development aid currently declines, countries seek out sustainable financing sources to continue their development. Development finance provides a viable alternative source.
"The present and future of development finance lies in smart and effective partnerships that align public goals with incentives that attract private investors,” said Lario.
IFAD is deepening its efforts to bring together public resources and private funds, and rural people, while small-scale food producers in their capacities as entrepreneurs and business owners.
Through innovative financing tools that incentivize investment, IFAD has shown how to make rural development both investable and transformative.
IFADs’ Private Sector Financing Programme has mobilized US$165 million in co-financing, nearly half from private investors.
IFAD will also participate in the discussions to reform the UN, a “healthy exercise to ensure focus, delivery and impact,” according to the Fund. With one of the lowest cost structures among international financial institutions, IFAD has been leading the way to enhance its effectiveness, efficiency, and organizational agility.
The latest reform of the Fund has saved US$5.5 million through decentralization and cut project design and disbursement times by nearly half, among others.