Programme Management Department January 2002

Introduction Regional Overview Rural Poverty IFAD Experience IFAD Strategy The Strategy Formulation Process INTRODUCTION 1 Regional Poverty Assessment Conference in Santiago de Chile and Managua IFAD Framework Latin America and the Caribbean Retreat, Rome, January 2002 Internal IFAD Workshops and Management Review IFAD Governing Council, Rome, February 2002 Seminar in Central America, June 2002 DRAFS STRATEGY FINAL STRATEGY

REGIONAL OVERVIEW 1950s to 1970s: Import Substitution It had a number of weaknesses è Urban bias at the expense of the rural sector è Distorted allocation of resources è Tax exemptions and subsidies created large budget deficits 1980s: Stabilization and Structural Adjustment è “The Lost decade”,GDP’s annual average rate of growth: -1% 1990s: è Modest recovery è Withdrawal of the state created an institutional vacuum è Globalization - greater opportunities but increased in vulnerability è Little progress on poverty reduction 2

è High degree of inequality è Indigenous populations represent the largest group of the rural poor è Rural areas are highly vulnerable to external conditions è Policy and institutional weaknesses è Acute problem of access to land è The region has been a place of experimentation of economic development policies Six main features characterise the Region: REGIONAL OVERVIEW 3

Poverty is a multidimensional phenomena influenced by cultural, social, and economic factors such us: l social and economic exclusion and discrimination linked to ethnicity and gender; l lack of access, or limited access, to services to meet basic needs of rural families (health, education, housing, etc.); and l income levels below the minimum amount needed to obtain the required set of goods and services for the family. 63.7% of the rural population is below the poverty line. RURAL POVERTY 4

Poverty and Extreme Poverty in Rural Areas 5 Source: ECLAC, Social Panorama of Latin America, Table 1 RURAL POVERTY

77 million of rural people living under the poverty line 46 million in extreme poverty 8 to 10 million of rural households are headed by women 30 to 40 million women are partially or totally responsible for agricultural production and rural microenterprises 6 RURAL POVERTY

indigenous communities and groups rural women ethnic minorities Affects small farmers families and landless people of both sexes, vulnerable to changes resulting from structural reform processes, economic crisis, social and political instability, and globalization process Two main types of poverty in rural areas: Structural Transitory 7 RURAL POVERTY - Who are the poor?

There are seven main types of productive and reproductive systems in the Region Andean herder Small farmers Subsistence and landless farmers Rural labourers Small indigenous communities Indigenous peoples from tropical rainforests Small-scale fishermen In absolute terms, the largest group, 33% of the rural poor population of the Region, is made up of rural indigenous communities 8 RURAL POVERTY - Who are the poor?

mountain slopes in subtropical zones and arid and semiarid plateaux; humid and semi-humid tropics; subtropical valleys; and coastal plains. More than 90% of the rural poor population of the Region is concentrated in four major ecological areas: The areas most extensively inhabited by the rural poor are arid and semiarid subtropical regions, which cover a total of more than 9 million Km 2. 32% of the total rural poor population of the Region, lives in this area 9 RURAL POVERTY - Location of Rural Poverty

The main constraints in achieving rural development and the eradication of rural poverty are: l Adverse macroeconomic policies. l Political instability. l Lack of access to assets such as land, water and financial assets. l Poor investment in human and social capital, poor infrastructure and insufficient access and development of support services. l Problems in the management of heterogeneity, gender and ethnic issues. 10 IFAD EXPERIENCE

l Reduction of rural poverty requires policies and programmes that are clearly targeted l Efforts to improve incomes should focus not only on agricultural production but also on generating employment opportunities in rural and urban areas l The rural poor must be effectively involved in the design and planning of rural development projects l The development of small towns and medium-sized cities, and the promotion of economic corridors, create an environment that is conducive to poverty reduction IFAD EXPERIENCE- Lessons learned IFAD stands in a unique position to tackle these constraints. Several lessons can be identified from the evaluation of projects financed by IFAD: 11

Opportunities to reduce rural poverty in the Region l Supporting native and minority ethnic communities l Eliminating gender inequalities in rural areas l Developing and strengthening social capital l Competitiveness and globalization of markets l Development technology for small farmers and small rural businesses l Supplying effective technical assistance services l Innovative local financial services l Microenterprises l Development and regulation of rural labour markets l Access to land and property rights 12

Empowerment of the rural poor Taking advantage of market opportunities Engaging in Policy Dialogue Partnership Cross-fertilization IFAD’s strategy in the Region includes the following elements: Gender Sustainable agricultural production and natural resource use Two cross-cutting themes IFAD STRATEGY 13

Constraints 14 IFAD STRATEGY TAGs: MERCOSUR, FIDAMERICA Projects, supported by TAGs FINCA and SERFIRURAL Projects, supported by TAGs RUTA, SETEDER, PROCASUR, CIARA and CARUTA, PROMER and PREVAL PROGENDER, PRAIA, TAG Camelids Projects and Programmes l Lack of access to assets such as land, water and financial assets l Adverse macroeconomic policies l Problems in the management of heterogeneity, gender and ethnic issues l Poor investment in human and social capital, poor infrastructure and insufficient access and development of support services

OUR CHALLENGE 15 l Programmes, Projects, Grants as integral part of the Strategic Framework. l Create new Products/Instruments for:  Governments;  Grass root level Organization. l Facilitate the link between Knowledge/Processes originating form projects activities with National, Regional and Local Policies. l Handling of the Globalization Process. l IFAD trained Personnel to Manage these Challenges.

a IFAD INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT LATIN AMERICA AND THE CARIBBEAN DIVISION