IFAD Experience and Strategy for Poverty Alleviation in Central and Eastern Europe and the Newly Independent States Seminar on Policies for Achieving the Millennium Development Goals in the ECE Region: Reducing Extreme Income Disparities Geneva 2-3 October 2003

Active Borrowing Countries Albania Armenia Azerbaijan Bosnia & Herzegovina Georgia Moldova Romania The Former Yugoslav Republic of Macedonia Geneva Seminar, 2-3 October 2003

Outline of Presentation Overview of IFAD’s portfolio Lessons Learned as Related to Institutions & Policies Dimensions of Rural Poverty IFAD’s Strategy and Policies Geneva Seminar, 2-3 October 2003

IFAD Portfolio in the CEN Region Approved projects: 17 in 8 countries 11 ongoing and 6 completed Total IFAD investment USD 178 million Total project costs USD 380 million Each of IFAD’s Dollars has generated USD 1.14 from cofinancing New project pipeline ( ): 3 in 3 countries Moldova (2004), Azerbaijan and Armenia (2005) for a total of USD 40 million Geneva Seminar, 2-3 October 2003

Profile of IFAD Portfolio by Country Albania: USD 35 million for 3 projects in irrigation, rural finance and mountain areas development - in addition to cofinancing from ISDB, UNDP, SNV and DFID Armenia: USD 36 million for 3 projects in irrigation and rural finance - in addition to cofinancing from IDA Azerbaijan: USD 18 million for 2 projects in irrigation, rural finance and mountain areas development - in addition to cofinancing from IDA Bosnia & Herzegovina: USD 33 million for 3 projects in rural development, livestock and rural finance in addition to cofinancing to EU, ISDB, IDA and OPEC Fund Geneva Seminar, 2-3 October 2003

IFAD Investment by Country FYR Macedonia: USD 16 million for 2 projects in rural finance and SME development - in addition to cofinancing from SIDA Georgia: USD 14 million for 2 projects in irrigation, rural finance and mountain areas development - in addition to cofinancing from IDA Moldova: USD 8 million for 1 project in rural finance and SME development Romania: USD 16 million for 1 project in rural finance and SME development in mountain areas - in addition to cofinancing from GTZ Geneva Seminar, 2-3 October 2003

Lessons Learned as Related to Institutions & Policies Institutional vacuum for support services to farmers  Policy change is needed to invest in private sector capacity- building Weak rural financial services  Appropriate legal and institutional enabling environment is needed to promote MFI in rural areas Geneva Seminar, 2-3 October 2003

Lessons Learned as Related to Institutions & Policies Unreliable output markets  Market reforms are needed, to enable private sector investment Weak government institutions in policy formulation and regulation  Policy change is needed to use loan funds for institution building Geneva Seminar, 2-3 October 2003

Lessons Learned as Related to Institutions & Policies Transitional economy requires a strong public-private partnership – Policy reform is needed to promote devolution of responsibilities to end-users through local institutions and civil society (such as water users associations for maintenance and management of irrigation infrastructure) – Empowering end-users requires investment in capacity-building Incomplete land reform (inefficient land distribution, inactive land market, slow and complex land registration) – Institutional reforms are needed to encourage land consolidation, speed up registration and simplify land transactions Geneva Seminar, 2-3 October 2003

Dimensions of Rural Poverty: How Many Poor? 4.0 million rural poor live on less than two dollars per day million rural poor live on less than four dollars per day. Geneva Seminar, 2-3 October 2003

Dimensions of Rural Poverty: Qualitative Aspects Income is not an adequate measure of rural poverty in the region. Lack of control over resources. Lack of education and health facilities. Poor water and sanitation. Geneva Seminar, 2-3 September 2003

Dimensions of Rural Poverty: Vulnerable Groups Mountain area communities Rural wage earners Rural women The elderly Ethnic minorities Internally Displaced Peoples (IDPs) and refugees Geneva Seminar, 2-3 October 2003

IFAD Strategy: Strategic Objectives Support the transition with sustainable programmes in agriculture to contribute to rural poverty reduction. Income diversification for the rural poor. Increase competitiveness of small farmers through appropriate grassroots institutional development and policy advice to governments. Rational utilisation of national resources. Geneva Seminar, 2-3 October 2003

IFAD Strategy: Operational Approach Investing in innovative projects and pilot schemes. Targeting the poorest groups with focus on causes of rural poverty. Transferring of management functions to end-user groups. Supporting research and capacity building programmes through grant financing. Leveraging financial resources through partnership with other donors. Geneva Seminar, 2-3October 2003

IFAD Strategy: Opportunities for IFAD and Catalytic Role Institutional development  Capacity building at many levels Market linkages  Facilitate the building of private sector marketing institutions On-farm investments  Capital and technological assets Geneva Seminar, 2-3 October 2003

IFAD Strategy: Opportunities for IFAD and Catalytic Role Non-farm rural economy Community development for sustainable use of common resources. Rural financial institutions  Responsive to the needs of small farmers, rural women and the landless. Geneva Seminar, 2-3 October 2003

IFAD Contacts  A. Slama, PN Division Director, and/or for:  Albania, Armenia and FYR Macedonia  Henning Pedersen, Country Portfolio Manager, IFAD Rome Tel: , Azerbaijan, Georgia and Bosnia & Herzegovina  Abdalla Rahman, Country Portfolio Manager, IFAD Rome Tel: , Romania and Moldova  Pietro Turilli, Country Portfolio Manager, IFAD Rome Tel: , Geneva Seminar, 2-3 October 2003