|Overcoming Global Hunger (WB)|
|Session three - targeted interventions: what works best to reduce hunger|
I Fawzi AZ-Sultan
This conference truly represents an opportunity to generate the political will to end hunger. I am here to commit IFAD fully to collaborate in that effort Today, more than 1 billion human beings are absolutely poor, most of whom live in rural areas, and three-fifths of whom are women. These groups live with hunger as a constant companion, with the threat of famine looming whenever drought or other adverse events occur. Hunger is not the only international problem, but in human terms it is perhaps the largest, and one that represents a major challenge to hopes for a new period of economic expansion and democratic transformation.
Let me offer a simple observation: rich people do not go hungry The problem of hunger is basically a problem of the inability of a large number of poor people mostly in developing countriesto command access to sufficient food. The question is, how do we improve that access and make it more secure?
For some the challenge is to increase the overall supply of food. For others it is general economic expansion. However, these sorts of macroeconomic developments are difficult to engineer. While the general expansion of employment and increased global food supplies are good objectives, they are bluntand slowinstruments for addressing the specific problem of hunger, because seldom do resources intended for general agricultural or rural development reach the poor and the hungry. The impact on hunger of broad-inrush support for agricultural development has often been disappointing: the poor and hungry still have little access to land, credit, training, or technology. There are also risks of adverse effects on the poor during the transitional periods of adjustment programs. We must make sure that the poor do not fall through the cracks in the matrix of reform.
To combat hunger, therefore, we have to be more direct in our approach. But trying to deal witch hunger as a matter of welfare is simply not financially feasible for most developing eloping countries. IFAD's fifteen years of operational experience in 100 developing countries suggest that the only sustainable response to hunger as a mass phenomenon is to enable smallholder farmers, the landless, and poor rural women to improve their own productive and income-generating capacities Empowering the poor with the resources necessary to pull themselves out of hunger would not only have a direct impact on hunger, it would also contribute to national growth by increasing the supply of food and other crops and widening the market for manufactures. However, resources are scarce, and to make the maximum impact on hunger we have to ensure that our support has an explicit beneficiary orientation and is as carefully targeted as possible to the hungry to minimize leakages to other groups.
In what follows, I will principally be referring to solutions to chronic poverty. However, IFADs work in drought stricken areas shows that the development of more resilient production systems can significantly reduce the impact of natural disasters. Moreover, actions taken during the course of emergency operations can become the seeds of resumed and sustainable development in the future. Working with the World Food.
Programme, example, we have found that food aid provided through targeted food-for-work schemes can be made into a development resource that supplies immediate needs and strengthens future production capacities.
Unfortunately, some misunderstandings about the idea of targeting still exist. Some economic purists believe that targeting represents a misallocation of resources into areas that would not be served under free market conditions because of lower returns. The reality is, however, that in many of the rural areas in which the hungry live and IFAD operates, markets are weak and monopolistic, and sometimes virtually nonexistent. In these circumstances untargeted resources do not necessarily flow to the highest return areas; they tend to flow to the most socially powerful Apart from market failures, there are also significant government failures, including weak government institutions, that fail to reach the poor and respond to the priorities of the socially powerful. A clear orientation toward poor beneficiaries and effective targeting can foster participatory grassroots institutions through which the poor can express their needs and obtain productive services. Rather than creating distortions, targeting can thus help to overcome institutional failures, both in markets and in governments, in their capacity to reach the poor.
The type of targeting I have in mind involves identifying the specific obstacles the hungry face in raising their incomes and food production and seeking to eliminate these constraints in a sustainable way. Naturally this necessitates better identification of who is hungry and at risk. We also require a better understanding of the underlying causes of why people are hungry. This sort of understanding of the who and the why of hunger leads to a positive type of targeting. One example is credit. Targeted credit using group guarantees to replace collateral requirements that builds, where possible, on traditional informal financial institutions, can sharply reduce transaction costs and offer the poor the means to use purchased inputs to improve their productivity. In IFAD projects we have found that the repayment rates of the poor, especially women, are extremely high The poor are bankable.
Another powerful form of targeting is to encourage research to emphasize technologies suitable for smallholder farmers and to develop extension systems that respond to their needs. Yet another is a focus on small-scale water conservation and control methods and on the crops and animals poor farmers raise. Other forms of targeting are also important. Apart from food-for-work schemes, employment guarantee schemes and strengthening health, education, and nutrition services in poorer regions have proved effective. In our view targeting means focusing on issues that are of special and unique concern to the poor, which requires both resources and a willingness to give these issues the necessary priority.
Targeting has to be complemented with eliciting t e full participation of the intended beneficiaries, offering the hungry the means to choose, and to benefit from, the productive services and institutions they need to change their situation. The beneficiaries' involvement in project design and implementation often lowers the costs of implementation and improves the project's sustainability. In the IFAD-supported Niger project, which we are presenting as a case study, for example, the involvement and contributions of the beneficiaries to development work has lowered the cost of irrigated land in the project to less than US$1,800 per hectare, one of the lowest in the country. Access to small-scale irrigation allows the villagers to produce a highly profitable green pepper crop, with significant and lasting increases in their incomes. In the other case study the project in Indonesia, the target group has been offered the means for self-reliant development through a group based credit scheme that has given them access to bank financing As a result the beneficiaries have increased their incomes by as much as 50 percent in three years. Moreover, an institutional structure for poverty alleviation has been forged that is both cost-effective and sustainable, as well as being capable of countrywide replication.
There is now, I believe, enough experience of effective interventions at the microeconomic level and macroeconomic policy adjustment programs to provide the basis for a coherent approach to the challenge of hunger. It is evident that well-conceived macroeconomic and sectoral policies are of critical importance for underpinning the process of development. We are certainly not saying that they should be abandoned: experience shows that targeted hunger projects have the most sustainable results when developed in a supporting macroeconomic and sectoral framework. To overcome hunger what we have to ensure is that the function of targeting the poor is performed, that it is adequately funded, and that it is supported by the right policies and programs at the sectoral and macroeconomic levels.
This does not mean, however, that all development institutions should be doing the same thing. Each has accumulated different experiences and has different comparative advantages. Take the example of macroeconomic policy formulation. While many institutions have sought to claim expertise in macroeconomic policy formulation, it is the Bretton Woods institutions that have the operational experience in and practical responsibility for these issues. What is true of macroeconomic programs is also true of targeted hunger eradication projects. Experience in and responsibility for targeting resources to the poor and hungry do make a difference, and we should recognize and build upon this as we organize our campaign against hunger. I would also say that a comparative advantage and experience should better govern the division of labor among multilateral institutions, it should also affect the way we deal with NGOs. NGOs have a unique capability of leading innovation at the local level. They are the pathfinders who seek out means of getting people to participate and test options without huge investments. Professor Yunus' Grameen Bank in Bangladesh, for instance, is an outstanding example of a local initiative that later could be scaled up into a large, national-level endeavor. We in IFAD are proud that we were among the fist to recognize and give outside support to what Professor Yunus is seeking to do.
The general need for a greater focus on the hungry and more cooperation has often been verbally acknowledged I would like to make a more concrete gesture of intent on the part of IFAD. I am therefore committing IFAD to shifting its resources toward the most direct possible delivery to the poor and hungry To that end, I am working for IFAD to reduce its own costs in the project development cycle by more than 20 percent next year while maintaining the same level of financial commitment to projects and programs for the hungry and poor. We are also seeking stronger collaboration with other development and financial institution-s. During the last decade, the trend in IFAD has been toward a higher and higher percentage of projects initiated by IFAD. This may have been justified for a certain period by the preoccupation of the major international financial institutions with macroeconomic rather than poverty issues. But it is no longer justified. I have instructed my staff to raise significantly the level of collaboration with other multilateral and bilateral development finance institutions in the coming year by every means we can devise.
A proper attack on hunger requires a real partnership to deal with the obstacles the hungry face, principally as producers, for the poor are rarely simply poor, they are poor farmers, poor fishermen, poor herders. And it involves changing our own style. It means reducing the drive by all institutions to seek to address everything, while simultaneously making exaggerated claims to policy uniqueness. It also means moving toward more practical collaboration that really draws on the strengths of each institution.
Talking about targeting and collaboration would not be very useful without referring to the role of the single most important global development institution, the World Bank. The Bank's commitment to resolving the question of hunger will be decisive, and its sponsorship of this conference is a clear reaction of this commitment. The poverty assessments the Bank is undertaking in a number of countries to identify the causes of poverty is a further indication of that commitment. May I express my hope that these assessments can be made a more collaborative exercise from which all of us could benefit.
We also have to reflect upon what sort of commitment to hunger will make the crucial difference. First, I believe that what we should aim for is not the reduction of hunger, but its elimination. This offers a clear target to aim for, a yardstick by which to measure progress during the coming years. Second, and again reflecting the need for risible and quantifiable commitments, I believe that the World Bank and other multilateral financial institutions should consider earmarking specific and adequate resources for targeted attacks on hunger, funds that are large enough materially to reflect the magnitude of the problem. These funds should be available for supporting the projects and programs of institutions that have demonstrated their ability in the area of targeted and sustainable interventions against hunger. Such institution could include IFAD and other development agencies specialized this area, area, well as national institutions, NGOs, and private voluntary organizations.
To remind you of my earlier remark, legitimate universality of concerns does not necessarily imply equal experience in all areas of concern Experience at the macroeconomic level is not easily and immediately translatable into expertise in local-level, targeted operations. This is why our collaboration must emphasize and draw upon the unique capacities of each of us, and must ensure that the materials are available to make the most of them. This collaboration could be developed in at least three different forms. At present, the volume of resources devoted to overcoming hunger is simply too meager compared to the scale of the problem and the number of the hungry. IFAD, for example, can only finance one project every two or three years even in countries where large numbers of people suffer from chronic hunger It would be relatively easy and cost effective to replicate these projects elsewhere in these countries and have two projects a year there instead of one every second year. We all need to use our influence to assure that increased levels of resources are devoted to eliminating hunger.
A second from could involve complementing the sectoral and large scale infrastructure investments financed by the World Bank and other multilateral financial institutions by having other institutions, like my own, undertake components and activities that link these infrastructure investments to initiatives to reach the poor and hungry at the village and grassroots levels. We and the Bank are looking right now at exactly this kind of collaboration in Armenia. Such a collaborative linkage would give World Bank sectoral investments a greater beneficiary orientation, and thus increase their impact on eliminating hunger.
A third form could involve a sort of subcontracting, if I may put it like that, by the World Bank to institutions that have special experience with participatory efforts to alleviate poverty. Interventions in marginal areas with large numbers of poor, scattered beneficiaries need a simpler, more flexible, and more responsive project cycle to deal with the informal associations and organizations of the poor, the NGOs, and other grassroots institutions Approaches that are appropriate for large-scale infrastructure projects may not be cost effective in these areas, and this could provide a strong Logic for a subcontracting type of collaboration.
We have all been receiving signals that business as usual is not enough People are expecting something new and concrete from this conference. I think they want a new and specific focus on the elimination of hunger as a legitimate and separate objective. They want sufficient funds explicitly and separately allocated for this purpose. And they want to see those funds used by those who can use them best for the purpose: "universal" multilaterals, specialized international agencies, NGOs, and national-level institutions, with all of them acting in a mutually supportive fashion.
It is now within our power to satisfy these expectations and make real inroads into hunger, soon. What is needed is the willingness to invest in hunger eradication and to target the hungry, not to the exclusion of everything else, but as part, and an important part, of our regular activities, with quantifiable targets and quantifiable and separate means This conference hall is far from the world the poor and hungry inhabit, but if we show the commitment to launch a process of concrete programs and collaborative actions, we can translate the rhetoric here into meaningful changes in the daily lives of the hundreds of millions of the world's hungry.