Transcript Executive Board Informal Seminar Issues raised at the

Executive Board Informal Seminar
IFAD’s engagement with Middle-Income Countries
2nd March 2011
Issues raised at the December Executive
Board
The December Executive Board discussed management’s
paper “IFAD’s engagement with Middle-Income Countries”
Issues raised :
IFAD’s approach to MICs;
Financing Modalities for MICs; and,
Approaches to graduation.
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The need for differentiated services to MICs
• MIC members represent a very heterogeneous group;
• IFAD initiatives are country differentiated not
differentiated by per capita income of country;
• IFAD projects are tailored to the rural poverty and
hunger situation;
• MIC member countries confirm need for continued
IFAD involvement to focus on rural poor;
• Upper income MICs want help to in transition from
receivers of aid to donor status; and,
• Need for menu of options that suits the conditions of
each MIC.
Demand-driven country-based approach
IFAD has a menu of lending and knowledge products,
some of which are being developed:
Financial products and projects;
 Knowledge products and services;
 Policy and advocacy services and products;
Support to national agricultural and rural development
strategies; and,
 South-South cooperation.
All products are of interest to MICs, and to LICs.
Potential new Financial Products and Services
• Currency options;
• Different grace periods, maturities and interest rates;
• Mobilisation of additional external resources.
BUT:
• Need to avoid duplication and seek complementarity
with financing offered by other multilaterals;
• IFAD not become a bank nor issue bonds in the
market.
Graduation
Concerns that ‘classic’ graduation system could lead to a
significant decline or decrease in IFAD’s development
capacity and the achievement of its objectives.
• Current IFAD Graduation policy: a voluntary choice of
the governments to cease borrowing E.G. Algeria &
Macedonia have ‘self-graduated’;
• IFAD needs own threshold definition to launch a
process and a discussion for graduation and on the
nature of the relationship and engagement that IFAD
has with the country;
• IFAD could mobilise non-replenishment funds for
graduation countries.
Development of IFAD threshold
Option 1: Use World Bank threshold (per capita income
above $6995);
Option 2: Create a unique definition for IFAD: Per capita
income supplemented by other factors•
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value added per worker;
crop yields per hectare;
percentage of the population who are undernourished;
the rate of agricultural growth;
changes to agricultural productivity;
the contribution of agriculture to GDP;
employment in agriculture as a percentage of all employment, and,
the percentage of the population who are rural.
Thank you