Reaching the Rural Poor

1. Reaching the Rural Poor A World Bank Strategy for Rural Development

2. Some Global Success in Food Production

3. Broader Success with Agriculture • International price of food decreasing • Caloric intake rising • Percent of undernourished fallen • Rates of return to research projects high • Success rate of World Bank agricultural projects about 70% (OED) • Successful rural development in China, Thailand, Central Europe, parts of Latin America was initial stimulus to their rapid economic growth

4. Why A New Strategy?

5. Challenges Remain and New Challenges Emerging • Persistent rural poverty • Farmers in the world’s poorest countries are still untouched by yield increases • Increased water scarcity, rapid deforestation • Weaker rural physical and social infrastructure • Globalization

6. The Persistence of Rural Poverty 75% of world’s poor live in rural areas and are the most vulnerable to global change.

7. The Crop Yield Gap

8. Water Supply is Less Assured in Rural Areas

9. Rural Education is Weaker Than Urban

10. Deforestation is Rapid

11. Declining Interest by the Bank and by Other Donors • Champions of rural development are weak • Other priorities have been added by governments and donors; developing countries allocate half the public budget to rural areas as they do to urban • Rural development projects often performed poorly in the past • Irrigation, water, forest, fisheries projects are often controversial

12. Bank Lending in Rural Space is not in Accordance with Incidence of Rural Poverty Rural Space Lending as Percentage of Total Bank Lending (FY99-01 average), Contrasted with Rural Poverty Note: EAP poverty estimates are dominated by China data

13. Lending for Agriculture is not Aligned with the Importance of Agriculture Lending to Agriculture as Percentage of Total Lendingin Rural Space (FY99-01 average)

14. The New Strategy Concept

15. Preparation Process • Regional rural development strategies • Review of project experience and analysis • Consultations in client countries, in the Bank, with donors and NGOs • Analysis published in technical documents • Corporate strategy developed through ‘bottom-up’ approach • Detailed implementation plan

16. A Shift in Emphasis • Giving voice to the rural poor • Addressing the entire rural space • Forging alliances of all stakeholders – donors and recipients

17. New Strategic Priorities • Fostering broad-based rural growth, based on: agriculture as the primary source of growth, food, and safety net; and non-farm and private sector economic activity • Improving social well-being, gender equity, managing risk, and reducing vulnerability • Enhancing sustainable management of natural resources

18. Responsibilities of Developing Countries • Avoid excessive taxation of farmers through administrative pricing of outputs, overvalued exchange rates, and excessive agricultural and industrial protection. • Policies and investments needed to create open markets for agricultural products, inputs, and labor, including policies which create a positive climate for private investment in farming and agro-industry. • Policies and investments in agricultural research, extension and education, in collaboration with the private sector and with foreign institutions, to allow greater participation in the knowledge and scientific revolution.

19. Responsibilities of Developing Countries (continued) • Expanded investment in rural infrastructure, rural health, education, energy, telecommunications, finance, in conjunction with local communities and the private sector. • Promotion of producer organizations and trade associations, so that rural people have more responsibility and more say in rural based activities. • Decentralization of some government functions to local government authorities. • Where necessary, improved land administration and land reform.

20. Responsibilities of Developed Countries • Agricultural trade liberalization, to the levels of tariffs and non-tariff barriers which are established for non-agricultural products. • Reduction of agricultural subsidies, which currently depress world prices and expand world agricultural market share held by developed countries. • Expansion of agricultural and rural development assistance to developing countries to the levels characteristic of the early 1990s.

21. Responsibilities of Developed Countries (continued) • A focus on Sub-Saharan Africa is required in international assistance for rural development given the particularly difficult food and agricultural situation which exists there. • Better coordinate aid flows to developing countries. • Support to the transfer of scientific findings of relevance to developing country agriculture.

22. Revised Approach to Agriculture in Developing Countries by governments and donors • Improve food-chain productivity, income generation, competitiveness, and markets • Diversify agriculture and boost high-value products • Renew commitments to science and technology • Encourage more efficient use of farm inputs, reduce post-harvest losses • Promote food safety • Tailor agenda according to the major farm types

23. Recognition of the Importance of Rural Non-Farm Economy and the Private Sector • Improve investment climate for private investment in rural areas, promote labor mobility • Provide agricultural, financial, infrastructural, market and social services in part through the private sector, using market solutions • Promote producer organizations, trade associations, business chambers, and public-private cooperation

24. Developing Rural Infrastructure and Social Assets, and Managing Risks are Essential • Improve access to infrastructure and social services • Improve access to nutrition and health • Increase access to and improving the quality of rural education • Provide assistance in managing household food security • Provide new risk management instruments • Build the capacity of the public and private sectors and civil society to manage their own services

25. A Continued Commitment to Enhancing Sustainable Management of Natural Resources • Environment, forestry and water strategies in the Bank give overall guidelines in approaching rural natural resource management • Elements will include: • Reducing land degradation • Improving water management • Sustainable production of forest products while protecting the environment

26. Strategy Implementation

27. Overall Implementation Thrusts • Raise the profile of rural development in national policy • Scale up innovative and successful investments, while exploring new approaches and innovation • Improve the quality and impact of donor operations • Implement global priorities (e.g. reduce deforestation, water pollution, over-fishing, loss of bio-diversity, soil erosion, adapt to climate change, bring agricultural science to poor countries) • Enhance partnerships between governments, civil society, NGOs, and donor organizations for rural development, including a global forum for rural development

28. Regional Strategies Underpin the Corporate Strategy • Africa emphasizes the institutional foundation for reducing rural poverty, and advocates support for government efforts to decentralize and enhance the participation of rural communities. • East Asia and the Pacific calls for financing programs that directly attack poverty through targeted productivity enhancing investments in very poor areas. • Europe and Central Asia focuses on sustainable rural growth and the completion of the transition process from planned to market economies in the rural areas. • Latin America and the Caribbean region emphasizes rural and urban dynamics and adopts a rural space approach to development built around increased participation of local actors. • Middle East and North Africa places a high priority on rationalizing water management and policies. • South Asia emphasizes enhancing human and social capital development in rural areas, as well as decentralization of decision-making to local communities.

29. Africa East Asia Pacific Europe and Central Asia Middle East North Africa Latin America Caribbean South Asia FY03 Madagascar Nigeria Cameroon Ethiopia Angola Dem. Rep. of Congo Lesotho FY04 Togo Burkina Faso Congo,Dem.Rep. FY03 Russia Turkey Uzbekistan Georgia FY03 Djibouti Yemen FY04 Egypt FY03 Nicaragua Brazil Colombia Mexico FY04 Honduras Peru Panama FY03-04 Afghanistan India: Uttar Pradesh Maharashtra Andhra Pradesh Karnataka Pakistan: Sindh Sri Lanka Bangladesh FY03 Vietnam Philippines Papua New Guinea FY04 Indonesia Provisional Work Program to Support Locally Driven Rural Strategy Formulation for FY03-04

30. Regional Priorities for Early Action in Scaling-up Good Practices and Innovative Approaches (1)

31. Implementation Monitoring Indicators

32. Risks • Unable to give proper voice to the rural poor at national level • Desired multi-sectoral collaboration does not materialize within donor agencies and governments • Instruments available to donors not conducive to rural focus, learning, and innovation • Industrial country tariffs and subsidies continue to hinder developing country access to markets

33. Global Forum for Rural Development

34. A Global Forum for Rural Development Mission: • To contribute to the elimination of rural poverty and the enhanced economic development of rural areas through deepened global, regional and national cooperation and collaboration Principles: • Direct participants – development agencies, donors and IFI • Fosters a range of interlinked formal and informal alliances and activities with stakeholder representatives • Places emphasis on action, flexibility and responsiveness • Light on overheads and bureaucracy

35. A Global Forum for Rural Development Outputs may include: • Raised awareness and advocacy • Sponsored policy and public debate • Increased levels of investment and development funding including increased co-financing • Joint analytical and policy work on challenging issues • Shared lesson learning in good practice and innovation • Authorizing and enabling environment for related alliances • Joint monitoring and evaluation

36. For Further Information and Comment www.worldbank.org/ruralstrategy