By IPS Correspondents
ROME, Jul 21 2000 (IPS)

Focussing on poverty alleviation, the United Nation’s International Fund for Agricultural Development (IFAD) is coming round to the view that development assistance needs to aim at empowerment of the poor.

This, says IFAD spokeswoman Farhana Haque Rahman, calls for tackling those structures that constrain development and cause poverty.

Poverty means powerlessness. If this is so, then it follows that assistance must focus on developing institutions that the poor can use to assert their interests, and to organise access to resources, she adds, explaining the rationale behind a new approach under way at the Fund.

With this in view, IFAD’s Action Plan 2000-2002 considers the assessment and influence of policies and institutions relevant to rural poverty alleviation as a major focus for IFAD’s future activities, says Haque Rahman.

In fact a position paper, co-authored by IFAD’s Assistant President Klemens van de Sand says bluntly: “To achieve this, development assistance will need to be turned upside down.”

He adds: “The bottom line must be the local institutions that empower the poor to take part in defining the rules that determine their lives.”

Yet, local empowerment and the development of institutions of the poor alone will not be suffice. Only when the poor and their interests are represented in institutions at the national level will there be a policy for the poor, warns van de Sand.

The strategically significant shift in focus, that is currently taking place in development co-operation, implies a shift away from conventional project promotion and towards institutional development.

The reasoning behind the new thinking, reflected in van de Sand’s paper, says IFAD spokeswoman Haque Rahman, is that the development co-operation of the last 30 years was all about promoting projects, projects of limited duration with a sectoral or regional focus.

It was claimed that these projects generated broad-based impacts, and were replicable. Yet only in relatively few cases was this claim borne out.

The proclaimed aim of development was asset creation, especially in poverty alleviation. It was not the creation of structures enabling the poor to gain access to resources.

In recent years there has been discussion of how projects might also address the problem of structural constraints to development.

Nevertheless, the attempt to use projects as a lever to change such structures has not proved successful. This is because it has adhered too closely to conventional approaches with limited outreach.

On the other hand, structural adjustment and sector investment programmes did not meet the high expectations placed in them, primarily because they failed to create the necessary institutional structures for policy reforms.

In the context of the extended debt cancellation for the HIPC – highly indebted poor – countries, Poverty Reduction Strategies (PRS) attempt a new approach to structural reforms, designed to eliminate mass poverty.

The motivation, says Haque Rahman, explaining the logic behind IFAD assistant president’s thinking, is that the policy of the Bretton Woods institutions has clearly exposed both the limits of traditional policy at the national and international levels and the need to identify new ways of approaching development.

New approaches are even more necessary if the process of globalisation is taken into consideration, a process that should not be taken as a given fact but rather be influenced.

“This calls for the establishment and interplay of democratic institutions that go beyond national borders. Institutions are therefore of prime significance for continued economic and social development,” says the paper co-authored by van de Sand.

But why are the economic and social opportunities that allow a small proportion of humanity a high standard of living not available to all?

IFAD assistant president argues: As recently as two hundred years ago, the lives of most people around the globe still bore a much closer resemblance to each other: they were usually miserable, laborious and short.

Since then, a spectacular process of economic growth has been unfolding in the western world. In the last 180 years, the Gross National Product world-wide has grown by a factor of fifty, whilst by comparison the global population has expanded by a factor of “only” six.

Yet the distribution of this immense growth in wealth was highly inequitable, both within societies and between them.

At the beginning of the nineteenth century, the ratio of per capita income between the richest and the poorest countries was around three to one.

At the beginning of the twentieth century it was 10 to one. Now, at the beginning of the twenty-first century, it has risen to sixty to one.

Today, one billion people in the industrialised countries amass close to 60 percent of global income, one-and-a-half billion people in the middle-income countries earn 20 percent, and the three-and-a-half billion people in the poor and poorest countries the remaining 20 percent.

Whilst the average GDP is around 6,000 US dollars per capita, the figure for the richest countries is 29,000 US dollars, and for the poorest countries 500 US dollars.

Why this enormous and growing disparity? According to the paper co-authored by van de Sand, one explanation can be found by analysing the institutional resources of a country: they make the process of economic development possible in the first place and, once it has begun, steer it in the right direction.

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