How can International Financial Institutions invest to “build back better”? – World
BY DONAL BROWN, CHRISTINE CICCONE, SAHEED ADEGBITE
Even before the recent COVID-19 pandemic, the world was witnessing a slowdown in the reduction of extreme poverty and an increase in food insecurity. Last year, there were as many as 811 million food insecure people in the world. Climate change and extreme weather events have been important drivers of these trends, and are likely to become even more so. According to the World Bank, four in five people living below the international poverty line live in rural areas.
Around the world, the pandemic has had a devastating effect on economies and has plunged millions of people back into extreme poverty and hunger. And given the already high levels of poverty and vulnerability faced by small rural producers, these issues have particularly affected them and their families. So what should be the priorities of organizations, like IFAD, in the years to come?
Donal Brown, Associate Vice President, Program Management Department
The IFIs will need to spend the next few years helping developing countries and the populations of those countries recover from these shocks. The challenge will be to use this as an opportunity to shift the development trajectory towards a more sustainable and inclusive one, while embracing new disruptive and transformative technologies that can really make a difference for the rural poor. For example, for IFAD, the pandemic has proven to be an opportunity to introduce and expand access to digital information platforms, whether for extension, market information or other needs. of information.
IFAD is bringing to the table its unique goal of helping poor rural people increase their incomes and improve their food and nutrition security. Above all, it will be necessary to help them build their resilience to shocks.
Typically, our approach is to help households adopt more productive farming practices, diversify their production systems, and broaden their income base beyond agriculture. We place great importance on adaptation to climate change for small producers – over the next three years, 40% of our investments will go to climate finance. In a unique initiative, we are working with FAO and WFP to help six countries in the Sahel region respond to challenges related to COVID-19, conflict and climate change. We are starting to take a food systems approach to our programs, seeking to add value and create jobs along agricultural value chains, from input supply to food retailers. And the crisis caused by COVID-19 has made us understand how digital technologies – information based on cellphones – can revolutionize the way poor farmers receive and use information to improve their livelihoods and build resilience to them. shocks; That is why we are now working with a range of partners to expand the range of digital services and their reach, and tailor them to the local needs of poor rural households.
Christine Ciccone, Special Advisor on the Food Systems Summit
How to better invest for the transformation of food systems? We need to do this through the prism of what can be done that will bring the most direct benefit to small farmers and rural producers, and those most at risk of being left behind.
To transform ourselves, we need to invest in solutions that offer the most opportunities for increased inclusion. Women, youth and indigenous peoples stand to benefit directly from new activities and investments. If they are not included in the solutions, the solutions will not be of the transformative nature that we aspire to. That is why IFAD is working to amplify the voices and ideas of its key target groups throughout the Food Systems Summit.
There are two key areas in which we have the opportunity to invest that could empower a wide range of rural smallholder farmers equally, including those who have not always been direct beneficiaries.
The first area is finance. Access to finance is essential for individuals to grow their businesses. This is even more important for those who want to build their resilience to protect their businesses and increase their income over the long term.
The second is technology. The advantages of technology, especially digital, can provide instant access to essential information at all stages of building and running a business.
Imagine the possibilities if we combined the use of digital with access to finance. Now imagine the possibilities if we were to share these combined tools with people who are most often left behind and who remain an untapped resource. This is especially true in the agricultural sector, where we know that economic growth is two to three times more effective in reducing poverty and food security than growth across other sectors. Investing in new financial and technological solutions for the world’s poorest working in rural areas has the potential to be absolutely transformative.
Saheed Adegbite, Director of the Office of Strategic Budgeting
The IFIs are challenged to assess how to rebuild taking into account the social and economic changes caused by the pandemic. Organizations themselves should focus on efficient use of resources, innovation and simplification of governance structures.
For the use of resources, there is a need to rethink and rebalance both the distribution of direct operational and programmatic administrative costs as well as the distribution among various categories of expenditure, such as travel, staff and advisory services. For many organizations, this means focusing on improving KPIs. The spread of new working conditions is a good opportunity to review administrative costs and mobilize more field staff and other resources where they are needed most for the most impact.
In terms of innovation, in recent years IFAD has invested in technologies that support administration, finance, planning, human resources and other systems. Until now, they have been aimed at optimizing the effectiveness and efficiency of companies to combat administrative bureaucracy. The innovation most needed today is not to support better administrative management but direct action on the ground. Innovative technologies that support the agricultural value chain and “innovation incubators” to develop new scalable and sustainable ideas.
Finally, this reconstruction phase also involves a critical review of the governance system and its simplification. COVID-19 has shown that even the most important decisions can be made remotely, saving money with less environmental impact. Overall, there has been no significant negative impact on engagement with donors, Member States and partners. Where there has been the greatest negative impact is the ability to reach those we serve most, the millions of marginalized people in remote rural areas who are most affected by the economic devastation of COVID-19 . This should be the target of new investments. To reach the millions who remain food insecure.