Aid to rural poor needs to focus on growth, not charity, U.N. report says

November 24, 1992|By Ian Johnson | Ian Johnson,New York Bureau

UNITED NATIONS -- With the world's rural poor now numbering nearly 1 billion, a new United Nations study calls on governments and agencies to stop treating them as objects of charity and to start viewing them as sources of economic growth.

The report, drawn up by the U.N. International Fund for Agricultural Development (IFAD), says the rural poor are often ignored by their own governments and international aid agencies. Aid donors often prefer big projects and government-to-government transfers that do little to help the rural poor, who attract attention only when they die in famines, it says.

"The poor themselves have a tremendous productive potential that is not being put to use. We should stop looking at the poor as objects of aid and take them for what they are: exceptional producers in extremely difficult circumstances," IFAD President Idriss Jazairy said.

Mr. Jazairy, who will retire in January after eight years at his post, said he wanted the 500-page "The State of the World: Rural Poverty" to be his "swan song," summing up the fund's 14 years of aiding small farmers.

With 100 staff members at its Rome headquarters and 10 percent of its annual $400 million budget going to administrative costs, Mr. Jazairy said, IFAD was itself already beginning to carry out his recommendations for lean, targeted aid programs.

The report's main point is that the poor, although they work, do not earn enough to stay above the poverty line.

Nearly 40 percent of rural residents in poor countries are poor, resulting in the 15 million to 20 million annual deaths attributed to starvation or malnourishment, it says.

Ending poverty means targeting programs that will raise the poor's earning ability, the report says, and if that was done, the usual development dichotomy between fighting poverty and economic growth would end because fighting poverty would itself increase growth.

Special emphasis is given to women, who are becoming impoverished almost twice as rapidly as men but who rarely show up in government economic statistics. They are the key to avoiding famines, since in places such as Africa they account for 70 percent to 80 percent of food production and work 16- to 18-hour days.

If their labor productivity could be raised 15 percent to 20 percent, the report says, hunger in Africa could be brought under control. That goal would not be too difficult to achieve, it says, since women often spend hours each day simply fetching water and fuel.

The IFAD report is not binding on other U.N. agencies but is the most comprehensive attempt to define a new trend in aid work.

The report's authors hope that making Third World farming profitable would stem the flood of migrants to the developing world's overcrowded cities, where jobs are scarce and more costly to create than in rural areas.

Aid to the rural poor also saves money, Mr. Jazairy said, because small, targeted loans for poor farmers, fishermen and herders are more likely to be paid off than loans to governments. In many IFAD projects, loan repayment rates are close to 100 percent, he said.

That is because the rural poor have virtually no source for the kinds of small loans that could buy such things as fishing nets or water pumps. Money can usually be borrowed only from loan sharks, whose rates make an 8 percent bank loan seem cheap.

It might cost more to get the money to remote areas and evaluate small projects, the reports says, but that can be compensated for by the excellent repayment rates and the willingness of the recipients to pay interest rates that are slightly higher than average, Mr. Jazairy said.

An example of a successful project is Djibouti, a small country on the horn of Africa. IFAD lent 180 fishermen $100,000 to buy more modern boats and engines, allowing them to increase their harvests from 190 tons in 1979 to 900 tons last year. Fish is now being exported, and the loans are being paid off.

The report also has strong political implications for the dictatorships and autocracies that rule many poor countries.

Although the report argues mostly on economic grounds, its support for participation by the poor in decision-making is clearly aimed at the political elite, who, it says, develop aid projects that sometimes aid only themselves.

The trend toward small-scale aid that the poor themselves help devise is gaining momentum, said Christine Fowles, director of programs for eastern, central and southern Africa for the Africa Development Foundation in Washington.

"Many large agencies would like to do this sort of small-scale development but are not able to because of their mandates," said Ms. Fowles, whose agency was established by Congress eight years ago to organize small projects.

That does not exonerate the developed countries from their responsibility, however, Mr. Jazairy said. Agricultural subsidies and import controls in Europe and the United States, for example, make it hard for Third World farmers to export their crops, while cuts in aid threaten many viable projects, he said.

"We are not asking for donations but investment. We are appealing to the rich countries' enlightened self-interest to help fight this problem. It clearly is winnable," he said.

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