Breaking the pattern of poverty
An interview with Fawzi Al-Sultan, President of the UN agency, The International Fund for Agricultural Development, in which he explains the importance of full participation, empowerment and training, in addition to microcredit, in equipping poor communities for productive, self-sustaining economic futures.
It is the only UN agency with a specific mandate to help the world's rural poor: created in 1977 IFAD, the International Fund for Agricultural Development, helps the landless poor, subsistence farmers, artisans, fishermen, and pastoralists to become economically self-sufficient. The Fund's projects are designed to increase food production, improve nutrition and alleviate poverty. Since its inception, IFAD has invested a total of $4,500 million in more than 400 projects worldwide. IFAD's work has helped to create more than 3.5 million jobs, and increase food production by 40 million tons annually, enough to feed 260 million people.
Fawzi Al-Sultan has been President of IFAD since 1993. Share International's US editor Monte Leach spoke with him at the Microcredit Summit in Washington DC.
Monte Leach: What lessons have you learned in the course of your work with IFAD that you have found to be most valuable in terms of helping the poor?
Fawzi Al-Sultan: One lesson we are learning is that we have to start with the beneficiaries themselves as full participants in the projects - full participation, full ownership, from the very beginning - and give them control of the resources. Otherwise, these projects will not be sustainable. In fact, it is only when we have the community participating from the beginning, in the design and implementation of the projects, that we get something which works quite well.
ML: How does the community make its needs known to groups like IFAD and others?
AS: When we're first designing a project, the important thing is to bring together traditional groups in the community. There might be co-operatives in some areas, or groups that meet around particular kinds of handicrafts. We sit down with those groups and find out what their needs are. They can tell us if they do not have training, or adequate machinery. I have seen this in a number of countries. The people are doing extremely good work, but many of the tools they are working with are mechanical and very old. It takes them a lot of time to produce something, which may not be of very good quality. They know what they want to do, they're doing it, and they have the skills. But they want to move one step higher so that they can improve their skills, improve the types of equipment they have, to produce different types of handicrafts and move to a higher level of income.
"I want clean drinking water"
ML: Microcredit, providing small loans and training to the poor, is one approach that IFAD and others have found successful in the alleviation of poverty. But obviously that is not enough. There are many groups around the world making a difference in helping the poor, but it seems that poverty is still so pervasive. Could you look at the bigger picture and discuss what it would take to make a powerful impact on poverty?
AS: If you ask a poor woman or man what they want, the first thing they say is: "I want clean drinking water." They talk about issues of health, and also about education for their children. If a person can't read, they can't do anything. And you begin to realize that you must have an integrated approach. A number of elements must be in place before you can give microcredit.
Using this example of the handicrafts group, they may be producing handicrafts now, but require more training on new equipment, new patterns, as well as much better access to markets. And teaching them how to produce what will actually sell in the market, rather than just creating something and saying: "I want to try to sell this product". All this is done as part of microcredit. Microcredit by itself might not work, particularly in situations where there are no skills or social services. But with the two together, it works.
In some cases the poor have small plots of land, but often are landless. How do you work with them? Again, you need to develop a joint approach where they work on the land to boost productivity so that they can produce at least some food to eat. At the same time you work on off-farm activities, which include everything from raising chickens, to obtaining a cow for milk, to creating handicrafts, and other activities. These two approaches together allow the families to move out of poverty.
ML: The two approaches being microcredit and social services?
AS: We would say it's an integrated approach, also including training, the introduction of new methods of agriculture, and extension services. We are continuously working with farmers to increase productivity. If a woman has four or five cows, for example, what happens if a cow is sick? There are no services. The next thing you know, she has lost her five cows and cannot repay her loan. These services have to go together.
We have a project in Bosnia where we are lending cows to women, and they repay with calves. But the key thing is, that can't be done unless there are centers where they have access to veterinarians, so if the cow is sick they can preserve their investment. If you don't include that, plus some training as to how you know a cow is sick, then the project cannot become sustainable. You simply can't give something, whether it's money or a cow, and expect everything to work out. You have to work with the people involved. This is the important thing, whether you are giving credit in kind or credit in funds. To make it work, you must have an integrated approach.
ML: It sounds like a daunting task. Different elements are needed in individual circumstances. Is that the case in your experience with IFAD?
AS: One example is a village in the northern part of Mexico where the women were producing some income through their work. But what do you think they were spending it on? The kids, because the kids were sick all the time. Why? Because their drinking water was so bad. That was their first priority: "If you give me clean drinking water, my children will be well, and will stay in school. I can afford to do something." Even though you have not introduced microcredit, simply giving them clean water makes a big difference in the structure of the family.
ML: And that also gets back to asking those who are poor what they want.
AS: That's the first priority. "Free up my time so that I can do something, and then by all means train me to do something." In this particular village, a number of women were able to open a small restaurant on the highway that caters to the truckers passing by. But the kids were in school, and the women began sharing in the work - one goes to clean, one goes to grow the vegetables, one takes care of the chickens - and some could be home some of the time if they wished. But you started with what they first needed in the village to free up that time.
Transfer of resources
ML: IFAD's programs have been very successful in helping the rural poor get out of poverty. But what will it take to make a big difference in getting this integrated approach accomplished?
AS: A lot more of the aid money has to be focused on social development - basically health and education - as well as infrastructure. And you also have to target your approach. Previously this was not done. You just did a project in the country, expecting the benefits to trickle-down to the poor. What we're seeing now is that you have to target your resources to the poorest. You give them whatever they need in terms of social services and infrastructure. Microcredit works once you have that in place.
ML: Do you think that targeting more foreign assistance toward the poor, specifically in social development, will make a very big difference?
ML: Can we see that happening in any way around the world?
AS: International conferences can make a big difference. We bring these issues up, and hope to convince those who attend from different aid agencies to target more of their resources to the poor. But you are also faced with the other side of the story, where donor resources are going down.
ML: Given that donor resources are being reduced, does it look hopeful to you right now internationally?
AS: I think there's a lot we can do, not only with donor resources, but also with beneficiary resources as well. You just have to shift your strategies. Developing countries, and the people themselves, have a lot of capacity. I think you can get the resources to make a difference.
ML: The basic philosophy of our magazine is that we need to share the food and resources of the world more equitably among all people, because the developed world uses a disproportionate share. You said developing countries have a lot of resources to bring to bear, but if there was a more equitable distribution, wouldn't that help enormously?
AS: The donor countries have to be a lot more generous with resources. The transfer of resources has to go to the poorest, in the form of either very cheap loans or grants which they can use to subsidize initial development of many of these enterprises which can then become self-sustainable. Transfer of resources is the key to all development issues. We need to convince those who are making the appropriations that development does work. But you have to focus on your success stories. Don't keep throwing money at the same projects that you funded before and expect them to work.
ML: And the success stories are on the local level?
AS: Yes, at the grass-roots level.
ML: One last question. The NGOs, nongovernmental organizations, play a major role in this, I believe. Governments take a broader approach, but are not perhaps as good at connecting with individual people at the local level. That's where the NGOs come in. Is that your experience as well?
AS: Yes. A lot of players have to be in the game. Without the governments, communities don't get the investment in the infrastructure and certain kinds of social services. But the government can't provide the nurturing and training that an NGO or community group can - for instance, people who have the commitment to live in the community for a year or two. You will not get that kind of commitment from a government employee. You need to have a good mix of both to make a go of it.
From the June 1997 issue of Share International