Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific

REMARKS

by

He Changchui
Assistant Director-General and
Regional Representative for Asia and the Pacific

Delivered at the

 IFAD Annual Performance Review Workshop

 Bangkok, Thailand
1 March 2009




Mr. Tom Elhaut,
Mr Ennoo Suesuwan, Senior Executive Vice President, BAAC, Thailand,
Mr John Skerrit FTSE, Deputy Chief Executive, ACIAR, Australia,
Colleagues from IFAD and FAO,
Distinguished participants,
Ladies and Gentlemen,

On behalf of the FAO Director-General, Jacques Diouf, and on my own behalf, I wish to thank IFAD for inviting FAO to this important event. It is a great honour for me to be here.

FAO and IFAD play complementary roles in assisting member countries in efforts to defeat poverty and hunger through rural and agricultural development. Our two organizations work closely at the headquarters level in Rome as well as at the country level in different regions. I am happy to note that closer collaboration at the regional level in Asia and the Pacific has been growing over the last several years. These efforts have taken several different forms ranging from technical assistance programmes to capacity building and creating dialogues. The pro-poor policy analysis and the Greater Mekong Sub-regional programme for enhancing agricultural competitiveness are two such programmes. In both cases, we attempt to undertake high-quality policy analysis and implement innovative strategies to promote rural and agricultural development. Furthermore, we are also collaborating with IFAD, along with the Asian Development Bank, in promoting mechanisms to ensure that rural, pro-poor interests and approaches are firmly rooted within national and regional bioenergy and renewable energy in the Greater Mekong Subregion. Our collaboration with IFAD extends further in the region to the Pacific Islands for which we are formulating a regional programme for Food Security and Sustainable Development Programme (FSSLP). I earnestly believe that we will undertake many more collaborative activities together in the future. We are planning to hold a bilateral meeting this Friday to discuss this matter.

I understand that IFAD has organized this workshop to share experiences to further strengthen and enrich the impact of IFAD-assisted development programmes and to broaden understanding of emerging issues. While leaving the first to the experts gathered here, let me share a few thoughts on the latter.

As a region, Asia and the Pacific should be proud of what it has achieved over the last several decades. Thanks to great efforts and sacrifices of millions of people, this region has become more dynamic and shown the potential to be a global economic powerhouse. The economic growth and development this region has achieved during the last forty years is unparalleled in known economic history. Within this period, more than 350 million people have moved out of extreme poverty and the proportion of people living on less than dollar a day in the region fell sharply. The absolute number of poor people has fallen from 1 009 million to 641 million. The proportion of undernourished has declined from 20 to 16 percent within two decades.

These great achievements notwithstanding, greater challenges confront us. While poverty and hunger has been drastically reduced, income inequality has widened. The recent food crisis exposed the vulnerability of the region to changes in global food markets and climatic changes. As a result, the number of hungry people in the world increased by 75 million, of which 41 million were from this region. The world is now estimated to have 963 million undernourished people and nearly two-thirds of them live in Asia. This is likely to be further exacerbated with the projected higher fluctuations of food prices. The poor often spend more than half of their income on food, and they are the most vulnerable group. Small farmers, despite being the food producers, face hunger and malnutrition. This is an irony of our economic structure. High input prices, owing to high oil prices and other market changes, have further squeezed them. Small farmers and landless laborers in rural areas and poor urban dwellers suffer the most severe consequences from high food and input prices.

We are gathering here at a time when the world economy is further dipping into recession. We still do not know where the abyss is. According to the International Labour Organization the global economic crisis is expected to lead to a dramatic increase in unemployment. The timeliness and effectiveness of recovery efforts will determine the level of unemployment. The available estimates suggest that global unemployment in 2009 could increase by a range of 18 to 30 million above that of 2007, and more than 50 million if the situation continues to deteriorate. In China alone some 20 million migrant farmers are estimated to have lost their jobs in the wake of the economic crisis. If the ILO’s worst-case scenario of 50 million people losing their employment turns out to be a reality, some 200 million workers, mostly in developing economies, could be pushed into extreme poverty. Several countries in the region have announced stimulus packages in response to the economic slowdown.

As in many similar crises, the poor and the vulnerable groups are likely to bear the major brunt. Reduced inflows from foreign direct investment, remittances from workers abroad and the earnings from tourism will have far-reaching implications for the achievement of Millennium Development Goals in the region. As in the 1997 Asian economic crisis, a reverse migration from urban to rural areas has started, putting further pressure on fragile rural economies. Finding gainful employment for the additional labour force is a challenge. There is an urgent need to accelerate investment in rural areas to promote income and employment opportunities in the short-run and to create infrastructure to sustain growth in the future. This can help the agriculture and rural sector to cushion the immediate impact of the economic crisis.

While the initiative and commitments for a greater flow of resources to the rural sector has to come from our Member Governments, FAO and IFAD can support this through collection and dissemination of analytical information, advocacy and policy and investment support. There is a risk of reduced allocation to the agriculture sector as revenue collection declines in the wake of the economic slowdown. Thus there is a need for our concerted action to ensure a continued flow of investment into rural areas and agriculture so that those millions who lose their employment in the industrial and services sectors can be absorbed. We need to play a proactive role to ensure that fiscal allocations to agriculture and rural development are not reduced, but rather enhanced, despite the likely budgetary constraints. This task needs to be carried out at all levels: from global to regional to country to the local level. I believe this workshop provides an excellent opportunity for the distinguished participants from countries in the regions to discuss their experiences and perspectives on the implications of the recent food and fuel crisis and the ongoing financial crisis, and how we can effectively address poverty and hunger through adjustments in policies, institutions and programmes.

Following the shock of soaring food prices until the middle of last year, there is much greater appreciation for agriculture and its role in the economy now than, say, two years ago. The crucial role of agriculture in providing livelihoods and food security to people has been recognized now. There is also a greater recognition of the fact that agricultural growth in Asia is typically more “pro-poor” than growth in other sectors.

The reawakening of the donor community to the importance of agricultural development is encouraging, although much needs to be done. The European Union’s approval of the “Food Facility for Developing Countries” with a budget of one billion euros is one such example. FAO estimates that at least US$30 billion of investment in agriculture on an annual basis is needed to eradicate poverty and hunger from the world.

I am confident that, with the collective wisdom and insights of the distinguished participants gathered here, this review will produce tangible results in sharing experiences and lessons, and promote strategic thinking on how to turn the present challenges into opportunities to further our common goals of an Asia free from hunger and poverty.

I wish you success in your deliberations and thank you for your kind attention.