Caitlin Welsh: Good afternoon, everyone, and welcome. On behalf of CSIS and the U.N. International Fund for Agricultural Development, I am so pleased to welcome our audience in person and online to today’s keynote address and armchair discussion with IFAD President Alvaro Lario. I’m Caitlin Welsh, director of the CSIS Global Food and Water Security Program.
IFAD, the U.N. International Fund for Agricultural Development, aims to eliminate hunger and poverty by investing in and creating jobs for rural people. IFAD supports its programs and projects through a unique financial model. It’s an international financial institution. And when IFAD issued its first bond in 2022 it became the first U.N. fund and the first U.N. specialized agency, other than the World Bank, to operate bond capital markets. Today we’re going to hear more about et financial model alongside other aspects of its operations.
The theme of our event is “Bolstering Small-Scale Agriculture in an Era of Uncertainty.” And I would be remiss if I did not note that today’s event in Washington, D.C., in April 2025, is happening amid global economic turmoil and deep uncertainty around the future of U.S. foreign assistance, particularly with regard to global agriculture and food security. That said, the focus of today’s event is IFAD and its challenges, but moreover its successes, since President Lario took its helm in October 2022.
I’m very, very pleased to see a full room today, and a full audience online as well. And after President Lario’s keynote address and a video, and my conversation with President Laurio, we will welcome, and we very much encourage, questions from the audience. So if you’re online and would like to submit a question, please submit it at the “ask questions here” button on the event page. And if you’re online simply – or, sorry – if you’re in the room, simply scan the QR code that you can see here.
Also, a couple more notes about our run of show. Following the Q&A, I’ll be very pleased to welcome my colleague and friend Noam Unger, director of the CSIS Sustainable Development and Resilience Initiative, for some brief closing remarks. And then following Noam’s remarks, we will welcome everybody here who’s in person to a reception on our second-floor foyer, right behind you. Now, the second-floor foyer is also the location of one of our emergency exits, behind you and to the right. The other emergency exit is behind me and to your right. And should the need arise, which we do not expect, you can – please follow our instructions and move toward these exits.
Without further ado, it is my sincere pleasure to welcome back to CSIS Dr. Alvaro Lario, president of IFAD. IFAD’s entrance into capital markets, which I noted, I due in large part to President Lario, who served as IFAD’s associate vice president for financial operations prior to taking the helm of the fund. He assumed the presidency of IFAD in October 2022, and that same month we had the pleasure of hosting him here at CSIS for the first time, and then again in July of 2023. And this is our first opportunity to host the president in almost two years.
So we’re so pleased to welcome you, Dr. Lario, back to CSIS. And with that, the floor is yours. (Applause.)
Alvaro Lario: Well, thank you very much, Caitlin. Thank you to CSIS for the invitation, especially at this moment in time. And as you said, the mission of IFAD and the work of development is more important than ever. And I would like to put a little bit of a context of the title and where we are right now after these years. Also, we might also leave for later how we have evolved, what the institution is doing, and why we believe also the mandate and the mission of food security remains a very important mission for all of us collectively.
So it’s very clear that in the last years the number of conflicts have risen. We are at the highest in the last decades. We have also seen that the cost-of-living crisis and inflation have been going up, and impartially because of some of the uncertainty that we are seeing right now. The figures in terms of food security are also not very positive. We’re seeing 740 million currently in food – under food insecurity and poverty, and 300 million in acute food insecurity.
So the uncertainty that we are currently seeing also in terms of global trade value chains has also exacerbated. We saw already a shock during COVID-19 that made a lot of countries to reconsider food security. And this is very important, because actually food security has been always a pillar here in the U.S. as part of the national security; also the European Union and much of its policies.
But we didn’t see the same type of importance, for example, in many of the African countries. Since then, many of the African heads of state have realized that apart from production or productivity, it’s very important also to invest along the value chain in distribution, in storage, in marketing, and in becoming food self-sufficiency at least in a number of crops and a number of specific products.
We’re also seeing a push in many of these countries to really not only export raw materials, including in agriculture, but also to transform, to create jobs. In the case of Africa, it’s more needed than ever. If you think about Africa every year, you have 8 (million) to 10 million people, young people, going into the job market. You’re seeing 70 (billion dollars), 80 billion (dollars) of food imports. So it’s very clear that very little or very limited, actually, trade among African or interregional trade. So the opportunity is massive also in terms of investments of agri-value businesses.
We’re seeing lots of interest across the world in terms of investments in Africa, in land, in agribusinesses, but in the big agribusinesses. When we talk about small scale, that’s where the challenge is. Most of the poverty – 80 percent is actually in rural areas. And it’s in this subsistence farming or in this type of areas where we invest. It’s not the same type of challenge to invest in bigger agribusinesses, in trade financing, in commodities, that to invest in this first mile with a lot of the production is being currently.
So this is our purpose. Our purpose is to do the right investments, to really make sure that farming is a business. That means that farming has access to capital. We’ll talk perhaps about access to water, access to the markets, which is very important, at a fair price, access to being able to export or just to even trade. For that you also need infrastructure.
So the importance of the investments in this type of areas is a big driver of what can really bring down poverty and can bring down food insecurity. So apart from in many of the development financial institutions, in many of the institutions that are actually investing in aid, I think the important part is not just volume but also where is it being targeted and what has been the impact.
For us, we have over many years shown our impact in terms of evaluation of impact assessment. In the last three-year cycle we increased the income of 77 million rural women and men. I can give you the same figures for production, for resilience. And I think it’s very important nowadays – and we’re seeing it in the current context – to understand why these investments are important, why investments in development still matter, and how we can also stop the cycle of increased conflict, increased humanitarian assistance, increased forced migration. And this is one of the most effective ways.
Very briefly, perhaps in terms of official development assistance, having said the importance of it and the essential, the most important component we know is the local ownership and the government ownership. Development needs to be driven by the local needs, by the governments themselves. If you think about the figures themselves, official development assistance is around $250 billion U.S. Agriculture might be 5 percent of it, let’s say $10-12 billion. Compare this to the more than 1 trillion (dollars) of private – local private sector flows that you see, for example, in agriculture, just if you think about it it’s a massive difference. The same goes with the government’s investments, which in many cases have not been enough.
Yesterday, I was meeting with the minister of finance of Tanzania and, for example, in the last three or four years, they’ve increased by four times the investments. They see it as a natural way in agriculture of driving growth, of driving a lot of reduction of poverty. Why? Because many of these countries, especially in Africa, 60-70 percent of the population is in this subsistence farming and in these rural areas. So what do they need? And perhaps we can discuss now, is very clear. Like any other business, and including in developed economies, farming needs, as I said, and especially access to capital, access to technology, access to inputs, access to markets.
And we also have another challenge especially in this sector. Not only the developed world, not only in low-income countries, which is the average age of farmers. It’s around 60 years old. Clearly why do young people are not appeal to agriculture, in many cases? First, because agriculture needs to be a business. It needs to be also many times related to technology, to something that is appealing to them. And it needs to generate enough income. If not, nobody would start a business. Nobody would go into a sector if there’s not enough income. And this is a first priority. And it’s very important that farming needs to be seen as a business. For young people to also go into it, there needs to be also digital connectivity.
I was yesterday also signing some agreements with Microsoft, with the World Bank, with African Development Bank, with MasterCard, in terms of connectivity in certain countries in Africa, how to provide, also, to financial services to many of the young people, in this case also through insurance – agriculture insurance. So it’s important that this is also – their connectivity is part also of what the young people need. They need this opportunity. They need to also be trained. They need the skills to be able to run these businesses. And the most important part, they need to be able, like the governments and the countries I mentioned, they need to be driving their own development. This sense of hope, this sense of having a future, of being able to invest and knowing – we all sense it, but even more in these situations is more important than ever.
Let me very briefly, perhaps, share a video to showcase what this means in the case, for example, of one of our countries. And what it would – what this type of investments mean for family farming, as an example. If we can show the –
(A video presentation is shown.)
Dr. Lario: Well, thank you. As you may have seen, I mean, it really is about access to capital, access to soil – to the right soil, to water, to markets.
And for us as an institution – and with this I will finalize – this has meant that we have also had to evolve. As Caitlin was mentioning, in terms of our funding a number of years ago we got two credit ratings, two double-A-pluses, to also bring a lot of pension money into these type of investments. This has also meant that for the first time now in this cycle we will be using our own balance sheet to coinvest with the private sector. So it’s not only going to be public-sector loans, but actually also our own money, coinvesting in small and microenterprises, in platforms through intermediary funds and also with public development banks. I think public development banks can be certainly one of the – of the biggest contributors. They are really very much driven by national priorities. And also, other multilateral development banks. We have also finalized two, three projects, as an example, with the Asian Infrastructure Bank, which we are trickling down that big infrastructure – the bigger roads, the bigger dams – into the, really, connection with these rural areas, because it’s not the same, as I said. It’s a big challenge – we recognize it – to really operate and work in these very remote areas. But this is where, actually, the poverty is. And I think this is where the biggest development impact lies.
So thank you very much for having me today, and happy to continue our conversation. (Applause.)
Ms. Welsh: Thanks so much for those remarks, President Lario, and for that video.
And I do want to pick up our conversation with the remarks that you made just now about IFAD’s financing model – two double-A-plus ratings, issued your first bond in summer 2022, and then your 10th bond in January. So can you talk to our audience a little bit more about IFAD’s financial model, and then how that helps you to leverage resources for your projects, especially in this environment that we’re facing right now?
Dr. Lario: So for us it provides us with a flexibility that many other institutions don’t have. Obviously, development banks do have it, but many of the others don’t. That, obviously, allows us at this moment in time to really have a number of tools. Like, we are developing, like, for example, partial credit guarantees to mobilize more credit to small farm holders, to work with a number of local financial institutions and local banks, and also in many cases to cofinance very clearly with a lot of the multilateral development banks. So that flexibility we really need to take as much advantage as possible. We’re also thinking how to promote local currency in some of our private-sector investments. So it’s quite unique. But at the same time, I think we need to continue needing to push the envelope, to push the frontier, and – because working in these remote areas and in these places, as I said, it’s a big challenge. It’s costly. It’s not easy. But this is where our expertise is. This is where our niche is.
We are trying also to work more in fragile situations. Today we had also at the World Bank/IMF Spring Meeting some of the discussions there. We have as an example an agreement with the World Food Programme where we’re working in eight specific fragile affected countries. And I think that humanitarian development nexus that has been – we have been discussing for decades is also very important, where every institution plays to its own strengths. And I think that’s more and more what we need to do.
For us, it’s very clear. We work in food security, small-scale farming, climate adaptation, the ability of really going to that first mile and supporting farming as a business. So this is our expertise, and I think it’s more needed than ever.
Ms. Welsh: With regard to financing for development – thank you. (Laughs.) Thank you for that answer.
With regard to financing for development, the fourth Finance for Development Summit will be happening in Sevilla later this year. What do you hope will be one of the major outcomes there with regard to IFAD’s operations?
Dr. Lario: Well, more than for IFAD – I think for the entire community – I think one of the biggest challenges right now is the current uncertainty, which we all can recognize, in terms of the policies of a number of countries and how they want to support development as a way of overcoming poverty and hunger. But beyond that, the recognition that just – and I think this is the most important, perhaps, lesson learned from 2015 Addis Ababa – that the phrase of billions to trillions and the private sector coming in has clearly not been successful. We can continue talking, and especially in the U.N. system we talk a lot about the private sector. But unless there is – and that’s why, for ourselves, we need to evolve as an institution. And I’ll talk a little bit on that.
I think we need to put the instruments and the vehicles to really make sure that we are fit for purpose to work with the private sector. Obviously, we might have different goals. We might have different ways. But for us, the goal is clearly to increase the income, to create jobs, to provide those opportunities where there are none. So that’s very clear. The private sector might have other interests, which might be quality, reliability, speed, availability of the value chains on certain crops, but I think they can fit together. And putting the right vehicles is very important.
Let me put you an example. In the – in the Sahel, we work with a number of local – of local banks on how to provide zero percent interest rate loans to small-scale producers, small-scale businesses for climate adaptation activities. It’s very clear that they cannot borrow at the usual terms for those activities, which imply in many cases issues related to extreme weather events. So unless there’s a vehicle or a way or a platform whereby we blend, we de-risk, however we want to call it, they’re not going to be able to take a lot of those investments. So that’s an example.
We have others, with Equity Bank in Africa. We have invested in number of small enterprises. We are trying to configure a number of platforms through which we can also coinvest with the private sector. But for me at least, and for the institution, what we are trying to do is make sure – we have a 9 billion public sector loan portfolio, so how can we make sure that there’s entry points and exit points whereby the private sector can take over when we are not there so that sustainability of the products are there? That needs to – that’s a change of mindset of how we design, how we program, how we do a lot of our investments in these programs. And it’s not easy, neither within the institution nor for the governments themselves. But I think this is the future of development.
It’s clearly making those connections and those links. Just talking about it is not enough. We need to put the instruments and the platforms. And that’s one of the things that I would – and we have been discussing with the government of Spain, with a number of other governments, how can we ensure that this time it’s not only a headline but actually we can report and track progress against specific targets in this mobilization of private sector?
Ms. Welsh: Great. Thank you. We have some great questions coming in from the audience, but I want to ask one more question before we turn to those. And, again, encourage questions from everybody.
Just would like to hear from you what else you’re looking forward to throughout this calendar. So of course we’re at World Bank/IMF Spring Meeting week right now, Financing for Development Conference. What else is on – is on your mind as some of the most important convenings throughout the calendar?
Dr. Lario: Well, more than the events, I think what we are looking for is the commitments of governments to really continue increasing how much they devote of their own budget to supporting and investing in agriculture and in rural areas, as well as seeing some of them are already recapitalizing some of the land banks and of the public agriculture development banks. How can we support in those efforts? And more importantly, I would say, how can we make sure that governments still understand the importance or the catalytic role of some of this investment?
So for us, it’s more than a specific event, which there will be many and we will have, for example, our replenishment next year. The most important part, I think, is how we can work together with our institutions to continue evolving and making sure that we can deliver the impact. Because the most important part, at the end, is that impact on the ground. It’s not about how much IFAD or the World Bank is funded. It’s actually what are the outcomes and what’s the value for money, and what are we solving and what are the outputs of those investments.
Ms. Welsh: Let me ask one more question before we turn to questions from the audience. It’s about impact on the ground, and it relates to something that you said here at CSIS a couple of years ago. And it’s about water being key to having impact on the ground. And this is a quote from that time. You said: I’ve seen in our projects that when you get access to water, many times it’s when farming starts to become a business. Without water access, there is no business, there is no possibility of generating income. Since that time, you’ve become head of U.N. Water. So can you speak to us a little bit about how your approach to water has evolved?
Dr. Lario: Yes. So I was, yeah, named by the secretary general last year – at the beginning of last year, as the chair of U.N. Water, which basically is a coordination mechanism across all the funds, the programs, the specialized agencies. So from WHO, to UNESCO, to World Meteorological Organization, anytime, because water is very much across all sectors. And that’s one of the challenges. There’s no place where water is – actually, or any institution that just is dedicated to water. But we also have NGOs. We have the private sector. So it’s a very interesting – we meet once or twice per year. And last year, actually, we launched for the first time a system-wide strategy on water and sanitation which puts very much together, how we are going to translate that into impact, to the resident coordinators on the ground, so that there’s a way of really coordinating a lot of our efforts because, as I said, there’s many different interests, there are many different outcomes that we’re looking.
Water is very clear that there’s a lot of investments currently ongoing in water. For IFAD specifically, one of the issues that we have tried to focus is we see a lot of the big MDBs or a lot of the governments investing in big dams and in big irrigation systems. But many times the pipes or the connections to the small-scale farmers do not exist. So basically, I think it’s very important for us to really take over, or, as I said, with AIIB or with the World Bank, to really make sure that that really translates into an outcome for the ones who need it the most. Which, in this case, are the small-scale farmers in these rural areas. So this is our focus from the IFAD side.
In terms of the overall world, we’re seeing a lot of investments coming from the Middle East, obviously, from UAE, Saudi Arabia. And the good news is that it still is picking up a little bit of interest in the global community, like food systems did a number of years ago. I would say they’re two, three years behind. There will be a U.N. Water conference in 2026, another one in 2028 in Senegal and UAE. And at least this brings the community to talk about very difficult topics, like, for example, yeah, water, and upstream-downstream across countries, and very challenging topics that, I think, need to be discussed at the international level.
Ms. Welsh: Yeah. Thank you. Thank you for your service in that role.
We have some great questions from the audience. So the first one I’d like to turn to is about human capital to boost smallholder farmer productivity, from Innovations for Poverty Action, Michael Podesta. Michael, great, if we can bring the mic over to – great, thank you. And then we’ll go from Michael to Richard Rortvedt, here in the front row.
Question: Hi.
So I actually worked with the U.N. Food and Agriculture Organization on a series of investment briefs – on agriculture. And human capital is one of the topics we focused on. And what we’re seeing is there are a large number of smallholder farmers producing about a third of the total food supply. But productivity is not where it should be to meet the food supply needs in the coming years, like through 2030. So one question I have for you is, what investments is IFAD making to help farmers boost their productivity so that the – so that the food supply needs are met? Specifically on human capital. Thank you.
Dr. Lario: Thank you. Thank you very much for the question.
So in our case, especially with the youth, I mean, there’s two ways that we are basically – or, two ways our investments are focusing. One is on farmers’ schools. And that means on also teaching them the skills really how to – on agriculture and also on what works and what doesn’t work. The second that we feel that it’s also very much needed, and we also focus, on just business – how to run a business. Because it needs to be very clear many times, and many – in some cases, they are literate, in others they are not literate, but they need to also understand how to run a business. So those two clearly can make many of the enterprises and the business efforts much more productive, and at the same time also viable, which is very important. That’s one of the ways how we invest.
Ms. Welsh: Thank you.
Next question is from Dick Rortvedt from the Center for Tropical Agricultural Research and Higher Education. And we’ll go from Dick over to Julie Howard for another question.
Question: Yes, thank you. I’m the D.C. representative of CATIE, which is a 60-year-old university, basically – international university dedicated to agriculture and environment.
And this really piggybacks on the last question on human capital development. CATIE has been producing master’s and Ph.D. students – first program in Latin America, actually, in master’s of agriculture. And many of the leaders in research and higher education, and for that matter policy – a lot of the lot of the ministers of agriculture and environment have been CATIE graduates over the years. You mentioned the need to get the irrigation to the farm, not just the big systems, and the dams, and the delivery regionally. It has to be delivered to the farm. Then it has to be used the right kind of crops that are adapted to the changing climate. And so things aren’t static. They constantly need research. So I guess my question to you is, how can an organization like IFAD support the agricultural research institutions and the higher education for agriculture in the tropical developing world?
Dr. Lario: Thank you. That’s actually a very interesting question, because this is – I mean, whether it’s with the universities that we partner with, with CGIAR, with IFPRI. One of the biggest challenges that we see in many of the, I would say, research and large institutions how to actually translate it to impact on the ground.
And let me give you an example we had last year in Brazil with the ministers and also with the CEO of some big companies, including JBS. The challenge that they have there, just to refer perhaps to Latin America, is that they have Embrapa, which is the agency that tries to support many of these efforts. And many times they were asking for our support to really reach that first mile, to be able to talk to the local communities, to talk to the farmers’ organizations, to support them in the extension services.
Probably one of the biggest challenges of the entire community is that there’s not enough investment in this type of extension services and ability of assisting with that translation. We very much struggle, and there’s a lot of – I would say there’s a lot of money perhaps in, for example, CGIAR, and we partner with them, but actually how to make that partnership or that connection then translate into the efforts and the design of the government is never easy.
I think IFAD can be one of the institutions that can help on connecting and brokering. But the challenging – the challenge there on extension services and bringing that knowledge there to what works and what doesn’t work is one of the things that we are trying also to tackle as an institution.
To give you an example, last year we went through a recalibration inside the institution. And one of the things that we brought together was an office called the Office of Development Effectiveness. It looks at impact assessments, our policies, the quality assessment of our projects, the research we do or the research with whom we partner, and all of that brought into this critical mass within the institution to try to make sure that all of that is embedded back into the design of the project. But it’s a challenge, I think, that many of the institutions have in terms of how to connect to both.
Ms. Welsh: That will build on a question that I’ll go to after we go to a question for Julie Howard. So over to Julie for a question about private sector.
Question: Hi. I’m Julie Howard. I’m an independent consultant affiliated with the CSIS program here. But also I’m a board member at the World Vegetable Center, which has been a partner to IFAD.
And, you know, one of the things that I have always loved about World Vegetable Center, as well as IFAD, is this sort of pioneering attitude about the private sector. You guys really reaching out, both organizations, in a space where people are historically reluctant, let’s say. And I remember when you were here two years ago, you were just really starting off on this private-sector journey.
So I’m wondering, at this stage, what proportion of the portfolio, IFAD’s portfolio, is now co-invested with the private sector? And along the way, along that journey, what have you found to be kind of the biggest surprises and some of the biggest challenges to growing that portfolio?
Dr. Lario: Thank you. So currently our expectations for this new cycle is on our own money. And there’s different co-financing, but with our own monies are going to be approximately around 5 percent of portfolio, so still relatively small.
The co-investment that we expect from the private sector is one to five, whereas in a regular public-sector launch it would be one to two. So it’s very different in terms of the proportion of the – so one to two co-financing from climate funds, MDBs, governments. That’s on the public-sector side. On the private sector, we’re expecting a co-financing of one to five, so significantly higher.
The challenges, I would say, that we – they are mostly – as you said, we have had a rich history of creating public-private partnership with producers, what we call the four Ps. However, when we are co-investing, obviously we need to set up a completely new cycle of risk assessment, of how do you embed it into the programs, and just making sure that the culture and the country directors and the entire institution is fit for that.
We’re still in the process. That’s one of the challenges we’re still going through. I would say it’s not very different to what you would have here in the World Bank Group as an example. But for us in this specific sector, at least we’re very focused on our sector, so that’s to a certain extent (is here ?).
The second one is still thinking – and we’re in the evolution of thinking – what is our biggest, I would say, impact for every dollar. So is it better to go through intermediary funds? Is it better to try to create platforms ourselves? Is it better to do individual deals? What’s the best proportion? What’s our risk appetite? For the time being – and once more, when you go into the real operations it’s not the same to have a private-sector operation in Chad than to have it in Colombia. So it’s very clear that also how do we adapt even our own processes, the design of the programs to really match the risk appetite and the complexity and the ability to adapt.
So this is not easy, and it’s an – as I said, it’s an entire cultural change for the institution. And for us, that has been the biggest. In terms of opportunities, there’s plenty of them. But we have to be fit for purpose to really make sure, and that we have the highest impact for the scarcity of the money that we have. So we need to make sure that we really – the outreach, the impact that we’re having is the highest possible, and probably in the places that need it most. So that balance, still we are trying to figure it out. That’s where we stay. But I would say probably in three, four years we will be having much more clarity, much more evidence – because we also need to see the evidence of what has been that impact – to really be able to say where is exactly where we are seeing biggest impact for our investments.
Ms. Welsh: Great. Thank you.
And our last question from the audience I’d like to call on Mercy Corps, Katy Crosby, to talk about how to sell the importance and the value of investing in agriculture in this environment when funds are getting cut. So where is – great. Thanks.
Question: Thanks.
Obviously, Caitlin alluded to this at the top, that we are living in interesting times, shall we say. But one of the things that, unfortunately, we have seen is a pulling back of major donors from the foreign assistance base writ large, but particularly and disproportionately impacting longer-term investments in development assistance/development finance in favor of preserving some of the more humanitarian quick wins, if you want to call them that, or, you know, immediate response. So curious, as you are having these conversations now and looking ahead – whether it’s the U.S., the U.K., the Dutch, and others who are seeking to balance kind of the new normal of foreign assistance – how are you selling or making the case for that longer time horizon that we know and have seen the benefits of, particularly in ag investment, when everybody is really focusing on heading for the exits or at the very least looking for something that can be measured in weeks and months rather than years?
Dr. Lario: So I think there’s a lot of questions in your question. I’ll try to – (laughter) – decompose some of them.
Question: (Off mic.)
Dr. Lario: So probably – and I’m a very straight talker, so probably I’ll try to get to all of them.
So in terms of humanitarian versus development, let’s say one of the things – and I mentioned it today in one of the World Bank events. When I was meeting, for example, with the president of Somalia, he was very clear: We don’t want emergency assistance. We don’t want humanitarian. We want investments. We want investments. And that’s very clear. Many more heads of state actually are looking into that. We want – they don’t want charity. We don’t want aid. What we really need is investment. For that, obviously, there is a prerequisite, which is certain regulatory environment, certain institutions. We know it. But I think that’s the tradeoff between humanitarian and development.
Actually, some of the donors – without naming any country in particular – are also realizing that the escalating number of volume that have gone into humanitarian assistance is not sustainable. So probably there needs to be a little bit of a tradeoff or a change, or perhaps some investment in development, in order to prevent part of what might happen in terms of conflict and forced migration.
With respect to the private sector and ODA, one thing that I have very clear, and I also say it very straight generally to all our donors, is that private sector is not going to substitute this investment. There’s not a substitution. Many donors might want many institutions like ourselves to go only into very fragile and conflict-affected states, only into low-income. For that, unfortunately, many of these countries are in high debt distress, so you need grant money. You cannot go with concessional lending. That’s something to start with.
The same goes with respect to private sector. As I said, it’s not the same to invest in private sector in Colombia or in Chad, as I mentioned. The risk appetite is very different. The needs are different. Even the sectors are different. The vehicles are different. And it’s just like with philanthropies. Philanthropies will not be able to fill the void of all the donor cuts that we might see. Philanthropies or institutions like ourselves, I think that our key role is to be catalytic and to be able to put the foundation, then for the local private sector to take over. I think that’s what the role should be. It should not be just an investment of a program or of a project; that’s not impactful enough. And the less – or, the more cuts there is, the more we need to change into this mindset that we need to really make sure that we are putting the foundation for others to take over, not to fill the gaps.
So I think this filling the gaps, either philanthropies or private sector, is not the case. I think we need – and for the fourth financing – International Financing Conference for Development in Seville, this should be one of the aims. It’s not talking just about the private sector. We have to also think, what should be the role of official development assistance? How can we make sure that we are fit for purpose as institutions?
Ms. Welsh: Thank you.
That’s the last question from the audience, but there’s one more question from me. It’s been two and a half years since you assumed the presidency of IFAD. If you don’t mind reflecting on what you consider your greatest accomplishments in that time, and also what else it is – is it that you’d like to achieve as president?
Dr. Lario: So we went since then through the replenishment, which was the highest replenishment ever for IFAD. So I’m very happy about that. That’s obviously – is a testimony to the mission of the institution, to the strategy, to the impact that we have had right now. Then the next year, the second – that was the first year. The second year, we went through a restructuring of the organization. We created a private sector division under operations. We created the Office of Development Effectiveness. We brought a number of departments to consolidate, so that was already last year. We reduced the number of senior managers or assistant secretary generals. All of those actions were already taken.
I think, now, and perhaps to the private sector, I think the institution needs to continue evolving. More or less half of our directors have rotated. So I think we are ready. We’re fit for purpose to really make sure that we are instituting this cultural change on how we design, how we operate with the private sector. And this, for me, is going to be the next two years. Next year we’ll have another replenishment. So that – obviously, it’s another important milestone. But for me as the president, the most important part is to make sure that the institution is fit for purpose for the next decade. So the entire organization – the entire, I would say, mindset, culture, is there to really take over and make sure that we are delivering on what we promised.
Ms. Welsh: Well, we can talk about that the next time you come to CSIS. We can check in on that. (Laughs.) So thank you so much for joining us. It is such a pleasure to have you here. And it’s also my pleasure to welcome my colleague and friend, Noam Unger, director of the CSIS Sustainable Development and Resilience Initiative, for some brief closing remarks.
Dr. Lario: Thank you.
Noam Unger: Well, thank you Caitlin. And thank you, President Lario. I will be brief. As Caitlin said, I’m Noam and I direct the Sustainable Development and Resilience Initiative. It’s another program with another program within the broader Global Development Department that also includes the Global Water and Food Security Program that Caitlin so capably leads.
I had the pleasure of first meeting President Lario when I was working in a different capacity, but it was just at the very beginning of him taking the helm of IFAD. And so I really appreciated this last question, especially of you reflecting on the accomplishments in actually not a very long period of time, I will say. And I think that that speaks to President Lario’s deep knowledge, coming into the role, of the operations of IFAD, but also how it – a vision of how it could operate, and how it could operate at a higher level and in new ways. And I think that, you know, it – you say it sort of so easily and quickly, but in such a short period of time to have actually had the accomplishment with regard to the largest replenishment, in a not easy time for such replenishments on the international stage, and also restructuring IFAD, that is quite a testament to your leadership.
And I think the substance of what you shared in your remarks demonstrates the intensity of alignment between the work of IFAD and our Global Food and Water Security Program. You opened your remarks talking about the mandate and mission around food security. And you also highlighted in your comments, water security. And I think that these speak to an element that brings me to the title of today’s talk, right? The title of today’s talk talked about Bolstering Small-Scale Agriculture in an Era of Uncertainty. We can all point to different aspects that highlight that era of uncertainty. You mentioned global trade.
But flipping it on its head, if you zoom out there actually is a tremendous amount of certainty. And that certainty, in my mind, relates to the issues that were highlighted in the video that you shared with Iris in El Salvador, really changing a business model for farming in the face of increased droughts and storms. There is certainty about the need for greater resilience in the face of greater physical risk and extreme weather, especially in vulnerable developing countries and low-income countries, and especially among the sort of more-vulnerable smallholder agriculturalists in rural areas of those countries.
And so I think IFAD actually approaches that certainty with a very clear-eyed view amid sort of shorter-term uncertainty. And in that sense, I think you are doing an excellent job of anticipating the world to come and really building that fit for purpose that you were describing. And so – and it really boils down to, as you were saying, the future of development is in work that actually is creating private-sector mobilization instruments, and you’ve taken some really wonderful steps to move in that direction.
And so I just wanted to share that perspective and applaud you, and applaud – and thank you for the partnership that CSIS has going forward with IFAD. Thank you very much.
Dr. Lario: Thank you.
Ms. Welsh: Great. Thank you, Noam, for those very, very thoughtful remarks. Thank you.
And thank you again to President Lario for joining us. We look forward to welcoming you back.
IFAD, than you for your partnership in today’s event.
My whole team, thank you for your support. And special welcome to Rose Parker and Joely Virzi, new members of our team.
Audience, thank you so much for joining us in person and online. If you’re in person, please stay for our reception.
This concludes our event. Thank you, everyone. (Applause.)
(END.)
