The Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) has joined forces with the International Fund for Agricultural Development (IFAD) to create a 7,6 million US dollar program in Latin America and the Caribbean that will promote savings and investments in poor rural areas receiving remittances from migrants.
A memorandum of understanding was signed Wednesday at IDB headquarters by Enrique V. Iglesias, IDBs president, and Lennart Båge, IFADs president, to establish the MIF-IFAD Partnership Facility for Rural Private Sector Development.
Under the agreement, MIF will contribute up to 4 million dollar to the joint program while IFAD will contribute up to 2 million. Local counterpart organizations are expected to commit a total of 1,6 million dollar in various project proposals.
– This partnership marks the first time MIF has worked with a multilateral institution, says Iglesias. – Given IFADs role in supporting sustainable rural development and IDBs financial experience in Latin America, we fully expect our first program to capitalize on the strengths of our two organizations to make remittances a true tool for development.
Remittances are funds sent from migrant workers to relatives or friends in their country of origin and are often used to buy food, pay bills and raise standards of living. More than 100 billion US dollar is sent in remittances around the world each year.
In 2003, remittances to Latin America and the Caribbean reached over 38 billion dollar; more than the total amount of foreign direct investment and official development assistance to the region.
– Remittances are private resources that belong to very hard working people, says Båge. – But remittances are also an important source of income for millions of poor people around the world, and provide valuable foreign exchange to developing countries.
– We do not want to discourage consumption, but remittances can create opportunities for saving and investments in rural areas and help people overcome poverty, added Båge.
More than 900 million of the worlds 1,2 billion poor people live in rural areas.
The program will work to reduce the cost of transferring remittances by helping credit unions and microfinance institutions in low-income rural areas of Latin America and the Caribbean provide better financial services.
Building on IFADs experience linking migrants with their original rural communities, the joint program will also work with expatriate groups to help provide access to investment resources, advanced technologies and new markets in their host countries.
– Making migrants our partners in development is one of the most innovative aspects of this program, added Båge.
IFAD on IFAD
IFAD is a specialized agency of the United Nations dedicated to combating rural poverty in the most disadvantaged regions of the world. Since 1978, IFAD has invested 8,1 billion dollar in 653 rural development projects and programme in 115 countries and territories. Through these projects and programmes, about 250 million rural people have been supported in their efforts to overcome poverty.
MIF on MIF
MIF is an autonomous affiliate of the Inter-American Development Bank that supports private sector development in Latin America and the Caribbean through loans, investments and grants. Since 1993, MIF has worked with business groups, NGOs and public sector entities to develop broad-based growth and increase the economic participation of smaller enterprises. With close to 600 projects and a total commitment of 900 million dollar, MIF is the major source of technical assistance grants for small business development in the region.
For more information, please contact: Farhana Haque Rahman, Coordinator, Communications Special Programmes, tlf 00 39 06 5459 2485 [email protected]
Kilde: www.ifad.org
