VZCZCXRO3786
PP RUEHRN
DE RUEHRN #0027/01 0991404
ZNR UUUUU ZZH
P R 091404Z APR 09
FM USMISSION UN ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 1079
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RHEHAAA/NSC WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0316
RUEHGV/USMISSION GENEVA 0239
RUEHBS/USEU BRUSSELS 0198
RUEHFR/AMEMBASSY PARIS 0082
RUEHLO/AMEMBASSY LONDON 0046
RUEHKO/AMEMBASSY TOKYO 0121
RUEHC/USAID WASHDC
RUEHRL/AMEMBASSY BERLIN 0038
RUEHOT/AMEMBASSY OTTAWA 0092
RUEHRO/AMEMBASSY ROME 0456
RUEHRN/USMISSION UN ROME 1149

UNCLAS SECTION 01 OF 05 UN ROME 000027 
 
SIPDIS 
 
TREASURY FOR L.MORRIS 
USDA FOR DOUVELIS 
 
E.O. 12958: N/A 
TAGS: UN EFIN EAGR EAID ECON IFAD
SUBJECT: NEW PRESIDENT OF INTERNATIONAL FUND FOR AGRICULTURAL 
DEVELOPMENT DELIVERS VISION STATEMENT; HOSTS SECRETARIAT OF UN'S HIGH 
LEVEL TASK FORCE ON FOOD SECURITY 
 
¶1.  (U) This message is sensitive but unclassified.  Please 
handle accordingly. 
 
------- 
Summary 
------- 
 
¶2.  (U) On April 2, newly-elected President Kanayo Nwanze of the 
International Fund for Agricultural Development (IFAD) briefed 
Executive Board members on his "vision" for this small, but 
increasingly important United Nations (UN) development 
bank/institution.  Among his six key areas of focus, the 
Nigerian-born Nwanze emphasized an expanded program of work, 
strengthened partnerships with organizations involved in food 
security, and a collaborative relationship with a more 
"strategic" executive board (Note:  Text of Nwanze's briefing at 
paragraph five.  End note).  As Nwanze begins his tenure at a 
well-financed and reformed IFAD, he also inherits a small, 
recently-established Secretariat of the UN's High Level Task 
Force (HLTF) on food security, run by Coordinator David Nabarro, 
and housed in IFAD's Rome offices.  This Secretariat is studying 
food security in a number of poor and developing countries, 
looking at ways to improve coordination and fill gaps in 
development finance for agriculture and food-security.  The 
placing of the HLTF Secretariat at IFAD reflects a strong sense 
of confidence within the UN system, and among IFAD members that 
a successfully reformed and well-managed IFAD is capable of 
playing a leading role in the global fight against hunger.  End 
summary. 
 
--------------- 
IFAD's New President 
--------------- 
 
¶2.  (U) Nigerian national Kanayo Nwanze was elected this 
February as IFAD's 5th President, taking over from Swedish 
national and two-term president, Lennard Bage.  In a strong show 
of member support, Nwanze received enough votes in the first 
round of voting to secure the top job, moving up from his 
previous position of Vice President at the Fund.  Nwanze is set 
to lead the organization after IFAD received a record-setting 
replenishment during the last Executive Board meetings. 
Information on IFAD and on Nwanze can be found at their website: 
 http://www.ifad.org/.  During his first week in office, Nwanze 
hosted Executive Board member representatives and other partner 
organizations for a briefing on his vision for the organization 
during his presidency.  The presentation was very well received 
by attendees, and reflected an impressive level of 
professionalism and confidence. 
 
----------------------- 
IFAD Hosts UN High Level Task Force 
----------------------- 
 
¶3.  (SBU) Last year, UN Secretary General Ban Ki Moon created 
the High Level Task Force (HLTF) for food security in New York, 
comprised of a wide array of UN agency heads dealing with the 
complicated topics of agricultural development and food 
security.  A small Secretariat was created, led by David 
Nabarro, and recently housed in the Rome offices of IFAD, over 
the objections of the HLTF Vice Chair, Food and Agriculture 
Organization (FAO) Director General Jacques Diouf.  The 
Secretariat presently has a staff of between 5-7, including 
seconded staff from Italy, France, Switzerland, and others, but 
may be expanding should funding be secured for its operations. 
The Secretariat staff is currently assessing the food security 
situations of a group of developing countries (between 25-40) to 
identify what funding and programs are available in each, to 
identify potential gaps where additional financing for food 
security projects might be directed. 
 
¶4.  (SBU) As part of the HLTF's work regarding food security, 
efforts are underway, led largely by the UN Secretary General in 
New York, to attract additional international financing for 
agricultural investment and development.  An international food 
 
UN ROME 00000027  002 OF 005 
 
 
security conference hosted by Spain in January was a key focal 
point for these efforts, and included discussion of available 
mechanisms to channel funding to poor farmers in the developing 
world.  Noted economist Jeff Sachs was among the active 
participants in Madrid, and continues to advocate strongly for 
increased funding to the third world for agriculture. 
 
------------------------- 
Text of Nwanze "Vision" Statement 
------------------------- 
 
¶5.  (U) Begin Text of IFAD President Nwanze's April 2 Briefing: 
 
Introduction 
Colleagues, partners, friends.  Thank you for joining me today. 
I am delighted to have this opportunity to address you in making 
my first remarks as President of IFAD.  It is fitting that you 
should share this moment with me, for you are the compass that 
provides direction for everything that we do.  I would first 
like to express my gratitude for the confidence that the members 
showed in electing me as IFAD's fifth President.  As I said in 
my acceptance statement on 18 February, with your support I want 
to build on the reforms so effectively introduced during Lennart 
Bage's two terms of office.  The effectiveness of those reforms 
was recognized when IFAD's members agreed on the record-setting 
8th Replenishment. With the resources this will bring, I want to 
make IFAD an ever-stronger ally for poor rural people.  What you 
will want to know today, though, is what my priorities are for 
my Presidency of IFAD.  Although these are very early days, I 
can say that where we already do well there will be continuity 
and growth.  But where there is unfinished business, we will 
complete it.  And, in both cases doing better will be our 
constant challenge. 
 
Continuity 
Let me start with continuity.  I am, of course, not a newcomer 
to IFAD.  I have served two years as Vice-President, during 
which time I worked closely with Lennart Bage to support the 
Executive Board's work to raise IFAD's impact and effectiveness 
in addressing rural poverty.  As I embark on my new role as 
President, I want to offer you this reassurance:  I will be an 
advocate for continuity when it comes to IFAD's already solid 
reputation.  IFAD will continue to build upon its reputation as 
a results-driven organization.  Achieving concrete results and 
impact on the ground through our projects and programs, in 
collaboration with our partners, will continue to be at the core 
of IFAD's work.  Similarly, IFAD will build upon its experience 
and reputation as a proactive partner on the international 
scene. 
 
I know you recognize the importance of IFAD's engagement in the 
international arena - so do I.  That is why I plan not only to 
continue this engagement, but to strengthen it.  I know you 
recognize the importance of IFAD's role as an international 
advocate for smallholder farmers in developing countries - so do 
¶I.  That is why I will promote this unique role of ours even 
further.  The political agenda must keep agriculture at the core 
of the global debate.  I know you value IFAD's collaboration 
with our existing partners, especially FAO and WFP, but also 
with the World Bank and other regional cooperating institutions 
- so do I. 
 
I am delighted that our work with the FAO Investment Centre, for 
example, more than doubled between 2005 and 2007, and is set to 
record a further rise.  Our efforts must dispel perceived 
competition amongst existing institutions.  That is why I plan 
to strengthen IFAD's partnerships and deepen its collaboration, 
and in doing so, help us achieve greater effectiveness on the 
ground.  Another example of our commitment to strategic 
partnership is our support to agricultural research and 
development institutions such as the CGIAR.  Our investment in 
the reform of the CGIAR through the co-chairmanship of Rodney 
Cooke already speaks for itself.  In short, I envisage a dual 
role for myself.  First, I want to champion international 
efforts to enable poor rural people to improve the quality of 
 
UN ROME 00000027  003 OF 005 
 
 
their lives.  This will require us to build on the progress IFAD 
has already made under Lennart Bage to enhance our impact on the 
ground.  And secondly, I want to serve as an advocate for 
greater investment in agriculture and rural development, and I 
will take every opportunity to do so. 
 
On the question of IFAD's human resources reform, I recognize 
that this has been a top priority for the Executive Board.  IFAD 
made tremendous progress under Lennart Bage's administration. 
We have an open, transparent, merit-based recruitment process 
that allows us to attract high quality talent from around the 
world.  I will continue that work throughout the organization 
and I will call on you to support and safeguard our reputation. 
I firmly believe IFAD's key asset is its staff.  As I said when 
I was elected in February, we need to ensure that our continuing 
HR reform program enables IFAD staff to give their best at all 
times, particularly in these challenging times.  The strategic 
alignment of our workforce to our corporate objectives is an 
essential part of our plans.   This will ensure that our 
improved capacity building of IFAD human capital is enhanced 
through effective planning, staffing, education, and development 
opportunities.  But, we should now move from processes to 
products. 
 
We also need to pay attention to the environment in which our 
staff work.  We need to create a work environment that is 
exciting and encourages innovation and creativity.  This is a 
marvelous building, which has already done a great deal to boost 
staff morale and improve the way we are able to work together. 
But, no one will cherish their work environment, however 
inspiring, if they cannot leave it at the end of the day.  That 
is why we need to go further.  We need to acknowledge that the 
family is an integral part of the individual.  We need to put 
into practice improved work-life balance initiatives. 
 
Finally, on the question of continuity, I want to offer this 
additional reassurance.  As VP, I was most proud of the work I 
did to support the reform effort by championing Knowledge 
Management, Risk Management, and the Quality Assurance effort 
that has helped ensure that IFAD projects can have a greater 
impact on the ground.  I am gratified that IFAD has made real 
progress in these three areas.  As President, I want both to 
build on this progress and to extend that same attention and 
commitment to every aspect of IFAD's work. 
 
Much To Celebrate; More To Do 
Let me now move on to the question of doing better.  IFAD is a 
good institution, but we need to move from "good" to "great." 
We should keep in mind that "successful change is not a function 
of how much people like the change; rather it is a function of 
how productive people are in the new work environment."  This is 
where I would like us to be four years from now. 
 
But, at the outset, let me stress that I do not believe in 
change for its own sake.  If something works well, we need to 
safeguard it.  If it isn't broken, we don't need to waste energy 
and resources to fix it.  That is why I have set out my 
commitment to continuity where it is clearly right for the 
organization and our mission.  In terms of the work of the 
Executive Board, we have already committed to a challenging 
agenda for three sessions this year.  By the end of 2009 we 
should have approved the final Results Measurement Framework; we 
should have received a revised policy on grants, IFAD's human 
resources reform agenda, and reviews of IFAD's project 
procurement guidelines and our lending policies and criteria. 
We have our work cut out for us, but it is important work. 
 
You have already supported us in the move to a new operating 
model based on an expanded country presence.  That work is 
moving forward but faces pressing challenges.  For example, we 
know that there must be greater investment at the front end of 
this roll-out and these costs will diminish over time. 
Significant early investments now will enable us to put the 
systems in place, both at IFAD HQ and in the field, to ensure 
the longer-term success of the new operating model in delivering 
 
UN ROME 00000027  004 OF 005 
 
 
a greater program of work and more efficient use of IFAD 
resources. 
 
My first proposal is to invest adequately now in IFAD's new 
operating model. 
The 8th Replenishment provided a strong basis for increasing 
IFAD's program of work.  The unprecedented 67 per cent increase 
over IFAD's 7th replenishment, amounting to a target of US $1.2 
billion of member contributions, will allow us to considerably 
expand our program of work.  Indeed, we can anticipate a program 
of work of up to US $3 billion, with co-financing expected to 
bring total investments to US $7.5 billion during the period 
2010-2012.  But we can only increase our program of work if all 
outstanding pledges are forthcoming.  At the moment, there is a 
gap of about US $80 million; approximately US $942 million of 
pledges received versus US $1.02 billion needed by August 19. 
 
My second proposal is to call on the Board to ensure we fill 
this gap by 19 August. Only that way can we deliver an expanded 
program of work. 
 
We are living in challenging times - this is especially the case 
for poor rural people.  The twin problems of global food 
security and economic recession have already pushed another 100 
million people into poverty and hunger, and millions more may 
follow if global economic conditions deteriorate further.  That 
is why it is imperative for IFAD to be able to increase its 
program of work. 
 
My third proposal is to extend our reach. 
With an increased program of work we will have the capacity to 
reach more poor rural people, and improve their lives and 
livelihoods.  2008 was a year of turmoil in the financial 
markets.  Through its prudent policy of keeping the vast 
majority of its investment holdings in high grade government and 
other bonds, IFAD was able to weather the crisis and achieve a 
net investment rate of return of 5.45 percent for 2008, a rate 
well above its target rate of 3.5 percent.  Instrumental to this 
result was the timely identification and mitigation of risks by 
a high level financial task force chaired by the AP FAD to 
monitor developments, coordinate interaction with external 
parties, and propose tactical actions and/or decisions, where 
required. 
 
An issue that received particularly close follow-up by the task 
force was the securities lending program, in particular the 
management of securities held as collateral under this program. 
IFAD, like many other international institutions, has undertaken 
this program for several years.  In December 2008, IFAD took 
swift action to carve out its assets from the pool managed by 
the Fund's global custodian bank so as to pro-actively manage 
its collateral portfolio based on more prudent guidelines.  This 
ensured that this risk was mitigated effectively and that its 
impact on IFAD's investment result was minimal.  The Fund 
remains fully vigilant and continues to closely monitor 
developments. 
 
The estimated return for the first quarter of 2009 is 1.13 
percent, which on an annualized basis is higher than the annual 
investment target of 3.5 percent.  However, in light of the 
continuing volatility in financial markets and the current 
decrease in yields of fixed income investments, reaching the 
target return in 2009 will be challenging.  IFAD is reviewing 
the situation continuously. As in the past, the Audit Committee 
and the Executive Board will be kept fully informed of 
performance, emerging risks and actions taken by the Fund. 
Since 1978, IFAD has invested over US $11 billion in grants and 
low-interest loans, helping 340 million people in developing 
countries all over the world.  Together we must decide how to 
extend our reach to ensure the quickest impact in the shortest 
time.  We can't do this alone.  We need to improve and expand 
our partnerships, to benefit from synergies so that we can boost 
our effectiveness on the ground. 
 
My fourth proposal is to expand and strengthen our partnerships, 
 
UN ROME 00000027  005 OF 005 
 
 
not only with the UN system and other IFIs but also with 
agricultural research and development institutions such as the 
CGIAR, AGRA, AFD, AAF and others. 
 
Fifth, I would like to see IFAD have a more dynamic relationship 
with a more strategic Executive Board. 
 
I would like the Executive Board to have more time to consider 
the strategic aspects of IFAD's work.  With an increased 
workload, the Executive Board would need a more strategic role 
in order to address this workload.  They would need more time 
and opportunity to exchange and dialogue, and greater engagement 
of the Conveners and Friends in setting the Board agenda.  The 
Board is also vital in ensuring that IFAD's human resource 
capacity and financial resources match our needs.  I should like 
to take this opportunity to flag this up as a continuing 
challenge for us. 
 
My sixth proposal is to have an early conversation with the 
Board on how to achieve approval of projects on a no-objection 
basis.  The objective here would be to allow more time for the 
Board to focus on the policies and strategies that guide IFAD's 
activities. 
 
Finally, I recognize that there is a great deal of interest in 
the line up of my senior management team.  I prefer to see this 
in terms of "reconfiguration" - a process that is still at the 
concept stage.  But, I promise you that it is one on which I 
shall advise you as it proceeds.  I was elected for reasons that 
you know better than myself:  decision-maker, manager, 
professionalism and integrity.  That is why my colleagues on the 
executive team must be complementary, and its composition and 
configuration must respond to the needs of the institution and 
its many players. 
 
Conclusion 
Let me briefly return to the context in which we are operating - 
with price volatility on international markets putting pressure 
on global food security, combined with an ongoing financial 
crisis, a global economic downturn, and the continuing effects 
of climate change.  This context is well known to you all, and 
sadly needs no elaboration. 
 
One positive thing that has emerged from the crisis is the 
renewed international focus on agriculture.  The Secretary 
General's High Level Task Force provided a good deal of the 
impetus driving that development, and is to be welcomed.  But as 
more players join us in facing the challenge of rural poverty, 
we should also recognize that there will be a challenge for us 
in ensuring that IFAD remains relevant and coordinates 
effectively with its partners on the international scene.  Poor 
rural people face immense and growing difficulties in feeding 
themselves, their families, their communities, and their 
countries. IFAD's principal goal, and our fundamental mission, 
is to enable and empower poor rural people to improve their 
lives and their livelihoods.  We must not lose sight of this 
fundamental objective.  With your continued support, we can meet 
it. 
 
End text of statement. 
 
------- 
Comment 
------- 
 
¶6.  (SBU) This briefing by Nwanze was particularly helpful in 
laying out the course the new IFAD leader will take.  Though 
quite early, it would seem our support for Nwanze's election was 
indeed appropriate, and continued strong support warranted.  End 
comment. 
HEINENSE