NEW UN REPORT SPOTLIGHTS CHALLENGES TO RURAL DEVELOPMENT IN WESTERN BALKANS

Economic development in the rural areas of several nations in the Western Balkans is being hindered by challenges related to agriculture, climate change and migration, according to a new report by the United Nations Food and Agriculture Organization (FAO) and the World Bank.

The report, "The Changing Face of Rural Space: Agriculture and Rural Development in the Western Balkans," takes a look at the situations in Albania, Bosnia and Herzegovina, Montenegro, Serbia and the former Yugoslav Republic of Macedonia.

It says that agricultural trade deficits are widening and climate change is putting pressure on agricultural resources. In addition, young people are increasingly migrating to urban areas or abroad in search of economic opportunities.

While the five countries are at different stages of development, they face similar challenges in modernizing their agricultural sectors to become competitive in regional and European markets.

"The agrifood sectors in these countries are undercapitalized and highly fragmented, dominated by small producers with unsophisticated production and quality control systems," says FAO's David Lugg, a co-author of the report. Processing capacity, a potentially critical part of the value chain, is also limited.

The report, intended primarily for policy-makers and donors in the region, notes that scarce credit or land, expensive inputs, degraded infrastructure and poor access to high-value markets are among the obstacles faced by some farmers.

At the same time, the report suggests that the prevailing challenges, as well as the region's ongoing process of integration with the European Union, are an opportunity.

"The need to meet EU food safety and other standards while addressing the food and financial crises is a powerful incentive for improving agricultural policy," it states. "Agriculture and rural development as sources of growth, employment and food security now need to be taken seriously."

Julian Lampietti of the World Bank also notes the need to look beyond agriculture at overall rural development in the region.

"What's needed is a balanced approach that emphasizes increased competitiveness of the agrifood sector while providing alternative income opportunities in rural communities to help future generations avoid the poverty trap," he says.

The report also calls on countries to come up with strategies to adapt to climate change, noting that the region is likely to face higher temperatures, reduced and more variable precipitation, and more frequent extreme climatic events, such as floods, droughts and heat waves.
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ASIA-PACIFIC REGION FACES ‘TRIPLE THREAT’ TO ECONOMIC DEVELOPMENT, WARNS UN REPORT

ASIA-PACIFIC REGION FACES 'TRIPLE THREAT' TO ECONOMIC DEVELOPMENT, WARNS UN REPORT
New York, Mar 26 2009 12:00PM

The triple threat of the global economic recession, volatile food and fuel prices, and bearing the brunt of the world's natural disasters has hit countries in the Asia-Pacific region particularly hard, a new United Nations report warned today.

With almost two-thirds of the world's poor and half of its natural disasters, the region is at the epicentre of these crises, according to the report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The report, entitled "Addressing Triple Threats to Development," noted that record high oil prices in 2008 of $147 dollars a barrel, in combination with hording and price speculation drove the price of rice – the region's staple – up by 150 per cent, hitting the poor the hardest.

At the same time, another ESCAP report showed that almost a quarter of a million people died in 2008 as a result of natural disasters in the region, representing 97 per cent of fatalities worldwide.

"The converging triple threat highlights the need for a more comprehensive, inclusive approach to development," stressed ESCAP Executive Secretary Noeleen Heyzer.

"Not only is there an urgent requirement to resume economic growth, but we have to re-think where that growth takes place and whom it benefits," added Ms. Heyzer.

Prudent macroeconomic policies, implemented in reaction to the previous economic crisis which swept the region in 1997, bolstered the Asia-Pacific at the beginning of the current slump. However, that resilience started to erode, when in the fourth quarter of 2008, trade – the region's engine of growth – moved from double digit growth to double digit declines.

Among the reasons for this reversal in trade is that the region's economy is more integrated with the rest of the world than with itself.

Ms. Heyzer noted that "intra-regional trade among developing countries accounts for only 37 per cent of exports in our region, compared with NAFTA [North American Free Trade Agreement] at 51 per cent and the EU [European Union] at 68 per cent.

"By strengthening our domestic markets, the region can provide a buffer to global market fluctuations and move from being crisis resilient to crisis resistant. A key component in this will be how governments use fiscal policy as a tool of development."

The Survey calls for more intra-regional trade and investment by accelerating the implementation of regional economic cooperation agreements, as well as improved basic social protection. Currently only an estimated 30 per cent of the elderly receive pensions and 20 per cent of the population have access to health-care assistance.
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