Governments, financial institutions, international organizations, the private sector and young people discuss how to expand economic opportunities in rural areas
PANAMA CITY - Against a backdrop of slow economic growth, geopolitical uncertainty and increasing climate risks, greater investment in rural areas is essential to drive growth, strengthen food security and build more resilient economies across Latin America and the Caribbean, the International Fund for Agricultural Development (IFAD) highlighted today at the regional event "The Future Starts in Rural Areas: Investing in Youth, Markets and Innovation," held in Panama.
More than 80 participants from 15 countries across the region — including representatives of governments, international organizations, financial institutions, the private sector and young people — discussed the policies, investments and partnerships needed to expand economic opportunities in rural areas.
"We have an opportunity to work together to mobilize more resources and invest at scale in the transformation of rural economies. When rural economies thrive, society as a whole benefits. Food systems become stronger and rural communities are better prepared to withstand economic and climate shocks. The food security, stability and economic prosperity of our countries also depend on the dynamism of their rural areas," said Rocío Medina Bolívar, IFAD Regional Director for Latin America and the Caribbean.
Panama's Vice Minister of Finance, Fausto Fernández, said that Panama shares a fundamental vision: rural development cannot be viewed in isolation; it is part of a broader agenda of growth, productivity, job creation and reducing inequalities.
"Our rural areas have enormous potential in agriculture and agro-industry, but also in tourism, logistics, services, the digital economy and other activities capable of generating value and jobs. The challenge for public policy is to create the conditions for that potential to translate into growth, jobs and well-being," Fernández said.
Among the actions identified to advance rural development were improving producers' access to finance and markets, as well as creating opportunities for them to participate in value-added activities such as processing, storage and marketing their products.
Innovation and greater private-sector participation can also help boost rural economies. When private-sector engagement is strong, investments can generate up to a fourfold increase in the incomes of rural workers, according to IFAD data.
One example of innovation in rural areas is Innovatech, an initiative funded by IFAD and the European Union, through which more than 30 emerging technology companies have worked with over 1 000 small-scale producer organizations to adapt technological solutions to the specific needs of small-scale farmers. The solutions developed by the startups cover areas including financial services, marketing, financial education and sustainable production.
The role of rural youth
The event provided an opportunity for direct dialogue between decision-makers and young people on how to create more opportunities for a population that, faced with limited economic prospects, often migrates to cities or other countries.
Yeisully Tapias, founder of the Association of Young Entrepreneurs, highlighted the importance of creating concrete economic opportunities that enable young people to stay, invest and prosper in their communities.
"Young people are not only the future; we are the present. Our role is not to be listeners, but active participants and drivers of solutions. Young people bring innovation, energy and strength to rural areas. If institutions want projects that are sustainable over time, they need to invest in young people," Tapias said.
More investment to scale up impact in rural areas
The event was held as part of IFAD's fourteenth replenishment (IFAD14), the process through which Member States contribute resources that enable IFAD to invest in rural people, strengthen agrifood systems and promote sustainable rural development.
These resources will finance IFAD's programme of work from 2028 to 2030 and will be combined with cofinancing and other sources of capital to expand the reach of investments in rural areas.
With an AA+ credit rating and as the only United Nations fund authorized to issue sustainable bonds in international capital markets, IFAD is a global leader in innovative, market-based solutions to drive rural transformation. Since 2022, it has issued more than US$1 billion in sustainable bonds.
This unique model enables IFAD to turn every dollar it receives in core contributions from its Member States into approximately six dollars of investment on the ground.
Since its establishment in 1977, IFAD has mobilized more than US$9 billion in Latin America and the Caribbean through 525 rural development projects. Its current active portfolio in the region comprises 25 projects with a total value of US$2.5 billion, including IFAD's own resources and financing from other partners.