Rural Investment Can Unlock Growth Across Latin America and the Caribbean, Says IFAD

The event, “The Future Starts in Rural Areas: Investing in Youth, Markets and Innovation,” brought together more than 80 participants from 15 countries, including governments, international organizations, financial institutions, businesses and young people.

Investing in rural communities means investing in the food, jobs and economic stability that entire countries depend on, the International Fund for Agricultural Development (IFAD) told a regional gathering in Panama. Slow economic growth, geopolitical uncertainty and mounting climate risks have made that investment more urgent across Latin America and the Caribbean, where stronger rural economies can help protect food supplies and give communities the resources to withstand disruption. The event, "The Future Starts in Rural Areas: Investing in Youth, Markets and Innovation," brought together more than 80 participants from 15 countries, including governments, international organizations, financial institutions, businesses and young people.

Building Opportunities Beyond the Farm

Rural development reaches far beyond agricultural production, touching everything from the availability of local jobs to the ability of producers to earn more from what they grow. Rocío Medina Bolívar, IFAD's Regional Director for Latin America and the Caribbean, called for joint efforts to mobilize resources and expand investment, explaining that thriving rural economies strengthen food systems and help communities withstand economic and climate shocks. Panama's Vice Minister of Finance, Fausto Fernández, placed rural development within a broader agenda of productivity, employment and reduced inequality, pointing to opportunities in agriculture, agro-industry, tourism, logistics, services and the digital economy.

Turning that potential into reliable incomes requires better access to finance and markets, alongside opportunities for producers to process, store and market their products rather than depend entirely on selling raw produce. Participants identified innovation and stronger private-sector involvement as practical ways to expand those opportunities, with IFAD data indicating that investments involving strong private-sector engagement can generate up to a fourfold increase in rural workers' incomes. Creating the conditions for businesses and producers to develop these activities could help more of the value generated in rural areas support local livelihoods.

Giving Young People Reasons to Stay

Limited economic prospects often push young people towards cities or other countries, leaving rural communities without the energy and ideas they could bring to local businesses. The Panama gathering gave young participants direct access to decision-makers to discuss opportunities that would allow them to stay, invest and prosper at home. Yeisully Tapias, founder of the Association of Young Entrepreneurs, urged institutions to treat young people as active participants in designing solutions, stressing that investment in their abilities is essential for projects expected to deliver lasting benefits.

Technology is already offering practical examples of how rural businesses can develop new capabilities through support adapted to their needs. Innovatech, funded by IFAD and the European Union, has connected more than 30 emerging technology companies with over 1,000 small-scale producer organizations to adapt solutions for small-scale farmers. Their work covers financial services, marketing, financial education and sustainable production, bringing innovation closer to the everyday challenges producers face when managing money, finding customers and improving their operations.

Turning Funding Into Wider Rural Impact

The event formed part of IFAD's fourteenth replenishment, known as IFAD14, through which Member States contribute resources for investment in rural people, stronger agrifood systems and sustainable development. Those contributions will support its programme of work for 2028–2030, combined with cofinancing and other capital to extend the reach of rural investments. IFAD says its financing model turns every dollar received in core Member State contributions into approximately six dollars of investment on the ground, making those contributions a foundation for substantially larger funding commitments.

With an AA+ credit rating, IFAD is the only United Nations fund authorized to issue sustainable bonds in international capital markets and has issued more than US$1 billion since 2022. Its record in Latin America and the Caribbean stretches back to its establishment in 1977, with more than US$9 billion mobilized through 525 rural development projects. The current regional portfolio includes 25 active projects worth US$2.5 billion, combining IFAD resources with partner financing to support rural communities and their economic development.