From the Chief Executive Officer
Despite the clouds gathering over the global economy, FMO had an
overall positive 2011. Our portfolio size and development impact
improved further and we enhanced efforts to stimulate knowledge
exchange and innovation, even though our profit was not as high as
last years' results.
Our approach - working at the frontiers of development finance,
investing capital in projects and places where others cannot or
will not venture - paid off again in 2011. FMO's relevance was
reaffirmed as many western commercial banks hit by the eurozone
crisis reduced their lending in emerging markets.
The economic crisis in the developed world is having
far-reaching consequences, accelerating fundamental changes that
are already underway. Three profound and interconnected global
trends are becoming increasingly evident for FMO.
Profound global shifts
The first trend is the shift of economic activity and political
power from the West to the East and South. This is changing the
pattern of capital flows in the medium term, with more commercial
capital flowing to emerging markets, but also flowing from
countries such as China and India to Europe. This is creating a
multi-polar world, which fosters equality instead of dominance
The second trend is a shift in the pattern of poverty. Twenty
years ago, more than 90% of the world's poor lived in low-income
countries. That has fallen below an estimated 30% as the
countries inhabited by the poor have grown richer. The basis of
development cooperation is moving towards equality, with the focus
on developed and developing countries doing sound business together
and growth in private sector is now more important than official
The third trend is the continuing mismanagement of global public
goods, such as carbon emissions, water, forestry and fisheries.
With forecasted growth rates, and given the growing middle class in
emerging markets, we will need 2.3 planets in 2050 to sustain our
lifestyles. We cannot solve the problem by reducing (economic)
growth, because developing countries need economic growth to reduce
poverty. Instead, we need drastic changes in the way we all produce
I believe this third trend to be the most important in the long
term. And for FMO, it means that our activities should contribute
to the goal of nine billion people to live well within the means of
our planet by 2050 - assuring them of sufficient food, clean water,
sanitation, shelter, mobility, education and health.
Such factors explain our decision to add Agribusiness, food
& water as an FMO focus sector in 2011. The growth in the world
population, and the increasing middle-class population in
developing countries, means a relentless rise in food demand. The
agriculture industry is a major emitter of carbon dioxide and uses
75% of the world's ever-scarcer water supply, though the increased
productivity provides jobs for many people in developing
Sustainability is a must
Companies increasingly grasp the importance of sustainability.
Crisis or no crisis, they see more and more the vital need to take
their social and environmental responsibility, if they are to
retain their markets over the long term. FMO's role is to invest in
entrepreneurs who have a positive impact on economic growth and
reducing poverty, and who manage their impact on the environment,
and people responsibly.
Creating a sustainable planet demands true innovation and a
partnership approach, a dialogue.
To remain a front runner in development finance, FMO must
acquire, build and better share knowledge - both inside our bank
and with external partners. We need to remain innovative, both
devising new initiatives and introducing innovations from one
market into another. By using our knowledge and innovation to help
achieve successful projects in frontier markets, FMO can also
mobilize financing from others - one of our key strategic aims.
As our 2011 achievements show, we are well positioned as we
prepare to embark on a journey to ensure nine billion people can
live well within the means of our planet. I would like to thank all
FMO's employees for their achievements during 2011. Working in
partnership with all our stakeholders, I am confident that together
we will be able to grow our impact again in 2012.
Chief Executive Officer