PANOS - Is the Worldbank's Strategy to Reduce Poverty Working?
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NEWS RELEASE - 12/9/02
Newspeg: September 25-29 - World Bank / IMF annual meetings, Washing-
ton DC, USA
REDUCING POVERTY: IS THE WORLD BANK'S STRATEGY WORKING?
Three years after the World Bank and International Monetary Fund
(IMF) introduced their Poverty Reduction Strategy (PRS) approach as
the latest template for the world's poorest countries to get out of
poverty, a new Panos report examines the progress so far and the ar-
guments about whether PRS can succeed.
For over 70 countries producing a Poverty Reduction Strategy Paper
(PRSP), approved by the World Bank and IMF, is either a condition for
getting debt relief, or a condition for receiving concessional loans
and some aid. Since their introduction, PRSPs have been widely wel-
comed as the first serious attempt by the international community to
put poverty reduction at the centre of development planning and fi-
nance and for embedding principles of countries "owning" their own
development strategies. They have also been criticised by some non-
governmental organisations (NGOs) as being merely a new name for
Structural Adjustment Policies (SAPs) - the prescriptions of the 80s
and 90s for opening economies and reducing government expenditure
which failed to reduce poverty and allowed the gap between rich and
poor to widen.
Governments are required to develop their PRSPs with the participa-
tion of civil society. This has led to dialogue between government
and civil society organisations on priorities for government spending
- dialogue which in many countries has been a new and valuable ex-
perience for both sides, even though it may be hesitant and imperfect
at first. Governments are encouraged by the PRSP to commit themselves
to poverty reduction and to focus on widely agreed basic factors for
helping people out of poverty - generally education, health and rural
infrastructure. PRSPs are also starting to establish a new transpar-
ency, in which government budgeting and expenditure can be scruti-
nised by parliaments and public. The World Bank and IMF believe that
this is a crucial factor in accountable and democratic governance, in
itself a necessity for a government committed to reducing poverty.
But some PRSP critics charge that the whole approach is fundamentally
flawed. It is based on the premises that economic growth is the first
step towards reducing poverty, and that this is achieved by opening
economies to world markets and reducing government expenditure. These
premises are also those of SAPs, which failed in the past. The crit-
ics hold that liberalisation in fact often increases poverty, and
that the evidence that it leads to economic growth is unconvincing.
Many countries' PRSPs are based on predictions for growth which are
unlikely to be realised - even the World Bank and IMF, in their own
review of PRSPs earlier this year, admitted that many countries have
given little detail about how they expect to achieve the high growth
rates needed.
Yet the World Bank and IMF, and governments (under the influence of
the IMF, according to critics) are not allowing debate and alterna-
tive views on these fundamental questions of economic policy. The
participation in economic policy-making to which civil society is be-
ing invited in the PRSP process is strictly limited.
For PRSPs to succeed, there will need to be a strong sense of commit-
ment and "ownership" by governments and people. This report, which
draws on specially commissioned reports from Lesotho, Ethiopia and
Uganda, points out that so far this sense of ownership is not very
strong - partly because countries have not paid enough attention to
the potential role of the media in informing people and stimulating
engagement.
The report is available in Adobe pdf or text format on the Panos Lon-
don website:
http://www.panos.org.uk/briefing/reducing_poverty_front.htm
--
Claudio Schuftan
Hanoi, Vietnam
mailto:aviva@netnam.vn
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