PHA-Exchange> PANOS - IS THE WB'S STRATEGY TO REDUCE POVERTY WORKING?

[Aviva]

From: "Mark Covey" <MarkC at panoslondon.org.uk>

> NEWS RELEASE - 12/9/02
>
> Newspeg: September 25-29 - World Bank / IMF annual meetings, Washington
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 arguments 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 welcomed as the first serious
> attempt by the international community to put poverty reduction at the
> centre of development planning and finance 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 participation 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 experience 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
> transparency, in which government budgeting and expenditure can be
> scrutinised 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 critics 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 alternative views on
these
> fundamental questions of economic policy. The participation in economic
> policy-making to which civil society is being invited in the PRSP process
is
> strictly limited.
>
> For PRSPs to succeed, there will need to be a strong sense of commitment
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.
> - ends -
>
> The report is available in pdf or text format on the Panos London
website -
> <http://www.panos.org.uk/briefing/reducing_poverty_front.htm>
> http://www.panos.org.uk/briefing/reducing_poverty_front.htm.
>