Poverty Reduction Strategies - a way to achieve the MDGs?

Addis Ababa, 14 April 2006 - A recent meeting in the Egyptian capital Cairo has again put the spotlight on the ability of national poverty reduction strategies (PRS) to help African countries attain the Millennium Development Goals.

The high level conference, which brought together African ministers and senior officials, was held as the "first generation" PRS came to an end and provided a timely opportunity to assess their effectiveness and look ahead to the "second generation".

The PRS were first introduced in 1999 as an initiative of the World Bank and IMF to make public actions in low income countries more effective in reducing poverty. The initiative was based on country ownership, broad-based participation, paying attention to results and aimed at providing a framework for aid management.

But an independent evaluation for the World Bank last year said the initiative had not yet fulfilled its potential to enhance poverty reduction efforts in poor countries. "Countries have focused more on completing documents which gives them access to resources, than on improving domestic processes," the report noted.

"Most PRSPs [poverty reduction strategy policies] to date have focused on public expenditures and [have] not considered the full range of policy actions required for growth and poverty reduction," it added. "External partners have supported PRSP formulation, but neither donors nor the Bank have defined specifically whether or how they should change the content of their programs to reflect PRSPs."

The Cairo meeting - which was jointly organized by ECA and the African Union - concurred that the PRS had fallen short of expectations particularly in balancing social concerns with the productive sectors.

The meeting's outcome statement expressed deep concern over rising poverty in many countries, persistent spatial and gender inequality, increasing income inequality, and volatile and inadequate growth. Africa's efforts to achieve the MDGs would be hampered unless countries took measures such as increasing per capita income growth, and improving ownership, leadership and accountability in their national development strategies.

The independent study meanwhile urged the World Bank to do more to help countries understand which actions would give them the greatest poverty pay-off in their particular circumstances.

The Bretton Woods institutions, while acknowledging the varied outcomes of the PRS, stress that the initiative has focused attention on country-specific constraints to development. They also say that the approach is now seen as the country-level operational framework for progress towards the MDGs.

So, looking ahead to the next generation of PRS, policymakers at the Cairo meeting called on governments to implement "bold national policies" to attain the MDGs. Development strategies should be based on national requirements, rather than on a donor-influenced agenda, they noted.

In particular, participants pledged that the second generation of PRS would be instrumental in achieving the MDGs. Core areas such as education, infrastructure, the private sector, gender, science and technology would be boosted in a bid to reach the goals. And, according to the outcome statement, the next generation should be "sufficiently growth-oriented, reflect a good balance between social and productive sector investments, and firmly based on the MDGs".

The meeting also stressed the importance of debt cancellation and urged the international community to deliver on aid pledges. African countries were encouraged to pay particular attention to issues such as good governance, peace and security, regional trade and investment.

In his closing speech to the conference, ECA's Executive Secretary Abdoulie Janneh called for an end to "parallel and duplicative institutions" that could "threaten the legitimacy" of fledgling democracies in Africa.

"Parallel institutions and mechanisms erode the legitimacy of elected institutions and reduce the willingness of these institutions to accept ownership of the strategies and to be accountable for the outcomes," he warned.

[Click here for outcome statement:

http://www.uneca.org/prsp/cairo/OutcomeStatement.htm]