EU-LDC Network conference 2002
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Improving Global Governance for Development: Issues
and Instruments - 7-10 December, Chiang Mai
Session 2.2 - Poverty Reduction Strategy Papers
- Summary
The PRSPs have been initiated in 1999 by the World Bank and the
IMF in order to address the issue of poverty reduction through the
involvement of national governments and domestic stakeholders in
developing countries. The first speaker addressed the issue of PRSPs
in Africa, linking his presentation to a recent UNCTAD publication.
In contrast to previous strategies, country ownership and participation
have increased through the PRSP approach. However, there remain
a number of pitfalls such as time limits, lacking technical and
administrative capabilities, and a donor-oriented approach aiming
to secure development assistance from the international community.
Furthermore, the PRSP approach is criticised for the presumption
of the World Bank and IMF that open economies and liberalisation,
such as financial liberalisation, trade reform and agricultural
policies, directly benefit poverty reduction, without even including
proper assessment studies of the neo-liberal economic policies.
In education and health care too, the effects of the PRSP recommendations
(e.g. privatised secondary education and higher level health care)
raise doubts about the effectiveness of the suggested policies.
The speaker concluded that to make the PRSPs a success it is important
to match the approach with economic realities, i.e. the consideration
of a country’s resources to create a satisfactory paper. Also, it
is necessary to abolish the donor-biased approach in the PRSP. Furthermore,
there should be more room for impact analysis of policy recommendations
in the PRSPs. Finally, true participation and ownership of all stakeholders
within a developing country is a key issue in reducing poverty through
the PRSPs.
The second speaker discussed the Sri Lanka PRSP and put it in a
historical perspective. The importance of the agricultural sector
and limited migration to urban areas are characteristic for the
Sri Lanka economy. Indicators for human development are relatively
high for the South Asian country. However, poverty remains part
of the Sri Lanka economy and is a multifaceted problem. As a result
of outside pressures from development partners, Sri Lanka has in
some ways been forced to address the problem of poverty through
the multidimensional approach of the PRSP. This issue was also addressed
in the case of African PRSPs. The Sri Lanka PRSP has been completed
in June 2002. The armed conflict, slow growth, and unequalities
are, among others, identified as impediments towards poverty reduction.
The PRSP main message is that the government’s role is to create
an environment which stimulates the participation of all groups
of society in the realisation of economic growth. The government
should not try to directly stimulate the process of poverty reduction.
Cambodia is another interesting PRSP case since its PRSP is about
to be completed. Cambodia proposed the World Bank to submit an existing
report written under the umbrella of the Asian Development Bank
(ADB) as the PRSP. The report included an overall approach towards
the Cambodian economy. Several actors in Cambodia including Oxfam
US were consulted in the process. However, the World Bank demanded
that a new PRSP was to be written since the Banked wanted to include
more, different issues. The PRSP which followed was characterised
by a narrative approach. Oxfam preferred to have seen a more progressive
approach including clear recommendations to address poverty reduction.
Furthermore, there has been too little attention for local circumstances
such as the differences between urban and rural manufacturing, and
the role of the agricultural distribution system. How these systems
affect the poor in Cambodia has been a question left unanswered.
There is also criticism on the donor-biased view within the Cambodia
PRSP, as was earlier mentioned for the African and Sri Lanka PRSPs.
This leads to a situation where the PRSP process is not truly owned
by the national actors. There should be more involvement of local
officials and other organisations such as civil society groups.
If this can be achieved, PRSP will have a more profound, positive
influence on poverty reduction in Cambodia.
The fourth speaker addressed the issue of WTO accession in the
case of the Kyrgyz Republic which views the accession as a means
to stimulate economic growth and reduce poverty. The speaker argued
that the WTO accession has had more impact on the policy of the
country than the PRSP. Kyrgyzstan has been the first country of
the Commonwealth of Independent States (CIS) to join the WTO. The
accession negotiations have been the shortest ever. The main drive
behind the accession has been the president. The speaker pointed
at the lack of information on behalf of the Kyrgyz negotiators.
Expertise on the international trading system was limited. There
was little understanding into the question as to why the country
should join the WTO. It is necessary for developing countries to
answer this question first. Answering the question will increase
understanding of the effects of WTO accession. It will moreover
help to sell the idea of joining the WTO to the constituencies.
The fifth speaker in this session finally focused on the Country/Regional
Strategy Papers (CSP/RSP) of the European Commission. The CSPs are
different from the PRSPs since the European Commission’s documents
set out the EU policies towards a certain country or region. If
there are existing PRSPs for specific countries, then these are
often used as the base for the CSPs. There are similarities between
PRSPs and CSPs in the sense that both papers are aiming to improve
coherence between different policies, thus enhancing aid efficiency.
However, the issue of coherence in the CSPs is different from the
PRSPs. The speaker identified three steps to be taken within the
CSPs. The CSPs should first focus on coherence among development
policies in different fields, e.g. education, capacity building,
humanitarian aid etc. Secondly, the coherence issue needs to be
extended to development and other external policies, e.g. trade
policies. Finally, the coherence of internal policies such as the
internal market (including the CAP) also needs to be reviewed.
The
discussion focused on several issues which are relevant for the
success of PRSPs. Different participants stressed the need to secure
involvement from the private sector, democratic institutions and
NGOs, noting that concerning the latter it needs to be realised
that not all NGOs represent the interests of the poor. Conditionalities
and donor-biased approach in the PRSPs were also identified as crucial
factors in changing the success of PRSPs. Finally, capacity building
needs to be more emphasised within the PRSP approach.
Session 2.2 - Speakers
Chair: Debapriya Bahttacharya
Speakers: Samuel Gayi (UNCTAD), Manel Jayamanna
(Instcom), Simon Lacey (World Trade Institute), Kelly Brooks (Oxfam
America, Cambodia), Anders Berlin (European Commission, DG External
Relations)
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