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Questions and Answers

Why do countries develop PRSPs?

PRSPs are a requirement for countries in order to receive concessional assistance from the World Bank (through the International Development Association – IDA) and the IMF (through the Poverty Reduction and Growth Facility – PRGF). In addition, they are the basis for the provision of debt relief under the enhanced HIPC Initiative.

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How many countries are preparing PRSPs?

As a result of this approach and international concessional assistance from institutions such as the World Bank and the IMF, PRSPs are currently on the agendas of about seventy low-income countries around the world.

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Will the requirement of a PRSP affect the timing of concessional assistance from the IFIs?

To avoid delays for countries that do not have a fully developed PRSP in place, commitment to poverty reduction can be demonstrated by preparing an Interim Poverty Reduction Strategy Paper (I-PRSP).

An I-PRSP will need to include a description of the nature of the poverty problem and existing government strategies to tackle it, along with a timeline and process for preparing a full PRSP in a participatory fashion, and a three-year policy matrix and macroeconomic framework (of which the outer years would be tentative).

If a country requires more than a year between its I-PRSP and the full PRSP, reports on progress toward PRSP preparation need to be submitted for continued assistance.

Countries that qualify for debt relief under the HIPC Initiative have been among the first to develop both Interim and Full PRSPs.

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How often will a PRSP need to be revised?

PRSPs will need to be fully revised every three to five years. Annual Progress Reports are prepared each year to inform the society and the international community about changes in key poverty indicators and key developments on the policy front, and will be submitted to the Boards of the World Bank and IMF.

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What are the core principles underlying the PRSP approach?

There are five core principles underlying the development and implementation of poverty reduction strategies, which reinforce those of the Comprehensive Development Framework (CDF). The strategies should be:

  • country-driven, involving broad-based participation by civil society and the private sector in all operational steps;
  • results-oriented, focusing on outcomes that would benefit the poor;
  • comprehensive in recognizing the multidimensional nature of poverty and the scope of actions needed to effectively reduce poverty;
  • partnership-oriented, involving coordinated participation of development partners (bilateral, multilateral, and non-governmental); and
  • based on a long-term perspective for poverty reduction.

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Does a country need to write a separate PRSP if it has its own development plan?

For successful PRSP development, it is crucial to build upon existing strategies and plans wherever possible, both at the sectoral and the national level. In this context, existing national strategies or development plans that would have been prepared in any case, provided that these are consistent with the guiding principles of the PRSP approach, may well be considered to be the PRSP. For example, Uganda’s PRSP is its Poverty Eradication Action Plan which pre-dated the PRSP initiative. Further, a number of other countries have based their I-PRSPs largely on existing sectoral and national strategies.

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What are some elements of a PRSP?

The core principles underlying the PRSP approach suggest that PRSPs would be expected to include:

  • A description of the participatory process that was used: A PRSP will describe the format, frequency, and location of consultations; a summary of the main issues raised and the views of participants; an account of the impact of the consultations on the design of the strategy; and a discussion of the role of civil society in future monitoring and implementation.
  • Comprehensive poverty diagnostics: A good understanding of the poor and where they live allows the PRSP to analyze the macroeconomic, social, structural and institutional constraints to faster growth and poverty reduction.
  • Clearly presented and costed priorities for macroeconomic, structural, and social policies: In light of a deeper understanding of poverty and its causes, the PRSP sets out the macroeconomic, structural, and social policies that together comprise a comprehensive strategy for achieving poverty reducing outcomes. It is important that policies are costed and prioritized as far as possible so that they do not become a "wish list."
  • Appropriate targets, indicators, and systems for monitoring and evaluating progress: A PRSP will define medium and long-term goals for poverty reduction outcomes (monetary and non-monetary), establish indicators of progress, and set annual and medium-term targets. The indicators and targets should be consistent with the assessment of poverty and the institutional capacity to monitor, and the policy choices in the strategy.

While PRSPs are expected to provide an adequate overall treatment of each of these areas, the specifics with regard to content and focus will obviously differ substantially across countries.

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What have early country Interim and Full PRSPs shown?

The PRSP approach has always been envisaged as evolving progressively over time and with experience. Countries’ first full PRSPs, while essential building blocks for the approach as a whole, represent only the initial step in the process. While the quality of PRSPs is central to the success of the program, expectations for first PRSPs need to take account of individual country circumstances.

In many countries, the institutional capacities for undertaking poverty diagnostics, managing a participatory process, and formulating poverty-focused policies have limited the pace and quality of PRSP preparation.

The degree of participation in the preparation of strategies has varied widely among countries, depending on their political structures and traditions. Several countries have built on existing participatory processes in preparing Interim and Full PRSPs.

For the most part, I-PRSPs and PRSPs to date have focused on economic and structural policies to achieve higher growth rates and on social sector investments. Documents have also highlighted the importance of transparency, accountability, good governance, and empowerment of the poor in this process. The strength of the analysis has varied with: initial preparation capacity; availability of good, up-to-date data; and a clear understanding of expectations for I-PRSP/PRSP content.

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What is the link between the PRSP and World Bank/IMF operations?

The World Bank’s business plan for low income countries, the CAS (Country Assistance Strategy) will be based upon PRSPs after July 1, 2002. All Bank lending and nonlending activities in IDA countries will be organized under a CAS business plan responding to the PRSP. In the interim, the timing and sequencing of CASs relative to I-PRSPs and PRSPs will need to be decided on a case-by-case basis, but to the extent possible, CAS Updates and CASs will be timed to follow I-PRSPs and PRSPs.

With respect to lending operations, the Bank has developed Poverty Reduction Support Credits (PRSCs). PRSCs are a series of annual programmatic structural adjustment credits to support implementation of a country’s poverty reduction strategy with clear performance benchmarks, including results indicators and policy measures within the areas of the Bank’s primary responsibility. The series of PRSCs would be intended to cover the three-year life of the PRSP, would be synchronized with the government’s budget cycle, and would be embedded in the country CAS.

The IMF’s PRGF-supported program will derive from and reflect the overall growth and poverty reduction strategy, which itself should be based on fully integrated macroeconomic, structural and social policies. PRGF staff reports will need to reflect this integrated framework, building on much closer interaction between Bank and Fund staff and programs in support of the country’s strategy.

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What is the role of other donors and multilateral organizations?

Ideally, a country-owned poverty reduction strategy will enjoy the support of all of a country’s development partners, and will provide a common framework for their assistance programs in the country.

Thus far, almost all external development partners have expressed their strong support for the objectives and principles of the PRSP approach, their eagerness to work with governments in preparing strategies, and their intention to adjust their own programs to support these strategies. For example, the European Union decided to base its five-year assistance programs in African, Caribbean, and Pacific countries on PRSPs. Key bi-lateral donors, including the Netherlands and the United Kingdom, see PRSPs as playing a leading role in shaping their development assistance.

Many governments have begun to use the PRSP process as a means to improve aid coordination. To this end, certain countries have presented their strategies to donors (Burkina Faso and Uganda). They have also invited donors other than the IFIs to provide advice and assistance in preparation of better PRSs. In many cases, the I-PRSPs or draft PRSPs have been presented to formal Consultative Group meetings or Round Tables.

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What is the Sourcebook for Poverty Reduction Strategies?

The Sourcebook is a guide to assist countries in the development of poverty reduction strategies. Chapters are available on core techniques (poverty diagnostics, monitoring and evaluation, etc), on sectoral issues (health, education, infrastructure, macroeconomic policy), and on cross-cutting issues (gender, environment, etc.).

The Sourcebook has been prepared mainly by Bank and Fund staff and reflects their experience working in various sectors and regions. It has benefited from feedback provided by government officials in several African countries and from the staff of UN organizations. While the drafts have been reviewed by the heads of the relevant sectors at the Bank and Fund, they do not necessarily represent official World Bank/IMF policy.

It is important to note that the Sourcebook is intended only to be suggestive and to be selectively used as a resource to provide information about possible approaches. It does not provide "the answers". Those can emerge only as a result of analysis and dialogue at a country level.

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What are the challenges ahead?

The PRSP approach has tensions that were recognized from the beginning as inherent. The most important of these are the tension between quality and speed in preparing country strategies; and between country ownership on the one hand and Bank and IMF assessment of country strategies on the other.

The "quality versus speed" tension is related to two competing needs – the need to ensure that country-owned strategies are based on broad-based participation and effective analysis, versus the goal of moving forward quickly with strategy preparation so as to enable access to concessional assistance and debt relief. This tension is alleviated by the use of I-PRSPs, which do not require the participatory processes or the degree of analysis expected for full PRSPs. However, both countries and development partners have become increasingly concerned about the time required to move from I-PRSPs to full PRSPs. To give countries more time where needed, the Bank and IMF have recently modified the original expectation that a full strategy be completed within a year of I-PRSP preparation. In Cambodia’s case, for example, if the date for the full PRSP is going to be after December 2001, the government will need to submit a short progress report to the World Bank and IMF, providing a revised submission date and outlining the progress made to date since the I-PRSP.

The "ownership versus assessment" tension reflects two competing principles—that strategies genuinely reflect country priorities, but that the Bank and Fund ensure, on behalf of their shareholders, that concessional assistance and debt relief will be wisely used in a policy environment and for purposes that promote poverty reduction. This tension can be reduced by a constructive policy dialogue with countries, openness on the part of the Bank and IMF to countries’ "home-grown" approaches, and the exercise of good judgment in light of specific country conditions and international experience.

Finally it is recognized that the PRSP approach is based on an on-going iterative process and on "learning by doing" as the process evolves.

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Where can we read more about PRSPs? How can we access public documents, e.g., JSANs, I-PRSPs, PRSPs, etc?

The World Bank and the IMF both have external websites. They are as follows:

These sites are being used to provide information to, and seek comments from, all those who may be interested in the approach.

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Where can we get more information about HIPC and CDF?

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