Partnerships

ILO Contact: A. Berar Awad

Poverty Reduction Strategies

The ILO is working to ensure that employment and decent work issues are addressed as an integral part of the economic and social analyses and policies comprising PRSP initiatives. The exercise provides a framework in which the ILO can work together with its constituents to introduce the decent work agenda into the development and poverty reduction process, as well as contributing, through social dialogue, to broader participation and national ownership of these processes. ILO technical and field units are working together to reach a better understanding of how to contribute to these processes.

The ILO is developing its support to a large number of member States on this issue. It initially gave particular attention to five countries (Cambodia, Honduras, Mali, Tanzania and Nepal) in order to assess how to maximize its contribution to the process, and is now developing its approach further with a number of additional countries (Ethiopia, Ghana, Indonesia, Pakistan and Yemen). This involves preparing, in close collaboration with the national authorities, an analysis of the role of employment and of the various elements comprising decent work in poverty alleviation, and organizing tripartite meetings in the countries to discuss the Poverty Reduction Strategy Papers.

The ILO recently chaired the UNDG Group on Poverty Reduction Strategies, to produce "An Assessment of the Role and Experience of UN agencies in the PRSP". This formed the basis of the UNDG's revised Guidance Note for Resident Coordinators that supports the (pro)active participation of the United Nations Country Teams in their engagement in PRSPs.

Background

In 1999 the decision was taken to link the newly enhanced Heavily Indebted Poor Countries Debt Relief Initiative (HIPC), the World Bank’s concessional financing through the International Development Agency (IDA), and the IMF’s concessional financing through the Poverty Reduction and Growth Facility (formerly the Enhanced Structural Adjustment Facility), clearly to the goal of poverty eradication. In order to achieve this, it was decided that all these financing decisions at the country level would be subject to the preparation of an acceptable Poverty Reduction Strategy Paper (PRSP) which would provide the basis for their debt relief decisions and their lending to low-income countries.

The common core of this new approach includes –

making poverty reduction the overarching objective of development policies;
adopting a comprehensive view of development that incorporates financial, economic, structural, social and environmental objectives;
accepting the need for prior assessments and continuous monitoring of the impact of economic policies on poverty;
emphasising participatory approaches to policy formulation and implementation;
national ownership.

The PRSP process is country-driven, developed transparently with the broad participation of elected institutions, stakeholders, civil society and key donors, including regional development banks, and has a clear link with agreed international development goals. These are the same priorities and concepts that underlie the World Bank's Comprehensive Development Framework (CDF) launched by the President of the World Bank in January 1999. The CDF stresses that economic, financial, structural, social and environmental issues must be addressed equally in an integrated framework and that countries themselves will be firmly in the driver's seat with respect to policies and programmes affecting them, and where the ultimate objective is the eradication of poverty. National ownership of this process is supported with assistance for improved governance and strengthened participatory approaches.

The Poverty Reduction Strategy Paper is prepared by the member country in collaboration with the staffs of the World Bank and the International Monetary Fund (IMF), as well as civil society and development partners. The papers describe the country's macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs and major sources of financing. The country documents are available on the World Bank and International Monetary Fund websites by agreement with the member countries.

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