World Banks Poverty Reduction Strategies - Essay Example

? World Bank’s Poverty Reduction Strategies World Bank’s Poverty Reduction Strategies Introduction Poverty Reduction Strategy during the year 1999 focused on establishment of guidelines that the World Bank and International Monetary Fund (IMF) would be following, while lending to poorest countries in the world. However, two years later, there was a conclusion of review of implementing poverty reduction strategies. There were numerous parties that made significant contribution to completion of this review; in fact, these parties included non-governmental organizations, World Bank and IMF. Moreover, this review featured a chance to acknowledge the process, which was enhanced on the basis of preliminary evidence that was available. In this case, there were numerous issues that had to be resolved and this gave rise to several questions, which were asked by NGOs. For instance, some of the hard questions to be asked related to assimilation of Poverty Reduction Strategy Paper (PRSP). In addition, this review sought to determine whether the process of implementing PRSP had met the expectation within stipulated administrative costs. This is a report focusing on assessing the changes that has occurred due to the implementation of Poverty Reduction Strategies through programmes established by World Bank and IMF. On the other hand, it will discuss the way poverty has been utilized as a facilitating Structural Adjustment Programmes (SAPs) among poor countries. In fact, this has resulted to a sever condition of their economic crisis. The World Bank and IMF have formulated strict policy focused on operations involving Bank Fund. For instance, they have focused on assortment of prescriptions that are merely classified as “good governance.” Nevertheless, there are international donors, who have complied with the Bank development models that is featured in PRSP. As a matter of fact, this has failed significantly during the years that it has been implemented in the Global South. Apparently, World Bank and IMF have been avoiding ways to tackle the problems that has contributed to failure of implementing Poverty Reduction Strategies. Instead, they focus on evaluating the PRSP process, thereby identifying chance of replicating favourable practices. In this case, these practices are emanated from the PRSP process that is considered helpful. Moreover, this process is far much better compared to other processes, which disregard poor people, thereby imposing solutions without reference to specific subject country; besides, there are instances where the processes are derived without consulting the counties receiving the funds. Therefore, PRSP has been evaluated by several NGOs, and this has given rise to a desire of determining whether the World Bank is still fixated to achieving their mission of eradicating poverty. Consequently, this leads to a substantial challenge in discussing the extent of implementing Poverty Reduction Strategy on the basis of policies implemented by the World Bank on the based on effects in the Global South. Poverty Reduction Strategy (PRS) A country’s macroeconomic condition is explained by the Poverty Reduction Strategies (PRS) and Poverty Reduction Strategy Papers (PRSP) (IMF-World Bank, 1999, 1). Moreover, Poverty Reduction Strategy features a structural and social policies, and programs that are focused on promoting growth as a way of reducing poverty. Therefore, PRS serves as a substantial source of financing countries that are languishing in poverty (Robb, 2000, 2). PRS are established by the governments of respective countries through their participation in the process, which involve civil society and necessary development partners. In fact, this process involves the World Bank and International Monetary Fund (IMF) (IMF-World Bank, 2001, 1). On the other hand, the PRSP is written by a given country thrice in a period of one year. However, the content entailed in the PRSP varies from one country to the other; through they all share a similarity of covering the government period. Amendments are made in the PRSP through the Annual Progress Report; in fact, this report is aimed at analyzing the process of implementing the PRSP and the extent to which various objectives have been achieved in a given country (IMF-World Bank, 1999, 1). Furthermore, necessary documentation of the process evaluation report is made available to the public through the government website, and this involves an agreement with the member country. Implementation process of the Poverty Reduction Strategy has been reinforced as a trend, especially soon after it was initiated by the IMF and the World Bank. In this case, this reinforcement has been focused on encouraging government to focus on their poverty reduction strategies, thereby making fundamental effort of raising their social expenditure (Abugre, 2000, 21). Therefore, development of reinforcing of poverty reduction strategy has been considered an agenda among countries that live in under low incomes. There are countries that are beneficiaries of debt relief under improved (Highly Indebted Poor Countries) HIPC Initiative. In the case, the resultant Poverty Reduction Strategy paper has been substantially supported by the World Bank and the IMF; in fact, this is considered a basis of concessional help from these institutions. There was a proposal made during the initiation of Poverty Reduction Strategy Initiative at September 1999, during an annual meeting by the World Bank and the IMF. These proposals were owned by the countries involved in implementation of poverty reduction strategies, thereby forming a basis of the entire World Bank and IMF concessional leading. Therefore, these strategies were taking shape of the papers referred to as Poverty Reduction Strategy Papers (Robb, 2000, 2). In this case, this led to establishment of the process referred to as the PRSP process; besides, this process was fundamentally considered a way of implementing a set of guidelines or principles, which were to be adopted by the World Bank in eradicating poverty. Nevertheless, these principles were referred to as Comprehensive Development Framework; though their relationship with the process of implementing PRSP has been considered confusing. However, there is need to rethink the Framework, which is considered a destination and PRSP to be a specified route to be followed in the process of implementing Poverty Reduction Strategies (Robb, 2000, 2). Integration of HIPC and prescription of PRSP has led to significant implications to the sovereignty of the economy among countries that are low income earners (IMF-World Bank, 1999, 10). Governments that are borrowing have been bound by SAPs and PRSPs, whereby they have to implement policies formulated by the World Bank and IMF (Abugre, 2000, 22). Apparently, this becomes the only way they can meet the conditions for benefiting from this credit and the support from the World Bank and other bilateral donors. Evidently, the conditions proposed by the World Bank and the IMF entail an experience, which is more powerful compare to the national laws due to being indebted and constrained. Therefore, governments in the borrowing countries end up lacking an alternative of accessing development funds. On the other hand, there are vital national policies associated with trade, investment, social development, judicial systems, assets ownership, fiscal management and banking, which are determined by the World Bank and the IMF (Walther, 2002, 3). Apparently, in these countries, the World Bank and other donors pressures them more through their policies compared to domestic priorities. In several countries, the World Bank and the IMF has set policy requirement for debt relief and credits, which has ended up affecting the civil society, the government institution and the parliament in a significant way, thereby causing disputes. Structural Adjustment Program (SAP) There was a report, which was released by the World Bank on June 2001, and it entailed a two decade of structural adjustment lending. Initially, the Structural Adjustment Program was meant for assisting countries that are out of short term balance of payment problems (The World Bank, 2001, 1). Moreover SAPs were established with an aim of evolving the social, structural and reforms in various sectors of a country. SAPs were meant to set pace for 191 adjustment initiatives among 64 counties, which were approved in 1980s; in fact, these countries had depicted mixed performance records (The World Bank, 2000, 1). Nevertheless, there were principal findings obtained from the retrospective and subsequent research, whereby the reforms that were involved could be implemented after owning the country itself. Therefore, during the initiation of SAPs, the World Bank had ended the five year tripartite review regarding its exercise that was referred to as the Structural Adjustment Review Initiative (SAPRI). SAPs were declared by the World Bank to be a major mistake; in fact, this was not acknowledged until there was a major weakness of SAPs identified during the early 1990s (The World Bank, 2001, 1). Evidently, it was known to all that there was a drawback caused by Structural Adjustment Review Initiative (SAPRI) in the process of elaborating the weakness of establishing more policies through World Bank involvement (Abugre, 2000, 23). There was a significant divergent caused by the impact of SAPs from elements of SAPRI in the civil society; besides, this resulted to a more comprehensive critique. Therefore, this is an indication that the bank failed to understand or acknowledge the magnitude of the problems that were supposed to be addressed in terms of the policy based lending. On the other hand, there was an assessment, which was undertaken by the Structural Adjustment Participatory Review International Network (SAPRIN) (Walther, 2002, 3). This review resulted to creation of SAPs entrenched continuing cycles of inequality and impoverishment; though there were expectations of acquiring efficiency, competitiveness, profits, and savings from the IMF and the World Bank. However, their prescribed macroeconomic policy was not realized; in fact, the extent of these learning was constrained and absorbed by the World Bank, while it was also shared among the involved governments. References Abugre C., 2000. Still Sapping the Poor: A Critique of IMF Poverty Reduction Strategies. ISODEC, World development Movement: London IMF- World Bank, 1999. Poverty Reduction Strategy Paper- Operational Issues, Retrieved 24 Nov 2013 from: IMF-World Bank, 2001. Guidelines for Joint Staff Assessment of Poverty Reduction Strategy Paper, Retrieved 24 Nov 2013 from : The World Bank, 2001, Adjustment from Within: Lessons from the Structural Adjustment Participatory Review Initiative. Retrieved 24 Nov 2013 from: The World Bank, 2000, Poverty Reduction Strategy Papers Internal Guidance Note. Washington, DC: World Bank Operations Policy and Strategy Robb C., 2000. Participation in Poverty Reduction Papers: Africa Department. International Monetary Fund, August 2000 [Accessed Online on 24 Nov 2013] Walther M., 2002, “Lessons from the Analysis of the First Five Full PRSPs, PRSP: New Name or New Beginning?” WEED Working Paper, Bonn/Berlin. [Accessed Online on 24 Nov 2013] Read More