Transcript No Slide Title

PRSPs – relevance, progress & private
sector participation.
EBRD/DFID Learning Event 9/9/03
Origins of the PRSP Idea
Mixed record on poverty
reduction in 1980s & 1990s
(SSA, Transition Economies,
post-1997 Asia)
Findings on aid effectiveness
Pro-poor policy reforms failing
because of lack of real country
commitment
Donors often part of the
problem
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Multilateral funding for debt
relief
E-HIPC needed a ‘vehicle’ to
link debt relief, poverty
reduction & delivery of MDGs
Key Elements
• Country leadership of the policy process
• Opening-up to new forms of participation
• Comprehensive national development
strategy linked to macro & fiscal framework
• Making links between policy commitments &
results
• New incentives for monitoring & evaluation
• New partnership possibilities & new forms of
aid delivery
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Where’s the value added?
4

Increased Government accountability for progress
towards pro-poor goals (this includes growth & PSD)

Less focus on external accountability towards donors &
more focus on building robust national systems for
policy formulation, execution, monitoring & evaluation

By permitting stakeholders to see and think through the
implications of a set of policies, there is the prospect of
a more informed national dialogue on trade-offs and
policy choices for both growth & poverty reduction
Facts & Figures
• PRSP initiative now three & half years old
• 65 low income countries are engaged
• 28 have produced ‘full’ PRSPs (with JSA’s
endorsed by WB-IMF Boards)
• 37 are in the process of producing a full PRSP
or in a few cases an i-PRSP
• Vast majority of PRSP countries are in SSA; 12
are in former Soviet Union/Eastern bloc
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Experience to date
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• Poverty analysis
informing PRS priorities
• Policy detail still has limited
pro-poor focus
• Participation is leading
to greater openness
• Participation tends to be
broad rather than deep
• Improved prioritisation of
key public actions
• Prioritisation & costing still
work in progress
• Links with other reform
processes beginning
e.g. PEM/MTEF/CSR
• Integration of PRSPs into
MTEFs & annual budget has
a way to go
• New donor
arrangements are
emerging
• Rhetoric still ahead of reality
in many cases
Consultative Processes

Latest WB progress report notes increased participation
of private sector in PRSP formulation – but quality
highly uneven & coordination of inputs freq. absent.

Formal private sector organisations & associations
more likely to be engaged than informal sector groups

Participation varies from informal engagement in
consultation meetings to formal mechanisms such as
regular sector or thematic working groups & publicprivate dialogue groups

A key criticism from stakeholders has been that some
policy areas are not sufficiently open to public debate –
the macroeconomic framework in particular.
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Content of Policy Frameworks
• All PRSPs emphasise primacy of accelerating
growth for poverty reduction, most stress PSD
Growth/PSD
• Increased number draw attention to sources of
growth, microeconomic constraints & risks
• But choice of priority actions still not derived
from identified growth sources & risks
• Treatment of trade symptomatic of weak links
between strategic goals & priority public
actions
Key Public Actions
• Improving the investment climate – regulatory
environment, financial sector & infrastructure
• Increasing the assets of the poor – productivity,
service delivery, legal fws & anti-corruption
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Improving the Investment Climate
Percentage of PRSPs identifying as a priority area
9
Improving macro stability
91
Supporting SMEs
76
Infrastructure
76
Governance & Corruption
71
Regulatory environment
67
FDI
67
Trade Policy
67
Finance
62
Legal System
62
Increasing Assets of the Poor
10

Agricultural research & extension

Rural infrastructure /irrigation/electrification

Land tenure reforms in rural & urban areas

Financial services – micro-finance etc.

Judicial reforms

But, bulk of policy measures still emphasise improved
social services as key route to increasing the assets of
the poor
PEM & Monitoring Issues
• Connections between spending priorities &
annual budget/MTEF process still evolving
PEM
• Weaknesses in costing public actions have
repercussions for prioritisation
• Recent study by WB in ECA found significant
weaknesses in PEM systems, especially in
budget formulation
• All PRSPs identify PEM reforms as critical
Indicators
• Coverage of indicators & baseline data is
improving, selectivity now critical
• Range of PSD indicators, although good
practice less evident in this area
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What are Donors Doing?

Increased evidence that PRSPs are a key point of
departure for many donor strategies

Much talk of alignment of donor instruments &
processes with PRSP ‘cycle’ & related national budget
cycle (SPA, OECD/DAC, WB & Fund )

Tangible shift towards general budget support amongst
some donors in SSA – although still a relatively small %
of total ODA.

Much emphasis on lining up capacity building/TA
support, diagnostic & analytical work with PRSP
agenda (CFAAs, CPARs, PSIA, etc)
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Building more effective public-private
dialogue – why?
• Improved decision-making grounded in better
understanding of real business needs & appropriate scope
of public action
• Increased transparency – provides a boost to Govt.
credibility with domestic & foreign investors
• Context for promoting public-private partnerships in priority
areas – infrastructure (economic & social), agriculture etc.
• Shared ownership of reform strategies – better prospects
for effective implementation
• Increased private sector awareness of policy context,
poverty issues & corporate social responsibility?
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Getting the Conditions Right
• Important to reach a common understanding of the
appropriate role of the public & private sectors
• Ensure realistic objectives from the start given the
economic & political context – be clear about
expectations
• Build on existing consultative frameworks, BUT ensure
participants represent all sizes of enterprise, including
entrepreneurs from disadvantaged areas or groups
• Encourage private sector bodies to consider the ‘wider
policy context’
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Areas for Dev. Partner Support

Sector wide analyses of constraints to PSD through
seminars & workshops timed to feed into national
strategy formulation

Studies of investment climate, firm-level surveys, microfinance sector strategies to support the work of sector
or thematic working groups

Support for public-private consultation bodies, incl.
strengthening analytical capacity.

Support private sector participation in PRSP Technical
Committees/Working Groups/PER processes e.g.
Kenya
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