PRSP dangers exposed again

1 April 2003

As in Bangladesh and Pakistan (see Bretton Woods Update 32), civil society groups in Sri Lanka have rejected the current Poverty Reduction Strategy Paper (PRSP). This is because, as stated by the Alliance for the Protection of Natural Resources and Human Rights, the PRSP has been drafted without any consultation of civil society and differs very little from previous IMF recommendations. The Alliance gathers more than a hundred groups including peasants and fisheries workers, trade unions, religious groups and people threatened with displacement. The government unveiled its PRSP last June at the Development Forum, saying it had been prepared after a comprehensive consultation process. Members of the Alliance have attempted to find out the identities of the groups consulted, but with no success. Trade unions, for example, were not made aware of the PRSP until the ILO held a workshop about it in July. Last summer the government also attempted to pass a series of laws reflecting the priorities highlighted in the PRSP and aiming at securing new IMF and Bank loans by the end of 2002 (see Bretton Woods Update 30). The timeline has since been pushed back and the executive boards of the Fund and Bank will now meet in April to endorse the PRSP. The Alliance has issued a statement seeking international support and asking donors to halt approval and implementation of the PRSP until it can be redrafted based upon full civil society participation.

While most donors have broadly endorsed the PRSP approach, critics are more sceptical than ever about its capacity to achieve its stated objectives. A new report by Focus on the Global South argues that “poverty is used as window-dressing to peddle more or less the same adjustment programmes to low income countries that led them into a state of chronic economic crisis to begin with”. Donor coherence around the PRSP is perceived as a danger-Focus warns that “if bilateral donors put all their eggs in the PRSP basket, they must then take equal responsibility for the impacts of bad policy advice, faulty assessments and failed programmes”.

In an attempt to assess the IFIs’ involvement in the PRSP approach, the IMF‘s evaluation office (IEO) and the Bank’s evaluation department (OED) are carrying out a joint evaluation of the PRSP process to date. While the OED will focus on the Bank’s role, the IEO will also look at the first concrete outcomes in terms of poverty reduction. Country visits, some of them joint, will include Tanzania, Mozambique, Nicaragua, Guinea, Tajikistan and Vietnam.

Bretton Woods Project has produced an updated version of its “ABC to PRSPs” – the “PRSP Rough Guide”

Endorse the Alliance’s statement

Sri Lanka PRSP

A Poor Package for Poverty Reduction, Focus on the Global South

OED and IEO evaluations

Heaven or Hubris: Reflections on the ‘New Poverty Agenda’

South Asian PRSP processes slated, Bretton Woods Update 32