IMF/WORLD BANK sanctimony exposed

Palash Kamruzzaman

The World Bank and IMF have proposed the Poverty Reduction Strategy Paper (PRSP) framework for all poor countries as a condition of receiving unconditional debt relief under the HIPC Initiative. The PRSPs will also be the key vehicle for the World Bank and IMF and other donors for various assistance packages, including loans. Like its predecessors, the PRSP framework promotes the ideas of ‘participation’ and ‘ownership’. The ownership of such a grand framework cannot possibly rest with the poor countries or their people if the whole idea is the product of World Bank and IMF think-tanks. In discussing the development of Bangladesh’s PRSP neither participation nor ownership was the target in preparing a national poverty-reduction strategy: they were merely necessary components of a document required for the continuation of debt and lending relationships with the World Bank and IMF.

Introduction

Recent thoughts on poverty and poverty reduction seem ‘big’ in terms of ideas, units of analysis, global measurement of poverty, and the scale of planned policy intervention This ‘grand approach’ has taken large communities and groups of people – entire countries with populations of millions – as the common units of analysis to assess and understand poverty. A similar approach has been adopted in the Poverty Reduction Strategy Paper (PRSP) framework proposed by the World Bank and the IMF in 1999. Rather than an epic and philanthropic discovery, the PRSP framework should be understood as the latest approach in the poverty-reduction strategies of international financial institutions (IFIs) for their client countries. It is associated with a previous series of approaches, such as the Highly Indebted Poor Countries (HIPC) Initiative, Country Assistance Strategy (CAS), Participatory Poverty Assessment (PPA), Poverty Action Plan (PAP), and Comprehensive Development Framework (CDF).

There is a constant attempt to characterise PRSPs as a country-owned and government-led process. Widespread agreement about the PRSP framework can be found among the IFI boards on key issues to ensure local ownership. First, a growing sense of ownership has been suggested as a guiding principle for the preparation of a PRSP. Government authorities should draft the PRSP, which will ensure and reinforce country ownership. The IFI boards also agree on a more open dialogue between governments and at least some part of the civil society. Such agreements show that it is the World Bank and IMF that are not only suggesting the PRSP framework but also prescribing how PRSPs should be prepared and how ownership can be ensured. However, it also appears (especially in the added emphasis) that, as a criterion, participation does not necessarily have to come from the widest possible sectors of society – rather, it is a means for claiming local ownership of the PRSPs.

The expectation is that participation by civil society in developing and implementing PRSPs will provide a sense of broad-based ownership, not only by the government, but also by civil and political society. Translating these expectations into operational recommendations, the PRSP framework can advocate participation by poor people in poverty analysis, prioritisation of public actions to be addressed in the strategy, and the monitoring of governments’ delivery of poverty-reduction commitments. The World Bank has made approval of PRSPs conditional in principle, on acceptable participatory processes. However, the Bank has not specified what constitutes an acceptable participatory process, which raises questions about its intentions regarding the real ownership of these documents.

The PRSP framework itself is problematic, because it purports to promote local ‘participation’ to ensure ‘ownership’, while the whole idea and need for a PRSP has obviously been generated by the IFI think-tanks, not by the client countries or the poor people concerned. However, ‘ownership’ of the PRSPs cannot possibly rest with the client countries, because ultimately it is the IFI boards that have the power to reject or endorse any PRSP, and hence have ownership of the document. Furthermore, the idea of ‘country ownership’ is confusing (and illusory) while the World Bank and IMF have in various publications outlined the tentative contents, good practices, and expected nature of participation.

In considering participation in the PRSP framework in relation to previous poverty reduction strategies promoted by the World Bank and the IMF, the framework contains nothing new, and the agenda for its application to all indebted poor countries is questionable.

In discussing the participation process in the development of Bangladesh’s PRSP, one sees that little attention was paid to ensuring genuine participation by the poor and by civil society to create ownership of the document. Rather, the claims of participation in the Bangladesh PRSP appear to be more concerned with fulfilling donor criteria than about representing the actual situation of poverty and people’s perception of the poverty-reduction policy.

Similar patterns have been observed in sub-Saharan Africa, Latin America, and Asia. One cannot therefore but conclude that while the idea of participation has been invoked in the name of ensuring ownership of local poverty-reduction strategies, neither participation nor ownership was the primary objective of the PRSP framework. Rather the framework serves to continue the hegemonic relationship between the World Bank, IMF, and poor countries, whereby the latter have no better choice than to prepare one more policy paper.

THE POVERTY REDUCTION STRATEGY PAPER SERVES TO CONTINUE THE HEGEMONIC RELATIONSHIP BETWEEN THE WORLD BANK, IMF AND POOR COUNTRIES

Why (participatory) PRSPs?

The impact of the World Bank’s new prescription for reducing poverty has been massive. By March 2006, 52 countries had completed their final PRSPs and 11 more had prepared Interim PRSPs (IPRSPs). In other words, these poor countries have conformed to the idea of developing a national poverty-reduction strategy in order to continue to receive loans and other assistance from the World Bank and IMF. These countries had never thought of such frameworks before they were proposed by the Bank and Fund. Rosemary McGee (2002) examined participation in the PRSP process in sub-Saharan Africa and found that it relied on poorly conceived, rushed, exclusive, and badly organised consultation procedures. The minimal engagement in the PRS process by political actors such as members of the national assembly or members of parliament is also true across much of Asia. Despite hopes that participation in the PRS would lead to better policy making and greater accountability, there is little evidence to date of the impact of participatory processes on the timetable or content of Asian PRSs. The PRSP process in Bolivia has given rise to serious misgivings about optimistic assertions that externally imposed participation by civil society will trigger better political performance and more accountability, more ownership, and increased effectiveness. But the donors’ ‘one size fits all’ approach gave the Bolivian government the freedom to organise the process in a way that diluted the impact of civil-society involvement and diverted attention from the fundamental problems that hamper the performance of the political system. In Uganda and Vietnam, governments have selected the parties with whom they consult, and thus prevented the process from becoming a source of contestation about government policies and state authority. In Georgia, the lack of institutionalised politics and the politicisation of key aspects of civil society meant that there was relatively little space for meaningful contributions from non-government actors during the PRSP process The Nicaraguan PRSP was drawn up by technocrats in accordance with donor directives; even within the government, ownership was limited. The strategy was approved in Washington despite strong evidence that it was only a piece of paper, and that the government did not take poverty reduction seriously (Dijkstra 2005). Dijkstra further argues that the consultation process in Honduras was seen as an improvement over earlier governance practices which restricted the agenda and left civil-society organisations (CSOs) feeling that their concerns were not sufficiently reflected in the strategy. Nevertheless, the first principle of the PRS approach is that it be country-driven and country-owned, on the basis of broad-based participatory processes. Yet these concepts are not always clearly defined. The World Bank and IMF staff lack precise criteria by which to judge success in this area and mainly want to be satisfied that the government has made a genuine effort to involve civil society. In many cases, different stakeholders have very different expectations regarding the participatory process. This points to the importance of communicating the goals of the process from the outset, in order to avoid its credibility and legitimacy being undermined by expectations that may prove impossible to fulfil. For example, participation does not imply final consensus or guarantee that views garnered through participatory processes will necessarily be reflected in the final programmes.

Local participation not free and spontaneous McGee (2002) found that essential information was often not provided to participants, inadequate time was allowed for them to analyse drafts before commenting on them, and there was a lack of transparency in selecting participants in the first place. In most cases, participation in the PRSP process has been led by governments, who seemed to be concerned about how much they should ‘listen to’ the poor and to what extent, and how the views of the poor should be incorporated and interpreted in the PRSPs, while also following the guidelines, principles, and good practices suggested by the IFIs. Although the Bank and Fund suggested broad-based participation by all relevant stakeholders to ensure local ownership of these documents, their own reviews did not find this in reality. The Joint Staff Assessment (JSA) found that the role of Parliaments in the preparation, approval, and monitoring of country strategies has generally been limited. Various concerns have been expressed about the lack of involvement of specific groups in the participatory process. While the patterns differ across countries, CSOs that were out of favour with the government, local government officials, private sector representatives, trade unions, women’s groups, and direct representatives of the poor are among the groups that have not always been fully involved in the PRSP process.

It was also expected that the development of PRSPs would improve the partnerships and coordination among countries and donors. Until mid-2001 a number of donors were frustrated by their own lack of involvement in the process, many of them feeling that it was dominated by the World Bank and IMF. These donors pointed out that they were unable to engage jointly in the dialogue with government during Bank and Fund missions, as they felt that Joint Staff Assessments (JSAs) drew the government’s attention away from alternative views. Such findings by the initiators of the PRSP framework underline that local participation was not free and spontaneous, but dominated and directed by the Bank and Fund.

This leads us to ask why ideas such as ‘participation’ and ‘ownership’ have been pushed so repeatedly. What is the rationale for proposing a new framework and preparing a PRSP? Why have some poor countries completed their PRSPs, while other Papers are still in the pipeline?

The obvious answers to these questions lie with the intentions of the World Bank and IMF in introducing the PRSP framework, which starts with the premise ‘that there is a strong link between debt relief and poverty reduction and debt relief is an integral part of broader efforts to implement outcome oriented poverty reduction strategies. By completion of PRSPs, countries should get unconditional debt relief under HIPC Initiative’. There is no fundamental difference between the PRSP approach and previous IFI poverty reduction frameworks, as the following discussion shows.

Country Assistance Strategies (CAS) were national strategies that were expected to be developed through broad-based consultation and participation. CAS aimed to ensure clear and strong connections between lending and non-lending activities and the poverty-reduction strategy and impact. They were aligned with a framework that required brief reports on the main characteristics of poverty and its determinants; trends over time; links between growth and poverty reduction; the impact of macro-economic policies and of government programmes on the poor; access to services and programmes; and the main dimensions of vulnerability.

In 1991, the World Bank indicated that it would be carrying out Poverty Assessments as a key component of analytical work in all borrower countries, to strengthen the link between the Bank’s assistance strategy and the countries’ own efforts to reduce poverty. The purpose of a participatory poverty assessment (PPA) was to create space for the voice of the poor in providing a deeper understanding of the dynamics of poverty and regional contextual characteristics, the coping mechanisms adopted by the poor, and local perceptions of problems and priority interventions .

The PPA also aimed to promote participation in poverty assessments (PAs) beyond the level of the primary stakeholders (the intended beneficiaries) to include the secondary, or institutional stakeholders in civil society and government. In seeking to introduce a participatory element into the more conventional poverty analysis, the PPA was not a discrete research process, but was designed to produce results ‘that can help to complement, inform or validate conclusions drawn from other kinds of more traditional Bank analysis’

(To be continued in the next issue)

Palash Kamruzzaman graduated in Anthropology from Jahangirnagar University in Dhaka and is a Teaching Fellow at the Department of Sociology, University of Leicester. He is at pk166@le.ac.uk

Reproduced from ‘Poverty Reduction Strategy Papers and the Rhetoric of Participation’ by Kamruzzaman Development in Practice Vol.19:1 pp.61-71

(Taylor & Francis Ltd, http://www.informaworld.com , reprinted by permission of the publisher)