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5.7 The Poverty Reduction Strategy Paper process: Working Out of Poverty

Guest post by: International Labour Organization

Article Overview: The ILO experience

5.7 The Poverty Reduction Strategy Paper process: Working Out of Poverty

The preparation of PRSPs is a learning process for all concerned: governments,
employers’ and workers’ organizations, the Bretton Woods institutions
and development banks, the ILO, United Nations specialized
agencies, bilateral donors and, most importantly, people living in poverty
and the various forms of community organizations they choose to adopt.
Generally, the ILO’s experience of participation in the PRSP process has
been fairly, although not universally, positive. 31 Governments have welcomed
offers to help provide specific technical inputs in ILO areas of competence
and the promotion of consultation with employers’ and workers’
organizations.

The ILO is different from other specialized agencies in that it combines
both the provision of technical inputs in important areas – rights, employment
and social protection – and support for the participatory process
through tripartite consultations. ILO experience in a number of countries
suggests that this aspect of PRSPs is becoming more widely appreciated and
embedded in political systems. The World Bank, the IMF and many recipient
and donor countries are beginning to include civil society consultation
and participation in poverty reduction strategies. Rather than being a costly
waste of time as some feared, this is becoming an important means of improving
the analysis of the incidence and causes of poverty, and the effectiveness
of poverty reduction strategies.

The ILO has encouraged governments to invite employers’ and workers’
organizations to join fully in all phases of the PRSP process. However,
in some cases the social partners have expressed concern and frustration that
their views and potential support appear undervalued. There are a number
of explanations for this, including the following:

● Many low-income countries are under enormous pressure to produce
PRSPs in order to be eligible for World Bank/IMF loans, debt relief
and grant funding. In recent years the donor community has put great
emphasis on medium-term expenditure planning, as well as public sector
reform and improved macroeconomic management. Given their
limited capacity to develop a comprehensive strategy quickly, external
demands to focus on these areas have made it difficult for countries to
address other objectives, such as decent work and employment creation,
which constitute high political priorities for them.
● The traditional conduit for the views of social partners into government
policy-making is the Ministry of Labour. However, in many countries it
plays a relatively minor part in the PRSP process, which is still a heavily
budget-oriented intra-governmental process, dominated by finance and
economy ministries.
● The emphasis on the participation of civil society organizations (CSOs)
by the international community can cause difficulty in that few trade
unions and employers’ organizations identify themselves with this relatively
new all-embracing term. Furthermore, other CSOs sometimes do not think of unions and employers’ organizations as part of their movement.
32
● In some countries, governments prefer not to engage with trade unions
and/or employers’ organizations that have a history of openly challenging
or opposing the government, and have deliberately sidelined them
in the PRSP process.
● Some World Bank and IMF officials are unfamiliar with the work of the
social partners and have not felt the need to prompt government PRSP
teams to seek their involvement, despite encouragement to do so from
their own senior management.
● A few workers’ organizations have preferred not to become involved in
what some regard as a continuation of previous stabilization and adjustment
policies to which they were opposed. Many others also share these
concerns but are trying to change the policy framework by active participation
in the PRSP process. Some workers’ and/or employers’ organizations
have limited their engagement, either because they
question the real value of the participation process or because they
have other priorities that override their involvement in PRSP processes.

Despite the scope for PRSPs to draw on previous analysis and policy
development work by the ILO, the first wave of interim and full PRSPs in
2000 and 2001 were, in the main, disappointingly meagre in their coverage of
decent work issues. In part, this probably reflects the relative absence of labour
ministries and the social partners from the consultation processes for
the drafting of the first PRSPs. It may also arise from the lack of prominence
given to the gender dimension of poverty.

Whilst public expenditure in vital areas such as education and health is
of great significance to poverty reduction, the larger question of how to generate
pro-poor sustainable growth is not yet fully integrated into deliberations
surrounding most PRSPs. This should change as PRSPs evolve, and the
ILO expects more attention to be given in future to the fundamental question
of how to raise the productivity of the working people living in poverty
and the returns they get from their labour. This is inextricably linked to the
broader issue of moving equity and redistribution further up the policy
priority list alongside emphasis on growth and social expenditures.

Experience to date has shown that the contribution of the ILO’s field
structure is vitally important to full participation in PRSP dialogue. Regular
and frequent contact – and ideally a presence in a country – is essential in order
to take full advantage of formal and informal networking opportunities.
The challenge is for the social partners to take on much of the advocacy role
associated with the ILO’s objectives on PRSPs, but in most low-income
countries this will require substantial support for capacity building. Overall,
the ILO’s four overarching concerns as the PRSP process moves from design
to implementation are as follows:
● PRSPs need to include a more thorough analysis of employment and
other aspects of decent work. This should lead to a more explicit conclusion of the four strategic objectives of decent work in poverty reduction
strategies.
● Employers’ and workers’ organizations and labour ministries need to
be more systematically integrated into the participatory process underpinning
the design and implementation of PRSPs. Without social dialogue,
the participation and national ownership principles of the PRSPs
are seriously undermined and decent work strategies are unlikely to receive
adequate consideration.
● PRSPs need to give more attention to maximizing the impact of sustainable
growth on poverty. This should lead to greater focus on issues such
as reform of land rights, development of a fair, efficient and effective
fiscal policy, and the integration of the informal economy into mechanisms
for the governance of markets that promote enterprise and
employment.
● Donor countries must include in their funding priorities issues related
to employment and enterprise creation, social protection, rights, representation
and dialogue, promotion of tripartism and other poverty reduction
policies on which the ILO has expertise.

The ILO has undertaken PRSP-related activities in a number of other
countries in addition to the five special focus countries mentioned above, especially
in Africa, where the policy environment is so closely aligned to the
development of PRSPs. The New Partnership for Africa’s Development
(NEPAD) now provides a continental framework to which the ILO is contributing
with its Jobs in Africa programme.

As the ILO’s work on PRSPs becomes more widely known, there is an
increasing call on its limited resources from additional countries. The ILO
seeks to respond positively to these requests to provide support to PRSP
processes both at the design stage and, increasingly, at the stage of implementation,
and has put in place internal organizational arrangements to ensure
a coordinated and consistent approach. As well as the technical
expertise we are able to offer, one of the most appreciated contributions is
knowledge of how other countries with similar problems are addressing the
challenge of eradicating poverty through promoting decent work.

In so doing, the ILO will continue to stress the importance of an integrated
perspective on poverty reduction centred on decent work and drawing
on the wide range of its technical cooperation initiatives in many
countries. There will also be an increasing need to build the capacity of the
social partners to enable them to participate actively in monitoring the implementation
of PRSPs and to develop general guidelines to help field offices
and the social partners make the most of the opportunity to engage in
PRSP dialogue. Although donors have expressed an interest in supporting
the ILO’s work in the PRSP process, this will require further funding. Integrating
decent work programmes with the PRSPs of low-income countries
will enhance the visibility and impact of the ILO contribution, strengthening
the ILO’s influence in the policy dialogues and partnerships at many levels,
including with the Bretton Woods institutions, donors and other development
organizations.

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Article Tags: bilateral donors, bretton woods institutions, causes of poverty, community organizations, competence, consultations, costly waste, debt relief, development banks, donor community, donor countries, explanations, ilo, imf loans, low income countries, number of countries, poverty reduction strategies, social partners, technical inputs, waste of time



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