Southern African Regional Poverty Network (SARPN) SARPN thematic photo
Regional themes > Poverty reduction frameworks and critiques Last update: 2020-11-27  

 Related documents

Forum Syd

The poverty reduction strategies: a survey of literature

Kenneth Hermele1

Forum Syd, Stockholm, Sweden

June 2005

SARPN acknowledges the Forum Syd website as the source of this document -
[Download complete version - 78Kb < 1min (17 pages)]     [ Share with a friend  ]


As of 1999, the need to alleviate poverty is seen as the central task of economic policy. Poverty reduction is stressed time and again in relation with international debt rescheduling schemes as well as in calling for increased flows of foreign aid. It is not the first time that the issue of poverty comes to the fore: already in 1973, Robert McNamara, who five years earlier had left the job as defence minister of the USA to become president of the World Bank, announced that the main task of the World Bank was to eradicated absolute poverty before the year 2000.2 But the unequal development of an increasingly integrated world continued, symbolized by the North reclaiming 10 USD in exchange for each dollar that it channels to the South in foreign aid.3

Finally, in 1999, the World Bank rediscovers that the fight against poverty remains a central concern, and the formulation of Poverty Reduction Strategies is made a condition for obtaining debt rescheduling in the Heavily Indebted Poor Countries Initiative, HIPC, which the World Bank and the IMF had been carrying out in 42 poor countries since 1996, the majority of which are located in Africa. Since then, a Poverty Reduction Strategy Paper, approved by the boards of the IMF and the World Bank, opens the doors to debt rescheduling as well as to increased flows of bilateral and multilateral aid.4 Today, PRSPs are being elaborated in close to 60 countries in Africa, Asia and Latin America as well as in East and Central Asia and other transition economies.5

Although they began as a HIPC requirement, a PRSP is today synonymous with the overall development strategy that the World Bank and the IMF are propagating globally. In this sense, PRSPs are following in the footsteps of the much criticized Structural Adjustment Programmes, SAPs, which now, after 20 years, are said to have been substituted by the much improved PRSPs.

  1. Kenneth Hermele, economist and author, with the Policy Unit at Forum Syd, Stockholm. Phone: +46 (0)739 49 45 64; e-mail:

  2. McNamara's goal for the World Bank, announced in a speech in Nairobi, was twice as radical as today's millennium goal, which only requires a reduction of poverty by half until the year 2015.

  3. This comparison comes from the UNDP and is frequently quoted by Civil Society Organisations, CSOs, as proof of an unjust world: the North is receiving ten times more than it gives out. However, these figures are based on comparing aid payments to the South - approximately 50 billion USD annually - with the "flows" in the opposite direction: interest and amortization payments, profit remittances from transnational firms, deteriorating terms of trade, and an estimate of the value of the "brain drain" going from the South to the North. In other words, the figures are not commensurate as they add up real financial flows with estimated non-financial figures.

  4. PRSP stands for the document approved by the World Bank and the IMF. By writing PRS - without the last "P" - one indicates a wish to apply a broader perspective, where poverty reduction is the purpose but without linking the policies to debt rescheduling or new loans. In this survey, the acronym PRSP stands for both meanings. I will also let the acronym IFI, International Financial Institution, stand for the World Bank and the IMF although there exist other international financial institutions, e.g. the regional development banks of Africa, Asia and Latin America.

  5. According to the latest figures on the IMF webpage, Factsheat - PRSP (2005-05-04). In their annual review of the PRSPs, the World Bank and the IMF state that in the middle of 2004, 42 countries were carrying out PRSPs, while another 34 countries were expected to formulate their PRSP in the near future. See IMF/World Bank (2004).

Octoplus Information Solutions Top of page | Home | Contact SARPN | Disclaimer