1. PRSPs – Emerging Lessons & Issues for Asia Asia Programme Managers Meeting Delhi, May 21 st 2002

2. 2 Origins of the PRSP Idea Mixed record on poverty reduction in 1990s (Africa, Transition economies, post-1997 Asia) Findings on aid effectiveness – projects, policy conditionality, ownership International Development Targets/MDGs Multilateral funding for debt relief (HIPC II)

3. 3 Country-led/owned based on broad-based participation Comprehensive – macro, structural, social Long term perspective Results-oriented Costed & prioritised Partnership-oriented Core PRSP Principles

4. 4 What’s new? ‘Costed’ poverty reduction strategy linked to macro & fiscal framework Outcome focused; making the links between policy & results Opening-up the policy process to participation New incentives, new partnership possibilities & new forms of aid delivery

5. 5 Relevance in Asia? Vast majority of poor people still reside in Asia Pro-poor policy framework linked to resource envelope has broad relevance Joining-up macro, structural & social policy a challenge everywhere Donors role secondary to domestic constituencies

6. 6 But context matters Important differences between Asia & other regions and within Asia itself: Poverty trends & history of anti-poverty programmes Politics, planning and institutions Country size and federal states Debt, aid dependence & experience of IFIs Principles rather than Paper or Process

7. 7 Asia Update Vietnam Cambodia Bangladesh Pakistan Nepal Indonesia Lao PDR East Timor India China Myanmar? Afghanistan? I-PRSP (Due )PRSP (Due) PRGF/PRSC Apr-Jun 02 Jan-Mar 03 Apr-Jun 02 Oct-Dec 02 July-Sept 02 Apr-June 02 Jan-Mar 03 PRGF/PRSC PRGF PRGF* PRGF PRGF* PRGF PRGF* * New PRGF arrangement Country

8. 8 ‘Global’ Highlights PRSs beginning to provide focus for allocation & use of domestic & external resources Policy priorities increasingly backed by analysis of poverty & linked to outcomes Some opening of the ‘policy space’ to broader participation by domestic constituencies ‘Proto’ linkages with other reform processes (budgets/MTEFs, sector strategies) New institutional & donor arrangements

9. 9 Ongoing Challenges Links to other national planning processes Role of MoF vs. other central/line ministries & devolved authorities Feasibility of targets, relevance of indicators, appropriate monitoring strategies, risk analysis Sustaining participatory policy processes Donor coordination / alignment of instruments Countries under stress/poor performers

10. 10 What does this mean for DFID? Active corporate/country level engagement in all aspects of the PRS process Move towards greater programmatic/budget support where PRS processes are strong Increasingly separating financing & influencing Longer term commitments to provision of aid Working more multilaterally New/different skills

11. 11 Challenges Ownership vs. conditionality Short term results vs. long term perspective Central (federal) vs. provincial (state) level working Balancing between: Strengthening poverty impact of policy Allowing for flexibility viz. country specifics Meeting fiduciary/risk management concerns Joining-up with other donors and within HMG