• PRSP, CAS and PRSC: Basic definitions
• How can OVC issues be reflected in PRSP and CAS, and what steps could be followed?
  
  

The consultative processes that are involved in the preparation of a country’s multi-year Poverty Reduction Strategy Paper (PRSP) or the Bank’s Country Assistance Strategy (CAS) are important opportunities to incorporate the needs of Orphans and Vulnerable Children (OVC) as a priority in a country’s medium term development plan. Development Policy lending, including Poverty Reduction Support Credits (PRSC) can later support the implementation of pro-OVC policies established in an IDA country’s PRSP or CAS (of course, pro-OVC policies can also be supported with other lending and non-lending instruments).

Definitions

Poverty Reduction Strategy Paper (PRSP): In September, 1999, the World Bank and the IMF agreed that nationally-owned participatory poverty reduction strategies would provide the framework for all concessional credits and grants offered by their respective institutions, including debt forgiveness under the Heavily Indebted Poor Countries (HIPC) Initiative. Five core principles should be followed in developing and implementing poverty reduction strategies:

• country-driven – involving broad-based participation by civil society and the private sector;
• results-oriented – focusing on outcomes that benefit the poor;
• comprehensive in recognizing the multidimensional nature of poverty;
• partnership-oriented – involving coordinated participation of development partners (bilateral, multilateral, and non-governmental);
• based on a long-term perspective for poverty reduction

The PRSP itself, produced through several months of consultations, should include four key sections:

• a description of the participatory process that was used to develop the strategy;
• a comprehensive poverty diagnostic, which uses existing data to describe who the poor are and where they live;
• a clearly presented and costed set of priorities for macroeconomic, structural and social policies that together comprise a comprehensive strategy for achieving poverty reducing outcomes;
• appropriate targets, indicators, and systems for monitoring and evaluating progress.

The PRSP process includes several opportunities for participation:

• Poverty diagnostics, based on qualitative and quantitative analysis, identify the situation, constraints, and priorities of the poor, bringing to light the multi-dimensional nature of poverty and can be used to determine the causes of poverty and the potential impact of growth and public actions on the poor and vulnerable. This helps enhance the quality of the poverty reduction policies developed and gives poor people a voice in the policy-making process.
• Participation in budgeting and public expenditure management gives citizens an opportunity to influence how government allocates its resources to carry out priority objectives.
• Developing a set of indicators and monitoring country progress toward these indicators helps advocacy groups track progress.

Country Assistance Strategy (CAS): the CAS document:

• describes the World Bank Group’s strategy for working with a country based on an assessment of priorities in the country and the Bank’s comparative advantage, and
• indicates the level and composition of assistance to be provided based on the strategy and the country’s portfolio performance.

The CAS is prepared with the government in a participatory way and is likely to reflect the government’s priorities as outlined in the PRSP. Nonetheless, there may be differences between the country’s own agenda and those of the Bank. The Bank routinely conducts a Joint Staff Assessment (JSA) of the adequacy of a country’s PRSP and its implementation, the conclusions of which are incorporated into the CAS.

If a country has not yet gone through the PRSP process, the Bank will encourage the government to conduct stakeholder consultations of civil society and the private sector. The CAS also draws upon relevant Economic and Sector Work (ESW). It provides a thorough discussion of major issues in the country, including a sound diagnosis of the incidence, trends, and causes of poverty, based upon a Poverty Assessment.

Poverty Reduction Support Credit (PRSC): is a form of Development Policy Lending. This type of lending does not finance specific investments, but instead finances overall country budget execution. PRSCs support a country’s policy and institutional reform program to implement its poverty reduction strategy (as described in the PRSP). A PRSC typically involves a series of two or three individual credits that together support the country’s medium-term development and reform program to implement its poverty reduction strategy. The time horizon of the PRSC ideally corresponds to that of the PRSP and CAS. PRSCs are usually disbursed based upon an agreed set of actions. Some PRSCs focus on economy-wide policies, while others may address policy or institutional issues within key sectors, such as health, education or rural development. As a budget support credit, PRSCs often focus on reforms to improve the quality of budget management and execution. PRSC documentation describes the likely social impact of the reforms supported by the Bank.