SPECIAL TOPIC: **PHNIS** CONTRIBUTION TO THE BANK'S POVERTY ALLEVIATION OBJECTIVE

# CHAPTER III:

## A. **Background**

3.1 The 1990 World Development Report (WDR) documents the extent and impact of poverty around the world, and, drawing on the Bank's own experience of the last three decades, emphasizes that economic growth alone is not a sufficient development objective or adequate measure of success. It argues convincingly that investments in human resources contribute to increasing incomes and to the reduction of poverty. As time goes by, the real success of this WDR lies less in the documentation, dissemination and reanimation of this very important message and more in the significant way it has influenced and continues to influence both the content and approach of the Bank's work.

content of the sixteen operations approved in FY92.

## B. **Context**

3.3 The Bank's contribution to poverty alleviation efforts through its PHN sector must be evaluated in the proper context. The following section thus sketches out in a country setting: _what_ are the essential activities for successful and sustainable poverty alleviation, _who_ should be responsible for carrying out these activities, and _how_ these activities should be carried out. Only when these three elements are clearly laid out does the optimal role for the Bank begin to emerge.

### 1. _W7zat._

3.2 The 1990 WDR reaffirmed the Bank's commitment to poverty reduction as its fundamental objective, and was followed by a series of operational documents, which provide practical guidance in strengthening the focus on poverty reduction in Bank operations. The policy paper, _Assistance Strategies to Reduce Poverty,_ articulates a two-pronged strategy for sustainable poverty reduction: (1) the generation of incomeearning opportunities for the poor; and (2) the provision of basic social services to the poor to enable them to seize those opportunities. The strategy also calls for providing a social safety net for vulnerable groups during periods of adjustment. The _Poverty Reduction Handbook_ demonstrates good-practice analytical and operational work. Operational Directive 4.15 on _Poverty Reduction_ summarizes Bank procedures and guidelines for operational work on poverty reduction, emphasizing the importance of assessing country policies, reviewing public expenditures, and strengthening institutions in achieving that objective. This chapter will demonstrate just how well and to what extent PHN operations respond to the Bank's poverty alleviation objective, by analyzing the design and 3.4 In order to address and resolve poverty issues, a country needs to carry out four crucial and complementary activities. First, _information collection and analysis_ permits the identification of poor and vulnerable groups and provides essential information on their location(s), needs, constraints, demands and on why their needs and demand for basic social services are not being met. Second, a country's _policies, strategies and reform measures_ can be instrumental in reaching the poor and are a reflection of political commitment to poverty alleviation. Wellarticulated macro- economic and multisectoral policies that are oriented toward growth with poverty reduction will provide the framework needed to carry out poverty alleviation activity both within and outside of the PHN sector. The impact on the poor of PHN policies and priorities needs to be well understood by planners and policy makers. A re-examination and reform of PHN policies, financing and institutions in light of their impact on poor and vulnerable groups will permit improvements in access, quality, affordability, efficiency and effectiveness of PHN services, which will benefit poor and vulnerable groups.