Three Priorities for Fighting Poverty

Poverty is not merely a lack of money; it has many other dimensions that require a comprehensive approach in helping poor people. The World Bank's strategy to reduce poverty, outlined in the "World Development Report 2000/2001", is based on three broad priorities:

Promoting opportunity. No country has made rapid and sustained progress in reducing poverty without robust economic growth. The Bank and others in the international community are working with developing countries to help them achieve faster rates of growth, while providing poor people with the resources and skills to pursue the opportunities that result.

Giving voice to poor people. Poor people need to be active partners in the effort to reduce poverty. Their voices need to be heard more clearly by the institutions and agencies that are trying to help them. The Bank and its partners are working closely with developing countries to help them build open and accountable institutions, with better information sharing between people and their governments.

Enhancing poor people's security. In recent years, climate change, growing environmental problems, instances of terrorism, the spread of HIV/AIDS, and commodity price shocks have increased the risks facing all countries, slowing their growth and the pace of poverty reduction. Together with its partners, the Bank is supporting developing countries' efforts to protect their people from these risks, and when needed, to help reduce their impact.

Improving how the Bank does business

To put this three-pronged strategy for poverty reduction into action, and to be more effective, the Bank has made important innovations in how it does business. These changes are embodied in the Comprehensive Development Framework, which is built around a few simple principles—a long-term vision, country ownership, partnerships, and a focus on results.

The Bank recognizes that many past assistance efforts, including some of its own, have failed because donors drove the agenda. Now, it is helping governments to take the lead in preparing and implementing development strategies that are "owned" by the country.

Because the poor are deprived of opportunity, voice and security, long-term approaches are needed. These should address issues such as growth, governance, and social protection by relying on a mix of investments and policy reforms.

Together with its partners, the Bank is sharpening its focus on results—moving beyond lending figures, to measure real improvements in the lives of poor people. To do this, governments, civil society, the Bank, and other aid partners are working to strengthen the ability to measure, monitor, and manage development processes in order to achieve better results.

The principles behind the Comprehensive Development Framework are not new and many of them were already guiding the Bank's country relationships in the 1990s. But by bringing them together in a unified framework and encouraging their use more widely, the Bank is seeking to improve how it supports countries in getting better development results.

Supporting poverty reduction strategies in the poorest countries

Since 1999, the World Bank and the International Monetary Fund have sought to put the Comprehensive Development Framework principles into practice in low-income countries using the Poverty Reduction Strategy (PRS) approach. A national poverty reduction strategy is prepared by the country and provides a framework for donors to better coordinate and align their programs behind national priorities.

The government consults a wide cross-section of local groups and combines this with an extensive analysis of the poverty and economic situation. From this, it determines its own priorities and targets for reducing poverty over a three to five year period. Countries are also encouraged to use the poverty reduction strategy to address the Millennium Development Goals in the context of their own national aspirations. The Bank and other aid agencies then align their assistance efforts with the country's own strategy—a proven way of boosting their effectiveness.

By December 2003, 19 low-income countries had prepared interim or preliminary strategies, 35 had completed their full plans, of which 12 had produced annual progress reports on the implementation of their strategies.

With greater country ownership and a stronger commitment to poverty reduction, the approach has facilitated more openness in policy-making, bringing parliaments into the strategy preparation process, along with previously excluded groups such as civil society and the private sector.

Developing a long-term vision in countries facing very difficult development situations, such as those affected by conflict, has also been helpful in overcoming entrenched differences between key parties and in building a wider consensus around longer-term priorities and goals.

Helping middle-income countries reduce poverty

Middle-income countries have an annual income of about $750 per person or more. Many of them, such as Brazil, Morocco and Romania, also face entrenched poverty, particularly in certain regions and among some social groups. As a result, middle-income countries are home to about two-thirds of the world's poor, who live on one dollar a day or less.

Many of them have for some time been preparing national strategies that incorporate the principles of the Comprehensive Development Framework, while others have only more recently begun to apply this approach to their development strategies and their relationships with the Bank and other partners.

A long-term vision and a more participatory approach has been helpful for many of these countries in complementing economic policies with deeper institutional reforms, and in setting priorities for policies and investments that are increasingly aimed at poverty reduction.

The World Bank works with many middle-income countries in designing and implementing policies that help poor people contribute to economic growth and share in the benefits. This includes helping governments to: deliver services to poor regions and traditionally disadvantaged groups; create fair and transparent court systems and public institutions; and strengthen efforts to protect poor and vulnerable groups from economic and climatic shocks.