1.1 What is PRS?
The abbreviation “PRS” stands for Poverty Reduction Strategy, which is a concept developed by the World Bank and the International Monetary Fund (IMF) in 1999. The idea behind this was that low-income, highly indebted countries should develop and formulate a national plan on how to reduce poverty in their country and improve the living situation of their citizens. Once a country has established a national PRS, it can apply for debt relief from the World Bank, the IMF and donor countries, and may gain access to new credits, loans and grants.
Various national stakeholders participate in the formulation of this strategy and draw up their own Poverty Reduction Strategy Paper (PRSP) accordingly. The final version should reflect overall stakeholder consensus. PRSPs also provide a roadmap indicating the priority actions that need to be taken in order to achieve poverty reduction. The PRS approach is becoming increasingly important, since it is not an isolated tool used just by the World Bank and the IMF, but is also supported by other international development partners, and is linked to international and national strategies and policies. Today, PRS processes can be found in almost 70 countries worldwide.
Chapter 5 presents the origin and the basic principles of the PRS approach.