Press Release No. 03/173

Press Release: Second Regional Conference on Poverty Reduction Strategies Communiqué, October 16-18, 2003, Phnom Penh, Cambodia

October 20, 2003

The Second Regional Conference on Poverty Reduction, held in Phnom Penh, Cambodia, focused on ways to accelerate poverty reduction in low-income countries in the region. More than 150 participants from six East Asian countries—Cambodia, Indonesia, Lao People's Democratic Republic, Mongolia, Timor Leste, and Vietnam; and five observer countries—Bangladesh, Bhutan, Nepal, Papua New Guinea, and Sri Lanka attended.

Delegations included a mix of government and civil society representatives, as well as parliamentarians and academics. It was sponsored by the Asian Development Bank (ADB), the International Monetary Fund (IMF), the United Nations Development Program (UNDP), and the World Bank, and involved many key development partners.

In his opening address, H.E. Samdech Hun Sen, Prime Minister of the Royal Government of Cambodia, stated, "For the Royal Government of Cambodia, the war on poverty is not just a policy, but a passion. Poverty reduction defines and drives the substance, the content, the heart and soul and entire strategy of our Government. Poverty reduction is not just a requirement of social justice, an action of conscience, but also pragmatic economic management."

The forum provided participants the opportunity to share experiences and to exchange lessons as part of the learning process, as stakeholders reviewed experiences in designing and implementing pro-poor policies. Many countries in the region have completed their first poverty reduction strategies, and have made important gains in making policies more pro-poor and processes more participatory. They now face a range of challenges relating to implementation, and the discussion focused on governance, pro-poor growth and meeting the Millennium Development Goals (MDGs)—a set of goals pledged by world leaders to halve poverty, and all its ill effects by 2015.

An important element of continued progress will be more effective partnerships. Development partners today are more focused on achievable, measurable steps to reduce poverty, bringing many other voices into the consultation process, and recognizing that no strategy will work unless the Government and people own it fully.

Delegates agreed that good governance is essential for poverty reduction. Important in this respect are: participation, transparency, decentralization, budgets linked to policies, and improved service delivery.

"The `big bang' introduction of decentralization in Indonesia promises to improve local participation and accountability, and to reduce regional disparities," said Dr. Bambang Bintoro of Indonesia.

Delegates emphasized the importance of broadening participation to ensure that the voices of the poor are heard, and in that context called for greater involvement of legislators in the implementation of the Poverty Reduction Strategies.

"Each society must look to its own values to promote a more humble and sober way of life, and to challenge the greed of a few that underlies the poverty of so many," said Ms. Chea Vannath, Center for Social Development, Cambodia.

Delegates highlighted the importance and challenge of coordinating and integrating poverty reduction strategies with core national planning and budgeting in order to enable effective implementation. Linking medium-term expenditure frameworks and budgets to actual outlays is equally important. This was especially emphasized by H.E. Madame Khempeng Pholsena of Lao PDR.

Each country emphasized the need to build capacity to meet immediate and longer term needs to improve services for the poor. Ms. Aicha Umar Bassarewan of Timor Leste reported important strides in this area. As a new country, Timor Leste faces human and financial resource constraints in managing transition from emergency to longer term process of development.

"Our strategy has a new approach to poverty reduction. Previously the focus was on income and social security programs, now our poverty reduction efforts will be supported by pro-poor growth, structural reforms at the macro level and ensuring sustainable human development," said Ms. Tsendorj Bumkhorol, of Mongolia.

Each of the countries highlighted their success in reducing poverty while maintaining macroeconomic stability, which is essential for pro-poor growth. The need for realistic budget frameworks, with adequate flexibility to help meet shocks, was seen as a key element of successful implementation. However, there is much that is not yet understood about how to generate pro-poor growth, and advancing knowledge in this area is crucial.

It was agreed that since the majority of poor people live in rural areas, investing in rural development and agricultural productivity—roads to markets, schools and health facilities, telecommunications, improved access to technology, and training—are priorities. H.E. Ngy Chanphal of Cambodia said that his country's investments in rural roads have reduced travel time, increased access to services—especially those provided by NGOs and government—and have improved economic opportunities and competitiveness of local farmers and local businesses, although substantial challenges remain.

Delegates explored other ways to sustain rapid growth, in particular, how to take advantage of trade opportunities. Regional experience suggests that while local transport costs need to be tackled to increase competitiveness, it is also critical to diversify the export base beyond narrow sectors like garments. There were also strong calls for rich countries to reduce their barriers to poor country exports, and to advance multilateral trade agreements.

The need to address and integrate gender issues was raised by many delegates, consistent with the findings of a regional conference on gender and Poverty Reduction Strategies in Siem Reap, Cambodia.

The Millennium Development Goals are of critical importance, providing benchmarks to measure progress in reducing poverty and promoting human development, and in mobilizing political commitment. East Asia is at the forefront of regions in the developing world in meeting the goals. Some goals, in particular income poverty and primary education, appear well within reach, while health and environment present much greater challenges.

Poverty reduction strategies form the operational framework for enabling countries to meet the goals, and countries like Cambodia and Vietnam, are tailoring them to specific circumstances. Mr. Phuc of Vietnam demonstrated how localization of the MDGs has involved different time frames for goals, such as income poverty, where the country had already made substantial progress, as well as adding new indicators, such as governance measurements. Countries have made substantial investments in systems for regular monitoring of progress towards meeting the range of poverty reduction goals, but challenges remain.

The forum highlighted the role of poverty reduction strategies as a common roadmap for all development partners but country experiences showed the need for accelerated progress in this area. In particular, much more needs to be done to coordinate and simplify external assistance, and ease the reporting burden on limited local capacity.

A recurrent theme throughout the three days was that countries and their partners are striving for a new, more effective partnership to boost growth and reduce poverty in its many dimensions. The forum was a useful opportunity for all partners to get together and discuss how to carry forward the poverty reduction strategy process and meet the challenges of implementation.

For more information on the conference, including agenda, background documents, papers, etc, please see:

http://www.imf.org/external/np/prsp/2003/eng/101603.htm