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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

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The Poverty Reduction and Growth Facility (PRGF): a blind alley

Source: Social Watch

This article proposes to analyse if the Poverty Reduction and Growth Facility (PRGF) has represented a change in focus and in policy, in comparison with the Structural Adjustment Programme (SAP) and the Enhanced Structural Adjustment Facility (ESAF) which preceded it. eoliberalism, which as been the political and conceptual support for the structural reforms promoted during the last two decades in Bolivia and in the majority of the other countries in the region, has understood poverty and actions to reduce it as a separate field of action from that of the direction of economic policies with respect to income distribution. Under this logic, macroeconomic and social policies should be based on the dominance of market forces so as to achieve not only efficiency in resource allocation, but also to achieve economic growth, seen as the only path to sustainability.

Although the emphases of social policy have varied, throughout the process the idea of ‘trickle-down’, which supposes that the social conditions of the population will improve as a quasi-“natural” result of economic growth, has prevailed. Taking into consideration the poor results of the ESAF with reference to poverty reduction, the World Bank and, later, the IMF, have developed in recent years the proposals of Growth and Poverty Reduction Services and Poverty Reduction Strategies.

The first part of this article demonstrates that these proposals continue to analyse poverty within the framework of the neoliberal model’s own logic - thus confusing the structural causes of social phenomena with their uperficial expressions - and, in consequence, will have results which are little difference from those of the ESAF. The second part proves that the proposal of the International Monetary Fund and the World Bank, concerning the participation of civil society in the formulation of policies (including ose in the macroeconomic field), is largely talk with little practical impact.

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