Growth Promotion vs. Poverty Reduction

Abstract

1. For about ten years after the end of the cold war regime, the World Bank, in parallel with the IMF, was engaged in rethinking about its economic aid policy toward the developing countries, and at the end of the 1990s, a conclusion was reached. Its policy, or its economic development strategy, was thus far characterized by“growth promotion”of the recipient developing countries taken as its goal and the framework of the aid policies evolved to achieve that goal. The new policy has shifted its goal to“poverty reduction”, and the policy framework geared to it containing new methods and contents. Thus after July 2002, all kinds of the concessional aid of the World Bank are to be conducted on the basis of the new policy. In terms of procedure, the same new policy is to be reflected in a document called Poverty Reduction Strategy Paper (PRSP) which should be prepared by the recipient governments and approved by the Board of Directors at the World Bank before starting the concenssional aid.