ANNEX 6

Poverty and Social Aspects

OVERVIEW

This year’s QEA sample consisted of 19 adjustment and 66 investment operations. Of these, 3 were considered not applicable for poverty and social aspects due to the technical nature of the operation. Furthermore, projects were classified into three categories of focused, inclusive, or enabling, and different benchmarks were used to assess projects in each category.[1]

KEY FINDINGS

The satisfactory rating for poverty and social aspects in QEA6 of 90% shows a return to the long-term trend of improving ratings despite the dip to 80% in QEA5 (see graph), which involved a smaller sample of 50 projects.

  • Improvements from last year were registered in all regions except for MNA, and in three networks (HDN, PREM and INF).
  • Poverty diagnosis received a satisfactory rating of 90%. However, there is a lag between poverty diagnosis and design, which was rated at 82% satisfactory (51 out of 62 investment projects), based on the extent to which the operation’s design was derived from poverty analysis.
  • Quality of monitoring arrangements for poverty and social impacts improved slightly over earlier years (80% satisfactory rating this year compared to 53% in QEA5, and 73% in QEA4), although this remains one of the weakest aspects of project quality. Arrangements for evaluating impacts and measuring poverty and social outcomes was 76% satisfactory or better.
  • Social safeguard ratings continued to improve, with 100% satisfactory ratings for involuntary resettlement (90% in QEA5) and cultural property. The satisfactory rating for indigenous peoples dropped to 93% from the previous 100% ratings for QEA2-5, but this was due to one project out of 15 in the QEA6 cohort that involved indigenous people. However, assessment of poverty and social risks received less attention than safeguards, being rated 85% satisfactory or better.
  • There was a significant improvement in consideration of gender issues in project design, but monitoring of gender impacts needs to be improved. Out of 68 projects, 55 received satisfactory ratings on gender issues (80%), which was an improvement over the last 2 years (69% in QEA4 and 66% in QEA5). However, only 58% of these projects included monitoring of gender impacts.
  • This year, 19 investment projects used CDD approaches. These projects were found to be better in designing mechanisms for M&E of project impacts, with a satisfactory rating of 95%, compared to 74% for non-CDD projects.
  • 20 projects in this year’s cohort are emergency operations. The satisfactory rating on analysis of social risks in these emergency operations is lower at 79%, compared to the 86% average rating for the 51 non-emergency types of projects.

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DISCUSSION

Strong poverty diagnosis but weak in design. There is a gap between poverty diagnosis and design. The satisfactory rating on poverty diagnosis of 90% can be attributed largely to references and more explicit linkages to poverty analyses conducted by other Bank supported activities (e.g., PRSPs, Poverty Assessments and poverty analysis in other AAA and links to the poverty reduction in the CAS, as well as other parallel poverty reducing operations).[2] However, the findings on poverty analyses were not always utilized well in project design.

Timeliness vs. comprehensiveness. This year’s cohort included 12 emergency operations which required urgent responses from the Bank. These included 8 ERLs and 4 projects designed to address pressing health issues. Social safeguard requirements for ERLs are less stringent than those for normal projects.[3] Panel Members felt that, although given the necessity of providing immediate assistance in emergency operations, comprehensive poverty diagnosis is not expected during preparation, task teams should consider the poverty implications in the design of the project.[4] This is especially true for operations in countries which have had previous poverty assessments or PRSPs.

Review of adjustment operations. This year’s cohort contained a larger number of adjustment operations (19 compared to 10 in QEA5). Some of these operations were for balance of payments and support to deal with financial crises. Four of the 8 SALs were in conflict-affected countries. Good practices included those operations which designed programs by drawing on completed poverty analyses and PRSPs, taking account of the distributional impacts of these programs, and providing strategies for mitigating social risks (see Box).

NEXT STEPS

Integrate lessons from poverty diagnosis more systematically into design. Task teams should make more effective use of findings from poverty diagnosis in project design. PREM and SDV should help task teams incorporate, more systematically, lessons from upstream analytical work (e.g., ESWs, Poverty and Social Impact Analysis), and consider the non-income dimensions of poverty in the design of project activities and programs.

Be flexible in emergency operations while including actions to address social risks. Flexibility is needed in assessing projects which are prepared under difficult conflict conditions. However, as suggested by Panel Members in an emergency TAL: “Some of the reforms and changes being promoted by this project will require a strong participatory and consultation process and a good outreach to various segments of civil society. Greater emphasis should be placed on these aspects during implementation, particularly in conjunction with the project’s support of the PRSP process.”[5] In such cases, project preparation and social appraisal tools need to be adapted to country circumstances to inform project design.

Integrate gender issues more systematically into Bank operations. There continues to be a problem with translating gender issues into operational design. Task teams need to draw on the findings from Country Gender Assessments in project design. Projects also need to expand programs for monitoring gender impacts.

Use improved M&E of CDD projects for scaling up activities. The increasing number of projects with CDD components indicate an expansion of CDD in the Bank’s portfolio. Task teams should apply the lessons and experiences in CDD projects, as documented and evaluated through its improved M&E systems, to inform the process of scaling up CDD within countries.

Make poverty and social review benchmarks more transparent. This year, different sets of benchmarks were applied depending on whether the projects were poverty focused, inclusive, or enabling. PREM/SDV should disseminate these benchmarks more widely to the regions and networks so that they are systematically applied by task teams during project design and preparation.

QEA6 Poverty and Social Aspects: Two Examples of Good Practices

The Vietnam Poverty Reduction Strategy Credit (PRSC) II demonstrates good practice in translating findings from poverty diagnosis and analyses into practical, country-based poverty reduction programs. Panel Members noted the strong country ownership and the consultative and inclusive process throughout project preparation and design of activities. These were despite difficulties in the “negotiation environment” in the country, including “multiple donors with differing agendas.” The project’s design was drawn from upstream poverty diagnosis, which used a highly participatory approach, and closely aligned with the country’s PRSP (CPRGS). Programs were designed based on results of poverty diagnosis and on analyses of poverty and social impacts (PSIA) of policy reforms in the agricultural and rural sectors. In the future, Panel Members recommend building on these programs and expanding work on corruption, public expenditure reforms, and increasing the pace of SOE reforms.

The Kenya Arid Lands II project contains elements of good practice in implementation of the CDD approach within a region of chronic drought, and a project design that reflects sensitivity and responsiveness to gender issues through inclusion of activities that empower women and monitor gender impacts. Panel Members “welcomed (the CDD project) as it gives more attention to implementation arrangements than is sometimes seen in operations emphasizing community empowerment and decentralization alone. The project components clearly address issues related to income generation and improvement of community assets and public good services.” Design of activities was also based on the Country Gender Assessment for Kenya, which showed the growing importance of female-headed households. Gender mainstreaming is a priority program which the task team translated into specific activities like recruitment of agricultural extension staff and gender sensitivity training programs, which would feed into mechanisms for monitoring gender impacts. In order to do such monitoring, the project convinced the government to appoint a gender focal point in the project’s implementing unit.

[1] As defined in the benchmarks for the specialized review for QEA6, focused operations contain actions targeted to bring benefits predominantly to poor people; they address specific and practical needs and strategic interest of poor and marginalized people. Inclusive operations benefit broad based population groups, including the poor; these operations contain components that improve opportunities and services generally while also addressing issues of equity and barriers to participation of the poor. Enabling operations include policies that promote sound economic growth, governance/security, and social and institutional development that support a country’s poverty alleviation strategy. For this review, there were 8 focused; 36 inclusive; and 38 enabling, while poverty was deemed to be not applicable to three operations.

[2] One-half of projects (41) made use of findings from completed poverty assessments (15 HD, 6 SP, 2 SD, 2 energy, 9 rural, 3 transport, and 4 water projects), and contained output indicators related to the MDGs. Eight of the 12 countries that completed their PRSPs by end of FY02, including 3 PRSC projects (Burkina, Uganda, Vietnam) were included in this year’s cohort.

[3] OP8.50 (Emergency Recovery Assistance) states that “Each ERL project is adapted in form and scope to the emergency’s particular circumstances and retains flexibility. ERL projects use disaster-resilient reconstruction standards.”

[4] The average preparation time, up to Board approval, was 3.75 months for the 8 ERLs, and 5 months for the 3 special health intervention projects (except for Ukraine, which was prepared in 11 months).

[5] Angola, Economic Management and Technical Assistance, p. 3.