Are PRSPs combating rural poverty in Honduras and Nicaragua?: lessons for a new generation of PRSPs

This policy briefing paper highlights the absence of effective policies to address the needs of the rural poor within the Honduran and Nicaraguan poverty reduction strategy papers (PRSPs) and calls for genuine pro-rural poor policies within the forthcoming Second Generation PRSPs. The report states that government policies outlined in the PRSPs have had a disappointing impact on reducing levels of rural poverty, because instead of focusing on tackling issues of inequality, for example access to land or public services, they have tended to focus on improved productivity and competitiveness in the agricultural sector in order to increase exports, economic growth and integration into global markets. Alongside the failure of PRSPs to address the key issues affecting the rural poor, the report also notes implementation problems with carrying out PRSP policies because of delays in funding, largely a result of both countries going off-track with the IMF. The report makes the following recommendations: government must adopt a multidimensional approach to measuring poverty and a comprehensive analysis of the specific determinants of rural poverty must be carried out through participatory processes; inequity in land distribution must be addressed in forthcoming PRSPs; Poverty Social Impact Assessments (PSIA) are urgently required to assess the impact of neo-liberal macro-economic and structural adjustment policies on the poor and macro-economic policies must be decided within participatory forum; the role of the IMF in signalling to other donors should be reduced, with countries taking greater control and donors undertaking their own independent analysis of the fiscal situation; and there needs to be greater participation in policy making by the poor with a move from consultation to joint decision-making.