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ADB to Help Tap Potential of NGOs to Fight Poverty in PRC

MANILA, PHILIPPINES (13 September 2005) - The Asian Development Bank (ADB) will help the Government of the People's Republic of China (PRC) to tap the potential of nongovernment organizations (NGOs) to boost state-led poverty reduction efforts, through a technical assistance (TA) grant for US$1 million.

The grant, from ADB's Poverty Reduction Coordination Fund, financed by the Government of the United Kingdom, will support the design and demonstration of models for NGO participation in government-funded poverty alleviation efforts at the village level.

The TA will build a comprehensive framework for mainstreaming NGOs into national poverty alleviation efforts. It will pilot test new mechanisms for competitive selection of NGOs and support capacity building for local officials and NGOs to engage in partnerships in village-level poverty work. It will also involve rigorous monitoring and evaluation of NGO-implemented pilot projects.

While the analysis and policy recommendations generated will extend to the national level, Jiangxi Province was selected to host the pilot test because of its strong support and capacity for policy experimentation, and its persistent pockets of poverty in rural areas.

"Following remarkable progress against poverty, the PRC now faces a new poverty context, with poverty increasingly concentrated in hard-to-reach groups," says Christopher Spohr, an ADB Social Sector Economist.

"In view of the recent deceleration in poverty reduction despite growing public investment, the PRC Government has recognized the need to develop better targeted, innovative, and new approaches to address persistent absolute poverty, as well as the vulnerability of a much larger low-income population living at the brink of poverty."

To date, state-funded poverty alleviation efforts in the PRC have generally been planned, administered, and monitored by local governments. However, evidence from various countries suggests that NGOs may have, or be able to develop, comparative advantages in areas such as project design, management, and monitoring and evaluation.

The Government recognizes that poverty alleviation efforts are undercut by gaps in implementation and institutional issues, including poor targeting and delayed delivery of funds, lack of transparency, and weak incentives and ability to adopt new approaches.

"The project builds on strong foresight and support from the State Council Leading Group Office of Poverty Alleviation and Development (LGOP), Ministry of Finance, and partner agencies in Jiangxi Province, who increasingly view NGO participation in poverty reduction as a means to address certain systemic flaws and inefficiencies," Mr. Spohr adds.

"The PRC Government will clearly maintain a key guiding role in poverty reduction in the PRC, but international experience shows that government-NGO cooperation can tap important complementarities, based on each partners' strengths.

The TA builds on and complements ongoing and planned ADB TAs to explore new models for rural microfinance and alternative rural livelihoods. It will also link to poverty monitoring work in Jiangxi supported by Germany and to broader work by the World Bank, Department for International Development, and other organizations on assessing poverty and poverty reduction efforts in the PRC.

The TA will be implemented through October 2007, with LGOP acting as executing agency. Total cost of the TA is about $2.1 million, of which the Government will finance about $1 million equivalent, and the China Foundation for Poverty Alleviation will contribute $100,000 equivalent as another key project partner.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members, with 45 from the region. In 2004, it approved loans and technical assistance totaling $5.3 billion and $196.6 million, respectively.

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