Catalog

Japan Finances New Poverty Fund

Innovative projects to stimulate the poor’s self-help capacity

OPPORTUNITIES NEEDED: Helping people help themselves out of poverty requires collaborative efforts—and funding.

The Japan Fund for Poverty Reduction has been established to support the Asian Development Bank’s (ADB’s) fight against poverty.

Japan is contributing ¥10 billion (about US$90 million) to establish the Fund, which will provide ADB’s developing member countries (DMCs) with grants to support innovative poverty reduction and related social development activities that can add substantial value to ADB projects.

The Fund is expected to support ADB’s poverty reduction strategy, approved in November 1999, which elevates poverty reduction to the main goal of its operations.

Japanese Finance Minister Kiichi Miyazawa announced the proposal of the Fund at ADB’s 33rd Annual Meeting in Chiang Mai, Thailand, 6–8 May 2000. “This Fund aims to provide grants in relation to ADB’s loans to reduce poverty, and also to support capacity-building efforts. By drawing upon this Fund, we hope that the Bank’s loans for poverty reduction will become even more effective,” he said.

ADB approved the Fund’s establishment on 23 May 2000; its objectives are to:

• support well-targeted poverty reduction and social development activities that have a direct impact on the poor and on socially or economically excluded or vulnerable groups,
• stimulate the poor’s self-help capacities,
• stimulate widespread stakeholder participation at the community level, and
• provide a systematic impact on DMCs’ operations and approaches toward sustainable poverty reduction.

Examples of the types of activities the Fund will support include:

• small-scale, basic economic, and social services for the poor;
• social development fund activities that channel funding to small-scale projects targeted to benefit the poor;
• nongovernment organization activities that support poverty reduction and social development; and
• capacity building for local government, and for community-based organizations for enhancing effectiveness and sustainability of DMCs’ poverty reduction efforts.

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