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p. 4 of 9 BACK | NEXT I. Background II. ADB's Poverty Reduction Strategy III. Rationale for the Cooperation Fund IV. Objectives and Scope V. Outputs VI. Activities to be Financed from the Fund VII. Implementation Arrangements VIII. Funding Arrangements IX. Recommendation

Formulation and Implementation of National Poverty Reduction Strategies

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IV. Objectives and Scope

10. The Cooperation Fund in Support of the Formulation and Implementation of National Poverty Reduction Strategies is an umbrella facility for multiple donors aimed to help mitigate the constraints encountered by many DMC governments when initiating the formulation and implementation of the NPRSs. The Fund will finance a coherent program aimed at assisting selected DMCs in formulating and implementing their NPRSs, while enhancing ADB’s added value in this area. The Government of the Netherlands will make the first contribution to the Fund.

11. The main objectives of the Fund are to facilitate the in-country processes of poverty reduction strategy formulation, prioritization, implementation, monitoring, and reformulation and to strengthen ADB’s role in this process. The activities of the Fund will be complementary to the activities of other international and bilateral organizations. In operational terms, the Fund aims at:

• assisting the DMC governments to formulate the NPRSs, action plans, and the implementation mechanisms, and to establish monitoring and evaluation systems that will ensure the broad participation of DMCs civil societies and private sectors in every step of the process;
• assisting the DMC governments in the analytical processes underlying poverty assessment and national poverty strategy formulation and implementation: this may include (a) establishing a conceptual framework for analysis; (b) analyzing public program and public policy impact on poverty, including a more detailed analysis of the public expenditure framework; and (c) assessing and rating DMC levels of governance;
• assisting in participatory processes to formulate systematic alternate strategies. this may include stakeholders consultation processes, participatory poverty assessments, and consultative advocacy processes;
• assisting the DMC governments with the implementation of NPRSs through a better characterization and selection of relevant projects and programs supporting poverty reduction;
• assisting the DMC governments with coordination of external funding and division of labor based on their NPRSs; and
• strengthening the capacities of DMC staff and other stakeholders for participatory poverty analysis, strategic prioritizing, and sequencing of development investments, for example by building on the current ADB poverty reduction briefing and training programs.

12. The Fund will be used to finance activities at selected DMCs and at ADB’s headquarters, with the emphasis on the former. Circumstances will differ between countries, and priorities will also differ. Clearly relevant factors in this respect are local ownership and commitment to the process, the poverty reduction objectives of each government and society, DMC institutional capacities, and the activities of other donors in these areas. In all cases, ADB will commit itself to maximum collaboration and minimum overlap with other major donors.

13. Given the expected size of the Fund, it is proposed to initially focus on a limited set of countries, possibly only three in the first year. These countries should be selected based on the demand by DMC governments, the perceived local ownership and commitment among both government and civil society for an NPRS, the perceived need for strategic planning in poverty reduction, the availability of other ADB Technical Assistance (TA) resources, and the role that ADB can play in the process vis-à-vis other donors. The selection of countries should be described in the annual work program, which will be agreed upon between participating donors and ADB. DMC coverage is expected to increase and program expansion is encouraged, based on the positive development of initial NPRS formulation and implementation.

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