Regional: Supporting the Operational Priority 1 Agenda: Strengthening Poverty and Social Analysis

Multisector / ADB's corporate management, policy and strategy development

After decades of sustained growth, Asia and the Pacific has transformed into one of the most dynamic areas in the world, but it also has clear and persistent disparities. Extreme poverty has been dramatically reduced, and more than 95% of developing Asia's population live in middle-income countries. However, about 264 million people still live below the $1.90/day poverty line, and the 1.1 billion people who live on less than $3.20/day are particularly vulnerable to shocks and are at risk of falling back into poverty. Income inequality in countries has risen or remained at a high level, and significant nonincome disparities exist in access to decent jobs, quality education and training, health services, and social protection. Access to and affordability of basic services such as electricity, water and sanitation, and transport remain a challenge for many people in Asia and the Pacific. Urbanization, climate change, demographic transition, digital technology, the changing nature of work, and migration all risk the creation of new vulnerabilities and vulnerable groups. Significant gender disparities persist and often intersect with other vulnerabilities, thereby limiting potential for growth and attainment of equal opportunities for half of the population in Asia and the Pacific.

Strategy 2030 acknowledges the complexities of Asia and the Pacific and calls for a focus on addressing remaining poverty and reducing inequalities under OP1. The Operational Plan for OP1 highlights the need for all sectors to address the inequality of access to opportunities, especially for poor and vulnerable people. To do this effectively, robust PSA needs to be undertaken to better understand the complex contexts and interaction of social, economic, political, and institutional forces in DMCs; anticipate projects' differentiated impacts on various social groups; and use this information to better address vulnerability in country partnership strategies and programs, target projects, and design measures to support inclusion, access, affordability, and participation.

Strengthening the capacity of governments to conduct PSA and integrate findings into national poverty reduction and social inclusion agendas and project design is needed. In many countries, PSA approaches are limited, applied inconsistently, and focused strongly on risk and safeguards. They do not (i) address the broader issues of heterogeneity in poverty, vulnerability, and inequality; or (ii) incorporate an assessment of the different impacts on poor and vulnerable groups, including disadvantaged youth; older people; people with disabilities; and those discriminated against based on their gender, ethnicity, religion, class, or sexual identity. ADB has developed good guidance on PSA, which should be updated to (i) address links to the Sustainable Development Goals; (ii) outline good practices for all lending modalities (e.g., results-based lending); (iii) align the analyses for sovereign and nonsovereign projects; (iv) clarify how the broad umbrella of PSA should be resourced and organized to feed into project design and key areas of analysis, such as gender, participation, and safeguards; (v) integrate guidance for selected sectors, such as urban development, and develop new guidance in areas such as rural development or disability inclusion; and (vi) identify and integrate good practices and tools that have been developed in DMCs or by TA and loan projects from ADB or other development partners. There is a need to (i) ensure that the tools and guidance better address the diversity of issues, social groups, and definitions of poverty and vulnerability across countries and regions; (ii) strengthen capacity in DMCs (through ADB projects' executing and implementing agencies) to implement PSA and, with governments and other development partners, develop harmonized approaches to monitoring and reporting; and (iii) help ensure that the tools and capacity building are adequately aligned with national poverty reduction and inclusivity agendas.

Undertaking strategic research is critical for keeping DMCs and ADB abreast of emerging issues and enabling them to address these issues in innovative and comprehensive ways. To quickly adapt and develop effective responses to rapid social and economic changes, conducting targeted research on emerging poverty and inclusion issues and differential impacts on vulnerable populations is necessary. Key areas for investigation include disability inclusion, climate change and disaster resilience, migration and displacement, and impacts of technology or other disruptors in sectors. Disability inclusion is a particular area where targeted research and strengthened operational approaches are needed. Of the 1 billion people with some form of disability globally, 70% live in Asia and the Pacific. Many people with a disability face extreme poverty because of lack of access to and exclusion from opportunities. They represent one of the most left behind segments of the population. The urban poor are among the most vulnerable to shocks as they have fewer assets, are typically excluded from formal decision-making processes, and often live in unorganized settlements in the most hazardous parts of cities that are at a higher risk of being affected by climate change and disaster-related events. Targeted research in emerging areas will help improve the quality of analysis and design of interventions, and facilitate the development of a network of researchers and collaborators across DMCs in Asia and the Pacific and improve knowledge dissemination.

Supporting innovation in PSA will help create better and more impactful projects and replicable approaches. Using technologies such as geographic information systems; designing analytical tools to assess gender and other distributional impacts; and developing approaches to assess the poverty and social impacts of climate change, economic empowerment, market access, and land use will help embed effective approaches and test pioneering ones.

In response to these challenges and issues, the TA will strengthen analytical tools and processes for PSA, improve capacity in DMCs, and develop knowledge and collaboration on new areas for engagement.

Analytical tools for poverty and social inclusion updated and shared with DMCs

Strategic research and knowledge exchange on poverty reduction and social inclusion strengthened

Innovative approaches to poverty and social analysis applied in selected projects