Measuring Poverty through Poverty Reduction Strategy Papers (PRSP)

PRSP approach in 1999, well equipped the World Bank and IMF in the form of PRSP process. PRSP served as an intelligent answer to the critics who blamed them for quenching thirst from the blood of the poor nations. A good reason provided by the bank who believed in the world without poverty. Though PRSP with its flexible framework for policies initiated an HIPC (Highly indebted poor country) aid which was thought to serve about 70 low-income nations, but at the time of implementation PRSP was largely at stake. Therefore with the coordination of all the low-income countries, some principles were developed which were considered to be in mutual interest for both, the countries and the bank. The outline of the principles followed an approach which would be more country-driven and therefore be monitored by the country as well as the bank. Focusing the poor, those versatile principles would be result and partnership oriented, and would be based upon long terms perspectives for alleviating poverty. It seems that IMF has been able to deliver a prompt answer to its critics in the form of PRSP, whose strength lies in the notion that the bank would alone not decide about the country's future, but with the cooperation of all the ministries, parliament, federal and provincial governments the fate of the poverty would be decided.

The question that arises here is that what is the criterion of measuring poverty set by the nations? Further, do the criteria proposed by any country match that of the World Bank? In order to measure poverty, two methods can be adopted, those that remain within the premises of income, and those beyond income-based classifications of poverty. Measuring poverty is not an issue as there are various aspects and various views to have a closer look at it. What is concerned about poverty measurement is that how the World Bank looks at it and what criteria do the Bank sets and considers for measuring poverty? Countries seeking the PRSP approach must not forget that by the term 'poverty' the Bank means 'extreme poverty' which refers to the population which lives on an income of less than $1 a day.