Cape Verde - Poverty Reduction Strategy Paper (PRSP) and joint staff assessment
Mpoy-Kamulayi,T.
The Poverty Reduction Strategy Paper (PRSP) for Cape Verde builds on the strategy laid out in the Interim PRSP in April 2002. This strategy focuses on five key pillars for public intervention: 1) promoting good governance; 2) improving competitiveness and private-sector-led growth; 3) fostering human capital development; 4) strengthening social security and solidarity; and, 5) improving infrastructure and land use management. Drawing on the 2002 household survey, the PRSP emphasizes the change in relative poverty, whose population increased from 30 percent in 1988, to about 37 percent in the latest survey, and reflects the rapid growth of the services sector. However, the PRSP underplays the large decline in absolute income poverty which, despite robust growth and effective delivery of social services, has fallen from 49 percent in 1988 to 37 percent in 2002. The remaining poor typically live in rural areas, where employment and higher education are scarcer, but they are also closer to the poverty line. Overall, staffs do not believe that the emphasis on inequality compromises the PRSP's policy options. Development challenges revolve around: maintaining macroeconomic stability, given external vulnerabilities and uncertainties surrounding resource flows; achieving further improvements in governance, especially in a decentralized context; reforming social expenditure programs to reflect the changing nature of demand; and, promoting stronger growth, and poverty reduction through improvements in the business climate.
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