USAID's approach to poverty reduction : the case of Mali

The assessment finds that in most respects USAID's broad-based sustainable development approach works effectively as a poverty reduction approach. More specific findings are as follows: (1) USAID's program is generally focused on the rural poor and incorporates many poverty reduction objectives. (2) USAID supported the PRSP process. (3) It is imperative that USAID continue to contribute to this process, which allows donors to raise important political economy issues (such as corruption and aid effectiveness) that would otherwise not be discussed with the government. It also presents an important opportunity to collaborate with the government in programming the local currency made available for social programs under the HIPC process. (4) USAID has created an impressive synergy among programs in different sectors. U.S. and Malian PVOs play a key role, implementing almost half of the portfolio. (5) The USAID program is heavily skewed toward delivery of direct social services to targeted groups, with proportionately less allocated to broader economic or policy reforms that have an indirect effect on the poor. USAID's system of budget and program earmarks, as well as the need to report measurable annual achievements under the "results framework" system, has also ensured that the portfolio emphasizes service delivery rather than longer-term macro activities. (6) Direct approaches to poverty reduction involve the delivery of services to the poor, while indirect approaches help the enabling environment for poverty reduction. The question arises, however, whether there is a good balance between direct and indirect assistance in the USAID portfolio. In a country like Mali, where 65% of the population live on less than $1 per day, direct social services provided by PVOs may be largely unsustainable over the long run, particularly if the government is not prepared to assume these services. A greater number of poor could be helped through broader-based efforts to address the sources of poverty and the systems that perpetuate it. (7) Commitment of a large proportion of the portfolio to PVO projects may reflect a relative lack of engagement on a regular basis with the government. This may reduce USAID's visibility and influence at the national level on key policy and strategy issues that create the enabling environment for poverty reduction. USAID actively supports grassroots empowerment of local villages, but there may be missed opportunities at the national level to support free and fair elections and build the capacity of political parties and elected assemblies.