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Inclusion, Resilience, Change

ADBs Strategy 2020 at Mid-Term

Evaluation

Independent

Special Evaluation Report Februar 2014

Inclu!ion" Re!ilience" C#an$e: C#an$e:


%&'(! Strate$ 2020 at )id)id-*erm

Reference Number: SER: REG 2014-01 Independent Evaluation: CS-02

N+*E In t#i! report" ,-. refer! to /S dollar!0 5e 4ord! a!ian development ban6" c#an$e" di!a!ter ri!6 mana$ement" environmental !u!tainabilit " fra$ile and conflict-affected !ituation!" $reen#ou!e $a! emi!!ion" inclu!ive $ro;t#" independent evaluation department" mid-tem revie;" millennium development $oal" public !ector mana$ement" private !ector development" <ualit at-entr " re$ional inte$ration" re!ilience" !trate$ 2020" triple bottom line

&irector General &irector *eam leader! leader! *eam member!

10 *#oma!" Independent Evaluation &epartment 2IE&3 40 5ol6ma" Independent Evaluation &ivi!ion 1" IE& 70 1an Ri8n" 9rincipal Evaluation Speciali!t" IE& '0 Gra#am" Senior Evaluation Speciali!t" IE& :0 +cenar" Evaluation +fficer" IE& 10 )elo-Cabuan$" Evaluation %!!i!tant" IE&

*#e $uideline! formall adopted b t#e Independent Evaluation &epartment 2IE&3 on avoidin$ conflict of intere!t in it! independent evaluation! ;ere ob!erved in t#e preparation of t#i! report0 *o t#e 6no;led$e of IE&" t#ere ;ere no conflict! of intere!t of t#e per!on! preparin$" revie;in$" or approvin$ t#i! report0 In preparin$ an evaluation report" or b ma6in$ an de!i$nation of or reference to a particular territor or $eo$rap#ic area in t#i! document" IE& doe! not intend to ma6e an 8ud$ment! a! to t#e le$al or ot#er !tatu! of an territor or area0

%bbreviation!
%&' C+2 Co9 C9S &R) FC%S IE& 59S )&G )IC )*R 9CR 999 9S& 9S) 9S+ 9S+& ?%E S)E *% = = = = = = = = = = = = = = = = = = = %!ian &evelopment 'an6 carbon dio>ide Communitie! of 9ractice countr partner!#ip !trate$ di!a!ter ri!6 mana$ement fra$ile and conflict-affected !ituation! Independent Evaluation &epartment 6no;led$e product! and !ervice! millennium development $oal middle income countr mid-term revie; pro8ect completion report public=private partner!#ip! private !ector development public !ector mana$ement private !ector operation! 9rivate Sector +peration! &epartment <ualit -at-entr !mall and medium enterpri!e tec#nical a!!i!tance

Contents
Page Acknowledgments Foreword Seven Steps to Raise ADBs Impact Views from E ternal E perts C!apter "# A C!anging Asia and Pacific Region C!apter $# Incl%sive &rowt! C!apter (# Environmentall) S%staina*le &rowt! C!apter ,# Private Sector Development C!apter .# /nowledge Sol%tions C!apter 0# 1arnessing Reso%rces for Better 2%tcomes Appendi es "3 $3 (3 ,3 ADBs Evolving Strategic 4andscape 5a6or ADB Policies7 Plans7 &%idelines adopted $''- onwards S%mmar) of 5essages from E ternal Stake!olders S%mmar) of 5essages from Internal Stake!olders ." .$ ., .. i iii v i " "' "+ $(. ,"

%c6no;led$ment! %c6no;led$ment!
*#i! report ;a! prepared t#rou$# a collective effort of !taff and mana$ement at Independent Evaluation" under t#e $uidance of 1inod *#oma!" &irector GeneralE 4alter 5ol6ma" &irectorE 7emamala 7etti$e" Senior %dvi!orE and 1alerie Reppelin-7ill" %dvi!or0 7an! van Ri8n and 'en8amin Gra#am co-led t#e report ;it# !upport from :ucille +cenar" 1alerie )elo-Cabuan$" and con!ultant! %nil Sood and Ra!#el 9ardo-&imaano0 7enri6e Fei$" )arco Gatti" Eun6 un$ 5;on" Gane!# Rauni ar" 7 un Son" 5apil *#u6ral" *omoo /eda" 'i#n N$u en" Nat#an Subramaniam" *o!#i u6i Fo6ota" and %ndre; 'ruba6er are ac6no;led$ed for t#eir valuable contribution! to t#e report0 )ic#ael &iGa de!i$ned t#e cover0 *#e report benefited !i$nificantl from feedbac6 and in!i$#t! provided b : 7onorable 5ri!talina Geor$ieva" Commi!!ioner for International Cooperation" 7umanitarian %id and Cri!i! Re!pon!e" European /nionE &r0 Noeleen 7e Ger" /nder-Secretar General of t#e /nited Nation! and E>ecutive Secretar " /nited Nation! Economic and Social Commi!!ion for %!ia and t#e 9acificE 7onorable )ari 9an$e!tu" )ini!ter of *ouri!m and Creative Econom " Republic of Indone!iaE and 7onorable Emilia 9ire!" )ini!ter of Finance" *imor-:e!te0 *#e team t#an6! t#e mana$ement and !taff of t#e %!ian &evelopment 'an6 Strate$ and 9olic &epartment for t#e cordial cooperation and coordination durin$ t#e )idterm Revie; proce!!0 *#e team al!o t#an6! t#e #ead! and member! of %&'(! Communitie! of 9ractice and ot#er %&' !taff for t#eir time and input!0 Government official! and !taff from partner development a$encie! are al!o reco$niGed for t#eir contribution!0 Independent Evaluation remain! full re!pon!ible for t#e report0

Seven Step! to Rai!e %&'(! Impact


*#e %!ia and 9acific re$ion #a! made !tri6in$ pro$re!! in reducin$ income povert over recent decade!0 %t t#e !ame time" income di!paritie! #ave ;idened" and environmental de$radation #a! ;or!ened mar6edl in man re!pect!0 *#e c#allen$e! of !ocial inclu!ion" environmental care and re$ional inte$rationHStrate$ 2020(! t#reefold !trate$ic a$endaHare even more ur$ent toda t#an t#e ;ere in 200B" ;#en t#e !trate$ ;a! initiated0 )ean;#ile" a! re$ional con!ultation! #ave confirmed" e>pectation! of countrie! re$ardin$ %&' !upport for t#eir development #ave never been #i$#er0 %! a premier re$ional public in!titution" %&' can and mu!t ri!e to t#e c#allen$e of meetin$ t#e!e e>pectation!0 *#i! revie; b Independent Evaluation find! t#at to do !o" %&' mu!t adapt it! bu!ine!! modelHand mo!t importantl " #arne!! it! financial and #uman re!ource! a! ;ell a! it! partner!#ip!Hto reorient operation! to better deliver on it! 2020 a$enda0 In movin$ from !tated $oal! to actual re!ult!" countr partner!#ip !trate$ie! ou$#t to !upport operationall a blend of activitie! t#at drive inclu!ive $ro;t#" environmental !u!tainabilit " and re$ional inte$ration0 9ortfolio performance in infra!tructure and ot#er area! need! to #elp reac# t#e in!titution(! tar$et of B0I !ucce!!" ;#ic# #a! lon$ remained elu!ive0

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Inclu!ion and 9overt

*#e re$ion #a! e>perienced one of t#e fa!te!t economic $ro;t# rate! in t#e ;orld" but income and non-income ine<ualit #ave been on t#e ri!e" ;#ile povert " malnutrition" and $ender di!parit remain ;ide!pread0 Gini coefficient! #ave ri!en in 12 out of 2B %!ian economie!" affectin$ B0I of %!ia(! population" and t#e re$ion remain! far from ac#ievin$ $ender e<ualit 0 %rea! ;#ere pro$re!! i! particularl lac6in$ include acce!! to productive re!ource! and economic opportunit E t#ere are al!o ;ide deficit! in education and #ealt#0 *#e!e trend! #urt !ocial co#e!ion" limit participation" and t#reaten to bloc6 !u!tained $ro;t#0 'ot# infra!tructure and non-infra!tructure pro8ect! can promote inclu!ive $ro;t#" but !uc# an outcome i! not automatic" a! i! often a!!umed0 9ro8ect! $eared to;ard promotin$ #i$# $ro;t# ;ill ma6e an optimal contribution to inclu!ive $ro;t# onl if de!i$ned ;it# t#e ob8ective of benefitin$ lo;er-income $roup! relativel more0 7ence" t#e c#oice of pro8ect! !#ould be determined b t#eir li6el impact on area! !uc# a! 8ob creation" povert reduction" and improvin$ acce!! to !ocial !ervice!0

In relation to %&'(! primar emp#a!i! on infra!tructure pro8ect!" t#e in!titution ou$#t to rebalance t#e t#ru!t of it! portfolio bot# b !ee6in$ $reater economic and !ocial inclu!ion in infra!tructure operation!" and increa!in$ !upport for pro8ect! t#at broaden acce!! to opportunitie! and !upport !ocial protection0 *#e portfolio ;ould need to appl a filter to en!ure t#at it! benefit! accrue to lo;er income $roup! 2!a " t#e

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Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


bottom 40I3 relativel more0 *#ere are e>ample! to build on in t#e area! of rural development" !ocial protection" acce!! to ener$ " and tran!port infra!tructure0 %&'(! private !ector operation! can contribute more to inclu!ive $ro;t# t#rou$# initiative! for inclu!ive bu!ine!!e! and pro8ect! in frontier mar6et!0

20

Climate C#an$e" Environment" Environment" and Re!ilience

Runa;a climate c#an$e and continuin$ environmental de$radation are provin$ to be $ame c#an$er!0 %ir and ;ater pollution are perva!ive t#reat! to #ealt# and ;ellbein$ in t#e re$ion" ;#ile defore!tation" land de$radation and !oil ero!ion ;or!en t#e impact! of climate c#an$e0 Indu!trial countrie! #ave muc# $reater emi!!ion! per capita" but developin$ %!ia no; contribute! over one-t#ird of $lobal carbon dio>ide emi!!ion! 2t;ice it! !#are of $lobal $ro!! dome!tic product30 *#ere i! a $ro;in$ diver$ence bet;een ;or!enin$ environmental and di!a!ter trend! and %&'(! action! in t#i! re!pect0 &i!a!ter! are provin$ to be co!tl " affectin$ t#e economic $ro;t# rate! of countrie!0 *#e al!o e>acerbate ine<ualit " a! t#e mo!t vulnerable people are t#e ;or!t affected" and #ave t#e #arde!t time recoverin$0 *#e double #ammer of $ro;in$ ine<ualit and t#e increa!in$ fre<uenc of inten!e di!a!ter! ma6e it more difficult to addre!! vulnerabilit 0

Inve!tment! in di!a!ter re!ilience" $enerated t#rou$# t#e approac# of buildin$bac6-better and inte$rated di!a!ter ri!6 mana$ement" ou$#t to be a ma8or priorit for %&'" and not a nic#e-product0 *#e in!titution #a! made !iGable di!a!ter re!pon!e inve!tment! in re#abilitation and recon!truction follo;in$ di!a!ter!0 It no; need! to !cale up it! contribution to prevention b inve!tin$ muc# more in climate c#an$e adaptation" climate c#an$e miti$ation" and di!a!ter ri!6 mana$ement0 4#ile ener$ #a! made pro$re!! t#rou$# inve!tment! in efficienc and rene;able!" tran!port need! to $o muc# furt#er in !#iftin$ from con!tructin$ road! to alternative! !uc# a! rail! and ;ater;a !0

@0

Re$ional Cooperation and Inte$ration

%&' #a! provided con!iderable !upport for re$ional inte$ration" primaril b focu!in$ on infra!tructure t#at !upport! re$ional p# !ical connectivit 0 %&' i! uni<uel po!itioned to pla a !i$nificant role in re$ional public $ood! in ;#ic# countrie! individuall tend to underinve!t0

*o rai!e it! impact on re$ional cooperation and inte$ration" %&' need! to move be ond !upport for cro!!-border road! and tran!mi!!ion line!" and increa!e !upport for re$ional public $ood! t#rou$# lendin$" 6no;led$e e>c#an$e" and polic dialo$ue0 9riorit area! include food !ecurit " trade facilitation" and natural re!ource mana$ement" includin$ di!a!ter miti$ation0

40

Governance and 9rivate Sector &evelopment

Re!ult!-oriented public !ector mana$ement i! a prere<ui!ite to !imultaneou!l fo!terin$ economic $ro;t# ;#ile en!urin$ !ocial inclu!ion and environmental !u!tainabilit 0 Good $overnance i! al!o e!!ential for a polic and re$ulator environment t#at enable! t#e private !ector to flouri!#" includin$ t#rou$# public=

Se!en Ste"s to Raise ADB's I "act


private partner!#ip!0 E>pandin$ private !ector development and private !ector operation! to C0I of t#e annual portfolio b 2020 i! appropriate0 7o;ever" %&'(! !upport for !tren$t#enin$ t#e enablin$ environment for private !ector development #a! not been $ro;in$ muc#" ;#ic# ;ill li6el limit t#e impact of private !ector operation!" and !upport for public=private partner!#ip!0

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%&' need! to !u!tain it! operational !upport for $overnance" and be re!pon!ive to $ro;in$ demand for !uc# !upport" includin$ from middle-income countrie!0 %&' al!o need! to do more to #elp addre!! ot#er critical con!traint! to private !ector inve!tment and activit " includin$ bu!ine!! impediment! faced b !mall bu!ine!!e!" and female and rural entrepreneur!" t#rou$# !upport for education" finance !ector development" infra!tructure reform!" and reform! t#at improve competition and !tren$t#en propert ri$#t!0

C0

+perational Focu! and S ner$

+perational !electivit mu!t be a mean! to ac#ievin$ better development outcome!" rat#er t#an a mec#anical $oal0 ' !ettin$ a tar$et for core area!" %&' #a! con!i!tentl e>ceeded it! intended focu! on infra!tructure" to t#e detriment of ot#er area!0 In t#i! re$ard" Independent Evaluation !upport! t#e propo!ed tar$eted increa!e! in #ealt# and education operation! a! a !tep in t#e ri$#t direction0 % more important ob8ective ;ould be to capitaliGe on ! ner$ie! acro!! area!Hfor e>ample" tran!port and mar6et developmentE !anitation and #ealt#E education and a$riculture0

In rebalancin$ t#e portfolio" %&' ou$#t to move a;a from a B0I=20I tar$et" and p#a!e out t#e coreJnon-core di!tinction0 Suc# rebalancin$ entail! droppin$ t#e infra!tructure !#are from over K0I of recent ear!0 En$a$ement at t#e countr level ;ould be driven b a countr (! de!ired development outcome! rat#er t#an b uniform corporate tar$et!0 *#i! re<uire! pro$ram! t#at !ee6 lin6! and ! ner$ acro!! !ector!" collaboration ;it# development partner!" and !upport for $overnance and t#e private !ector0

D0

%c#ievin$ +utcome!

%lon$!ide a number of improvement! in portfolio performance" t#e re!ult of pro8ect! #a! con!i!tentl fallen !#ort of t#e B0I tar$et !ucce!! rate0 *#i! report call! for effort! to rai!e pro8ect performance" e!peciall on t#e evaluation criteria of effectivene!! and !u!tainabilit 0 'ot# criteria are #eavil influenced b t#e level of effort made on pro8ect !upervi!ion" includin$ di!bur!ement and procurement" ;#ic# #a! been a ;ea6ne!! of %&' operation!0 *#e needed action! are li6el to var acro!! area!" a! evaluation! #ave !#o;n0 )oreover" deliverin$ outcome! on comple> c#allen$e! call! for innovation and ri!6 ta6in$" and bot# operation! and Independent Evaluation mu!t encoura$e t#i!0

*o improve t#e ac#ievement of development outcome!" %&' ;ill need to !tren$t#en implementation !upervi!ion and en!ure t#e !u!tainabilit of it! operation!" particularl in infra!tructure0 Increa!in$ t#e u!e of re!ult!-ba!ed lendin$ to finance tran!port" for e>ample" ;ould facilitate movin$ be ond repeater con!truction pro8ect! to ;ider !upport for operation! and maintenance0

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Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter

K0

*eam; *eam;or6

4#ile !taff repre!ent a $reat !tren$t# of t#e or$aniGation" t#e fra$mentation of t#eir !6ill! and 6no;led$e acro!! %&' call! for a revie; of t#e effectivene!! of t#e or$aniGation(! !tructure in deliverin$ re!ult!0 *#e lac6 of a critical ma!! of e>perti!e" t#e di!per!ion of available talent" and t#e difficult of #arne!!in$ talent ;#en and ;#ere it i! needed mo!t" are often identified i!!ue! in ob!ervation! of or$aniGational performance0 9ro8ect team! need improved acce!! to t#e be!t of %&' 6no;led$e and $lobal $ood practice!" ;#ile t#e team! need to !tren$t#en t#eir contribution! to or$aniGational learnin$0 %! more countrie! move into middle-income !tatu!" ne; 6no;led$e !ource! become available t#at can be of broad benefit" includin$ to lo;erincome countrie!0 Furt#ermore" t#e increa!e in t#e !taff !iGe of %&' re!ident mi!!ion! #a! not been accompanied b a corre!pondin$ tran!fer of deci!ion-ma6in$ aut#orit 0 4#ile t#e direction !#ould be !eamle!! team deliver acro!! %&'" t#e proportion of operation! admini!tered b re!ident mi!!ion! 2mea!ured b t#e number of loan!" $rant! and tec#nical a!!i!tance pro8ect! admini!tered3 fell to @0I in 2012" from @4I in 200A0

Stron$er incentive! can promote ;or6 acro!! boundarie! and #elp addre!! !6ill !#orta$e! in certain area!0 Re;ard! could promote team-ba!ed pro8ect deliver " ;it# team! #eld accountable for outcome!0 Re$ional department! could ta6e differentiated approac# in decentraliGin$ operation! to meet t#e diver!e demand! and prioritie! of lo;-income countrie!" fra$ile and conflict-affected !ituation!" and middle-income countrie!0 *#e c#an$in$ development land!cape call! for a !tron$er role for %&' a! a bro6er of 6no;led$e0

Se!en Ste"s to Raise ADB's I "act


Seven 9rincipal %rea! for for C#an$e 5e I!!ue 7o; to fo!ter Strate$ 2020(! a$enda of Inclu!ive Gro;t#" Su!tainabilit " and Re$ional Inte$ration 9ropo!ed C#an$e Endor!e t#e !trate$ic a$enda" but tran!late it into t#ree operational prioritie!Ht#e triple bottom lineHof $ro;t#" inclu!ion" and environmental !u!tainabilit 0 See6 relativel $reater $ain for lo;er income !trata" not onl in !ocial !ector! but al!o for infra!tructure0 Rat#er t#an a!!umin$ inclu!ion to be automatic" pur!ue t#e $oal more directl 0 E>pand climate c#an$e miti$ation and adaptation ;or6" ma6e di!a!ter ri!6 mana$ement a priorit in countr partner!#ip !trate$ie!" and provide cuttin$-ed$e leader!#ip0 Complement !upport for cro!!-border road! and tran!mi!!ion line! ;it# $reater !upport for food !ecurit " trade facilitation and cro!!-border natural re!ource mana$ement" includin$ di!a!ter miti$ation0 &eepen !upport for $ood $overnance t#rou$# !ector operation! in countrie!0 Continue to re!pond to demand for public !ector mana$ement operation!0 Stren$t#en !upport for inclu!ive bu!ine!!0 9ur!uin$ $oal! at t#e countr level call! for complementar multi!ector intervention!0 Rebalance t#e portfolio b p#a!in$ out t#e B0:20 tar$et and t#e di!tinction bet;een core and non-core operation!0 Stren$t#en implementation !upervi!ion" and $ive more attention to t#e !u!tainabilit of infra!tructure and it! outcome!0 Increa!e t#e u!e of re!ult!ba!ed lendin$0 Give !tron$er incentive! and place more accountabilit on !taff for ac#ievin$ $ood outcome!0 &ifferentiate t#e approac# to decentraliGation accordin$ to t#e countr conte>t!0 9la a !tron$er role a! a 6no;led$e bro6er for client!0

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10 Inclu!ion and 9overt : Ine<ualit #a! increa!ed for more t#an B0I of t#e re$ion(! population" and va!t povert remain!0 20 Climate C#an$e" Environment" and Re!ilience: Runa;a climate c#an$e and ;or!enin$ environmental and di!a!ter trend! outpace t#e re!pon!e0 @0 Re$ional Cooperation and Inte$ration: %&'(! con!iderable !upport for re$ional inte$ration and cooperation #a! been concentrated on p# !ical connectivit 0

40 Governance and 9rivate Sector &evelopment: *#e <ualit of $overnance" includin$ control of corruption" #a! !ta$nated" ;#ile in!ufficient !upport #a! been $iven to inclu!ive $ro;t# b private !ector operation!0 C0 +perational Focu! and S ner$ : *ar$et! lead to an unintentional over!#ootin$ of infra!tructure at t#e e>pen!e of ot#er vital area!0 D0 %c#ievin$ +utcome!: *#ere i! a need to improve operational performance" in particular ;it# re!pect to effectivene!! and !u!tainabilit 0 K0 *eam;or6: Fra$mentation of !taff !6ill! and 6no;led$e acro!! %&' compromi!e! t#e in!titution(! effectivene!! in deliverin$ re!ult!0

%&' L %!ian &evelopment 'an60

1ie;! from E>ternal E>pert!


*#e Independent Evaluation &epartment 2IE&3 invited an e>ternal panel of reco$niGed e>pert! to reflect on t#e evolvin$ development land!cape and implication! for t#e %!ian &evelopment 'an6 2%&'30 *#eir vie;! are ! nt#e!iGed #ere0 *#e panel member! ;ere: 10 7onorable 5ri!talina Geor$ieva" Commi!!ioner for International Cooperation" 7umanitarian %id and Cri!i! Re!pon!e" European /nion 20 &r0 Noeleen 7e Ger" /nder-Secretar General of t#e /nited Nation! and E>ecutive Secretar " /nited Nation! Economic and Social Commi!!ion for %!ia and t#e 9acific @0 7onorable )ari 9an$e!tu" )ini!ter of *ouri!m and Creative Econom " Republic of Indone!ia 40 7onorable Emilia 9ire!" )ini!ter of Finance" *imor-:e!te

%n Evolvin$ :and!cape
*#e panel #i$#li$#ted critical factor! affectin$ development in t#e re$ion0 +n t#e po!itive !ide" %!ia #a! !ucceeded in eliminatin$ #alf t#e ;orld(! ab!olute povert and e>pandin$ it! middle cla!!" and de!pite recurrin$ cri!e! i! poi!ed to become t#e center of t#e $lobal econom 0 )oreover" t#ere i! $ro;in$ public intere!t and political !upport for improvin$ $overnance and tac6lin$ t#e mo!t !eriou! t#reat!" mo!t notabl ine<ualit " climate c#an$e" and environmental de$radation0 % ne; !en!e of ur$enc for rai!in$ development outcome! #a! emer$ed and t#e potential for continued $ro;t# and development remain! $enerall !tron$0 %! one paneli!t !tated" ,%!ia #a! t#e re!ource!" tec#nolo$ical pro;e!! and collective ;ill to eliminate bot# povert and #un$erM Given t#i! rate of pro$re!!" eliminatin$ e>treme povert b 20@0 i! ;ell ;it#in reac#0. 'ut !u!tainin$ pro$re!! and ac#ievin$ t#e full potential of t#e re$ion ;ill not be ea! 0 *#ere are man c#allen$e!" and !omeHli6e runa;a climate c#an$eHare alread impactin$ t#e re$ion0 Follo;in$ t#e !ame development pat#" ;it# it! ne$ative environmental and !ocial e>ternalitie!" ;ould be incrementall co!tl 0 )an people continue to !uffer variou! form! of deprivation0 %! a paneli!t ar$ued" ,*#e continuation of povert and #un$er in t#e re$ion" ;#ic# continue! to e>perience one of t#e fa!te!t economic $ro;t# rate! in t#e ;orld" i! unacceptable0. *#e pattern of $ro;t# #a! not been optimal" ;it# inade<uate emplo ment $eneration and inclu!ion of ;omen" out#" and mar$inaliGed !e$ment! of !ociet 0 *#e !#are of ;omen in non-a$riculture emplo ment remain! lo; in man countrie!0 Even ;#ere $ro;t# #a! created 8ob!" man are in le!!-productive area! ;it# poor ;or6in$ condition!0 % paneli!t noted t#at" ,4it# a lac6 of decent 8ob! in t#e or$aniGed !ector!" lar$e number! of out# are mi$ratin$ from traditional occupation! to citie! loo6in$ for ;or6" but end up in lo;-paid informal !ector ;or60. Ine<ualit i! a real and $ro;in$ concern0 In addition to income ine<ualit " di!paritie! in education" #ealt# care" food !ecurit " #ou!in$" and acce!! to !afe ;ater demand $reater attention0 *#e!e multiple form! of deprivation reinforce eac# ot#er"

% ne; !en!e of ur$enc for rai!in$ development outcome! #a! emer$ed

Natural di!a!ter! are #ittin$ t#e poor #arde!t

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Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


complicate povert reduction effort!" and can onl be addre!!ed t#rou$# more inte$rated" multi!ector approac#e!" and better collaboration0 Climate c#an$e and environmental de$radation continue to inten!if " demandin$ ur$ent action0 )an area! #ave !een ma8or environmental dama$e and %!ia i! a $ro;in$ $lobal polluter ;it# a ri!in$ !#are of emi!!ion!" contributin$ to t#e runa;a climate c#an$e cri!i!0 )ore fre<uent and inten!e natural di!a!ter! are #ittin$ t#e poor #arde!t0 +ne paneli!t noted" ,a clear trend of increa!ed vulnerabilit of t#e poore!t part of !ociet 0 *#e double #ammer of $ro;in$ ine<ualitie! and more fre<uent and deva!tatin$ di!a!ter! ma6e! t#e ta!6 of reducin$ e>treme povert #arder0. 9er!i!tent #ealt# and education c#allen$e! #amper #uman development0 Reducin$ maternal and c#ild mortalit " #altin$ non-communicable di!ea!e!" and improvin$ #ealt# infra!tructure are 6e concern!0 4#ile enrolment rate! #ave improved" t#e <ualit of education remain! ;ea6 in man countrie! and man !tudent! are !till unable to complete primar !c#oolin$0

S#oc6! #ave e>po!ed t#e inade<uac of !ocial protection ! !tem!

Recurrent economic and environmental !#oc6! #ave e>po!ed t#e inade<uac of !ocial protection ! !tem! in t#e re$ion0 Government! and t#eir development partner! mu!t do more to !afe$uard t#eir mo!t vulnerable t#rou$# !tron$er !afet net! and ot#er mea!ure!0 &urin$ cri!e!" a! one paneli!t noted" ,Countrie! did better in minimiGin$ dama$e if t#e #ad a !afet net ! !tem ;#ic# can be <uic6l implemented0 )ore ;or6 need! to be done in advance of a cri!i!0. &ebt !u!tainabilit i! a $ro;in$ concern in !ome countrie!0 +ne paneli!t !tre!!ed t#at t#i! ,i! particularl important for fra$ile !tate! and !mall i!land !tate! in t#e 9acific0. For !everal countrie!" capacit to !ervice public debt" includin$ debt to %&'" i! a c#allen$e" particularl ;it# fi!cal volatilit 0 Improvin$ infra!tructure remain! a priorit " but complementar noninfra!tructure inve!tment! are re<uired to ma>imiGe return!0 Su!tainabilit and maintenance of infra!tructure remain ;ea6" e!peciall in fra$ile and i!land !tate! ;#ere re!ource! and capacitie! are limited0 Improvin$ t#e inclu!ivene!! impact! of infra!tructure i! e<uall important0 *#e!e c#allen$e! are comple>" interlin6ed" and in !ome ca!e! inten!if in$" outpacin$ effort! b countrie! and t#eir development partner! to addre!! t#em0 %t t#e !ame time" t#ere i! $ro;in$ momentum for $reater participation b people in addre!!in$ t#e!e c#allen$e!0 *#i! brin$! t#e re$ion and it! development in!titution! to a critical 8uncture0 %! one paneli!t de!cribed it: ,%!ia !tand! at t#e cu!p of it! ne>t bi$ tran!formation a! it continue! to ret#in6 and reinve!t in it!elf0.

Implication! for %&'

Re!ilience i! no; an over;#elmin$ priorit

Some directional and or$aniGational !#ift! are e!!ential to improvin$ %&'(! re!pon!ivene!! and effectivene!!0 4it# t#e ever-$ro;in$ t#reat of climate c#an$e" t#e panel !tron$l encoura$ed %&' to en#ance !upport for di!a!ter ri!6 mana$ement and buildin$ re!ilience0 %! one ar$ued" ,Inve!tment in re!ilience mu!t become a core bu!ine!! of %&'0. *#i! include! !u$$e!tion! to !tren$t#en infra!tructure di!a!terproofin$ and e>pand ri!6 in!urance pro$ram!0 *#e need to #elp countrie! build re!ilience i! no; ,an over;#elmin$ priorit 0.

#ie$s %ro &'ternal &'"erts


'uildin$ re!ilience amon$ t#e mo!t vulnerable re<uire! !calin$ up !upport for !ocial protection and !afet net!0 %! one paneli!t put it" ,Given t#e increa!in$ level! of povert in part! of %!ia and it! di!a!ter ri!6 e>po!ure" inve!tment in !ocial protection need! to $ro;0. &oin$ !o ;ould al!o !tren$t#en %&'(! ac#ievement of it! inclu!ive $ro;t# a$enda0 *#e panel called for $reater !upport for $ender e<ualit and empo;erment in t#e re$ion0 *#i! i! ,a fundamental end in it! o;n ri$#t. ar$ued one paneli!t" and a prere<ui!ite for inclu!ive and !u!tainable development0 Governance i! a 6e determinant of development 2and development a!!i!tance3 !ucce!!0 *o ac#ieve better re!ult!" t#e panel pointed to t#e imperative of improvin$ $overnance and $overnment 2at all level!3 and t#e need for $reater ali$nment of a!!i!tance ;it# national prioritie! and ! !tem!0 ,Re!earc# !#o;! t#at $ood $overnance and development $o #and in #and". !tated one paneli!t0 *#e panel endor!ed %&'(! continued role in infra!tructure" but ;it# $reater effort! to increa!e it! inclu!ivene!! and !u!tainabilit 0 +ne paneli!t !u$$e!ted t#at infra!tructure deci!ion! !#ould be ba!ed on" ,;#ere impact ;ill be #i$#e!t in term! of 8ob creation" povert reduction" and increa!in$ liveli#ood!". and t#at complementar inve!tment! !#ould be made" ,!o t#at t#e impact of t#e connectivit i! felt0. Con!ideration can al!o be $iven to poolin$ of re$ional fund! for infra!tructure0 Comple>" interlin6ed" and inten!if in$ c#allen$e! re<uire more inte$rated" cro!!-!ector" and complementar intervention!0 4#ile t#i! i! in#erentl difficult" e!peciall in limited-capacit environment!" it i! increa!in$l nece!!ar 0 7i$#-level outcome! !uc# a! inclu!ive $ro;t# re!ult from complementar lo;er-level outcome! and ac#ievement!0 *#i! re<uire! %&' to improve it! collaboration and coordination ;it# partner!" includin$ non-traditional one!0 *o improve or$aniGational effectivene!! t#e panel made !everal !pecific !u$$e!tion!: 2i3 !tren$t#en overall !taff competenc " 2ii3 improve incentive! and encoura$ement for t#e mo!t <ualified !taff to ;or6 in t#e mo!t difficult environment!" 2iii3 devolve more deci!ion-ma6in$ aut#orit to countr office!" and 2iv3 !tren$t#en t#e evaluation function for better or$aniGational learnin$0 In t#e ;ord! of one paneli!t" ,Given t#e inten!it and va!tne!! of c#allen$e! faced b developin$ %!ia" bu!ine!! a! u!ual i! not $oin$ to be an option" and all development partner!" includin$ %&'" face t#e imperative to fulfill t#eir commitment!" ta6e deci!ive action and accord #i$# priorit to t#e poore!t and t#e mo!t vulnerable countrie!0. %not#er concluded t#at" ,%&' a! a re$ional public in!titution can and !#ould do more0.

xiii

Gender e<ualit i! a fundamental fundamental end in it! o;n ri$#t

Comple> c#allen$e! re<uire more inte$rated inte$rated intervention!

C7%9*ER 1

% C#an$in$ %!ia and 9acific Re$ion


10 *#e %!ian &evelopment 'an6 2%&'3 #a! underta6en a midterm revie; 2)*R3 of Strate$ 2020 to ta6e !toc6 of pro$re!! and determine ;#et#er t#e in!titution i! on cour!e to ac#ievin$ t#e !trate$ (! $oal! and ob8ective!01 *#e )*R a!!e!!e! implementation pro$re!! !ince 200B and con!ider! 6e i!!ue! and c#allen$e! for 2014= 202002 20 %t t#e re<ue!t of t#e 'oard of &irector!" Independent Evaluation committed to preparin$ a report on t#e implementation performance and continued relevance of Strate$ 20200 *#e report #a! been prepared in coordination ;it# %&'(! Strate$ and 9olic &epartment and ta6e! into account t#e findin$! of t#e )*R" ;#ic# it!elf dra;! e>ten!ivel on evidence from evaluation!0 @0 *#e report focu!e! mainl on i!!ue! for ;#ic# evidence from evaluation! i! available0 Re$ional cooperation and inte$ration" for e>ample" are not di!cu!!ed in dept# a! evaluation on t#i! topic i! pendin$0 *#e ot#er t;o !trate$ic a$enda! of inclu!ive $ro;t# and environmentall !u!tainable $ro;t# are addre!!ed" a! are t;o driver! of c#an$eHprivate !ector development 29S&3 and 6no;led$e !olution!0 *#e available evaluation re!ult! on $ender are out of date" and an evaluation of partner!#ip! i! !c#eduled for 201C" !o t#e!e driver! of c#an$e are not di!cu!!ed in dept#0 Governance" anot#er driver of c#an$e" i! #i$#li$#ted t#rou$#out t#e report bot# a! 2i3 a prere<ui!ite to !ucce!!full addre!!in$ t#e triple bottom line polic c#allen$e of !imultaneou!l fo!terin$ economic $ro;t#" ;#ile en!urin$ !ocial inclu!ion and environmental !u!tainabilit E and 2ii3 a critical component of !tren$t#enin$ t#e enablin$ environment for 9S&0 *#e report conclude! ;it# a di!cu!!ion of #o; %&' can #arne!! it! financial and #uman re!ource! to deliver better development outcome!0 %0 Strate$ 2020

40 4it# t#e adoption of Strate$ 2020" %&' reaffirmed it! vi!ion of an %!ia and 9acific re$ion free of povert " and it! mi!!ion to #elp developin$ member countrie! reduce povert and improve livin$ condition! and <ualit of life0 %&'(! vi!ion and mi!!ion are to be ac#ieved t#rou$# a multidimen!ional frame;or6 compri!in$ t#ree !trate$ic a$enda!E five driver! of c#an$eE differentiated approac#e! to %&'(! four main t pe! of developin$ member countrie!E and five core 2and t#ree non-core3 operational area! 2plu! t#ree ot#er area! of operation!30 )oreover" Strate$ 2020 pled$e! to
1

%&'0 200B0 Strate$ 2020: *#e :on$-*erm Strate$ic Frame;or6 of t#e %!ian &evelopment 'an6" 200B= 20200 )anila0 For more detail! on t#e )*R" refer to: #ttp:JJ;;;0adb0or$J!trate$ -2020-mid-term-revie;

4it# Strate$ 2020" %&' reaffirmed it! vi!ion of an %!ia and 9acific re$ion free of povert

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


tran!form t#e in!titution t#rou$# a !et of operational and in!titutional $oal! and tar$et!0 /nder Strate$ 2020" %&' committed to #avin$ B0I of it! operation! in core operational area! b 2012" !calin$ up 9S& and private !ector operation! 29S+3 to C0I of operation! b 2020" complementin$ ever dollar lent ;it# a dollar provided in cofinancin$" and #ave @0I of operation! promote re$ional inte$ration0 % compari!on of Strate$ 2020(! frame;or6 ;it# t#o!e in previou! %&' corporate !trate$ie! i! provided in %ppendi> 10 *#i! compari!on !#o;! t#at ;#ile %&'(! !trate$ic $oal! #ave lar$el remained !imilar" t#ere #a! been a narro;in$ of t#e mean! to ac#ieve t#em" in particular t#rou$# t#e identification of priorit !ector! in t#e )edium-*erm Strate$ II in 200D"@ and Strate$ 20200 C0 *o improve t#e in!titution(! effectivene!! in ac#ievin$ development outcome!" Strate$ 2020 adopted a re!ult! frame;or6 ;it# four level! to trac6 pro$re!! in lon$term development outcome!04 *#e main feature! of Strate$ 2020" in term! of c#allen$e! to t#e re$ion and %&'(! re!pon!e" are !ummariGed in Fi$ure 10

@ 4

%&'0 200D0 )edium-*erm Strate$ II" 200D=200B0 )anila0 *#e initial re!ult! frame;or6 ;a! revi!ed to reflect le!!on! from t#e fir!t C ear! of implementation0

A Changing Asia and Pacific Region


Figure 1: Strategy 2020 Main Features
9 Leading Challenges Facing the Region Disparities Demographic Changes En ironmental Strains !n"rastructure De"icit #o erty Regional Cooperation$!ntegration Financial Systems !nno ation% &echnology% 'igher Education (ea) *o ernance

+D, -ision and Mission

+n +sia and #aci"ic region "ree o" po erty 'elp DMCs reduce po erty and impro e li ing conditions and .uality o" li"e

S&R+&E*/ 2020
0 Strategic +gendas En ironmentally Sustaina1le *ro2th !nclusi e *ro2th Regional !ntegration

3 Dri ers o" Change

#ri ate Sector De elopment and 4perations

*ood *o ernance and Capacity De elopment

*ender E.uity

5no2ledge Solutions

#artnerships

6 Mem1er Country *roups

*raduated DMCs

Middle7!ncome Countries

Lo2er7!ncome Countries

Fragile Countries and Situations

3 Core 4perational +reas 8plus 0 others9

!n"rastructure

En ironment

Regional Cooperation and !ntegration

Finance Sector De elopment

Education

'ealth% +griculture% Disaster and Emergency +ssistance

+D, &rans"ormation to 2020

4perational *oals

!nstitutional *oals

Results Frame2or)

+D, : +sian De elopment ,an)% DMC : de eloping mem1er country;

,;

+ Changing +sia and #aci"ic Region


1; !ncome and Social !ne.uality

<; +lthough po erty reduction has progressed at an unprecedented rate in +sia and the #aci"ic% the region remains 3 home to 1;<6 1illion people 860= o" the population9 2ho li e on less than >2;00 a day; &his group includes ?00 million people 2ho li e in e@treme po erty% on less than >1;23 a day; !ncome disparities ha e gro2n in the 12 economies that account "or A0= o" the regionBs population; From the mid71990s to the late 2000s% the a erage *ini coe""icient "or the region as a 2hole 2orsened "rom 09 to < 6<% or 1y 1;6= per year; *ro2th has not generated enough decent% producti e employment; +s a conse.uence% a1out <0= o" the 2or)ers in +sia and the #aci"ic are

+lthough po erty reduction has progressed% the region remains home to 1;<6 1illion people 2ho li e on less than >2;00 a day

3 <

+ comprehensi e discussion o" de elopment changes in +sia and the #aci"ic is also included in the M&R; +D,; 2012; +sian De elopment 4utloo) 2012: Con"ronting Rising !ne.uality in +sia; Manila;

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


currentl en$a$ed in #i$#l vulnerable emplo ment" ;#ic# t#e are forced to accept becau!e of t#e ab!ence of ade<uate !ocial protection ! !tem!0K

*#e re$ion al!o face! $ro;in$ nonnon-income ine<ualit " notabl in education and #ealt#

K0 *#e re$ion al!o face! $ro;in$ non-income ine<ualit " notabl in education and #ealt#0 %lt#ou$# acce!! to ba!ic education #a! improved mar6edl " t#ree nation! in t#e re$ion #ave out-of-!c#ool population! t#at remain amon$ t#e #i$#e!t in t#e ;orld0 %cro!! t#e re$ion" ;omen !till face ;ide deficit! in education and" e!peciall " #ealt#0 In!ufficient antenatal care" and deliverie! t#at are over!een b un<ualified medical per!onnel" and contribute to #i$# maternal mortalit 0 *#i! i! t#e leadin$ cau!e of deat# amon$ adole!cent $irl! acro!! t#e re$ion" and t#e ma8or rea!on for lo; female life e>pectanc " particularl in Sout# %!ia0 Income and non-income ine<ualit " moreover" are mutuall reinforcin$" leavin$ t#e A00 million people livin$ on bet;een -102C and -2000 a da increa!in$l vulnerable to fallin$ bac6 into e>treme povert 0 20 Environmental Su!tainabilit

B0 E>pandin$ demand for natural re!ource!" accompanied b un!u!tainable and inefficient re!ource u!e pattern!" #a! led to conver$in$ economic" re!ource" and environmental c#allen$e!0 )an countrie! are increa!in$l concerned about t#e environmental impact! of $ro;t# a! it #a! been pur!ued to date0 *#e!e include ri!in$ urban air and ;ater pollutionE and $ro;in$ !oil ero!ion" de!ertification" and ;ater !carcit 0 *#e rate of $ro;t# in $reen#ou!e $a! emi!!ion! #a! al!o accelerated" mirrorin$ t#e trend! in overall material and ener$ u!e" ;it# %!ian countrie! e>pected to $enerate 4CI of $lobal ener$ -related emi!!ion! b 20@00 *#e!e trend!" coupled ;it# rapid urbaniGation" climate c#an$e" and defore!tation" po!e a t#reat to future development outcome!0 A0 Citie! in %!ia are $ro;in$ at an unprecedented paceE t#e re!ultin$ con$e!tion" ;a!te" pollution" and a!!ociated #ealt# impact! remain 6e c#allen$e! in !u!tainin$ urban development0 +ne important manife!tation of t#i! urbaniGation trend i! a decline in inve!tment! in a$riculture and rural development0 *#i! #a! re!ulted in a corre!pondin$ lac6 of opportunitie! in t#e re$ion(! rural area!" ;#ere t#e ma8orit of t#e poor live 2footnote K30

4it# a fourfold ri!e in flood! and !torm!" climate c#an$e #a! become an imminent and e>i!tential dan$er

100 Climate c#an$e i! a !eriou! t#reat to t#e economic pro!perit of t#e re$ion0B 4it# a fourfold ri!e in flood! and !torm!" climate c#an$e #a!" in fact" become an imminent and e>i!tential dan$er in a $ro;in$ number of countrie!0 %nd ;#ile t#e effect! of environmental de$radation and climate c#an$e affect ever one" t#e poor are t#e lea!t able to eit#er miti$ate or adapt" addin$ anot#er la er to t#eir vulnerabilit 0 110 Climate c#an$e t#reaten! fore!t! on an alarmin$ !cale" et defore!tation i! not #i$#li$#ted a! !uc# in t#e )*R" alt#ou$# it account! for one-fift# of all $reen#ou!e $a! emi!!ion!0 *#e ma8orit of countrie! in Sout#ea!t %!ia #ave been e>po!ed to a net lo!! of t#eir natural fore!t! durin$ 2000=2012" in turn leadin$ to reduced biodiver!it 0A *#e $loball !i$nificant biodiver!it and natural re!ource! of %!ia and t#e 9acific provide
K

/nited Nation! Economic and Social Commi!!ion for %!ia and t#e 9acific" /nited Nation! &evelopment 9ro$ramme" and %&'0 %!ia 9acific %!piration!: 9er!pective! for a 9o!t-201C &evelopment %$enda 2%!ia9acific Re$ional )illennium &evelopment Goal! Report 2012J201@30 10 *#oma!" N0R0 %lbert" and R0 9ereG0 201@0 Climate-Related &i!a!ter! in %!ia and t#e 9acific0 Economic! 4or6in$ 9aper Serie! @CB0 )anila: %&'0 7an!en" et al0 201@0 7i$#-Re!olution Global )ap! of 21!t-Centur Fore!t Cover C#an$e0 Science0 @42 2D1D030 9p0 BC0-BC@0 #ttp:JJeart#en$inepartner!0app!pot0comJ!cience-201@-$lobal-fore!t

A Changing Asia and (aci%ic Region


!u!tenance for million! of t#e re$ion(! re!ident!Hincludin$ t#rou$# !eafood and a$ricultural product!" fodder" fuel ;ood" timber" and medicineHin addition to !ervin$ a vital role in a!!imilatin$ ;a!te!" rec clin$ nutrient!" re$ulatin$ t#e climate" and rec#ar$in$ a<uifer!010 120 *#e !ocioeconomic and environmental trend! outlined above indicate t#at t#ere are ri!6! a!!ociated ;it# a traditional development pat# of pur!uin$ $ro;t# fir!t" and miti$atin$ e>ternalitie! later0 /nfortunatel " t#e 5uGnet! curve provide! little #ope t#at" in t#e ab!ence of deliberate action!" t#e!e ne$ative trend! ;ill be rever!ed in time to addre!! t#e immediate c#allen$e! t#at t#e %!ia and t#e 9acific re$ion face!E indeed" a rever!al could come too late" after an environmental tippin$ point #a! been reac#ed011 @0 Governance

1@0 7i$#-<ualit " re!ult!-focu!ed public !ector mana$ement 29S)3 i! a prere<ui!ite to addre!!in$ t#e triple bottom line" ;#ic# i! a fundamental polic c#allen$e for %!ia and t#e 9acific: !imultaneou!l !u!tainin$ economic $ro;t# ;#ile en!urin$ !ocial inclu!ion and environmental !u!tainabilit 0 In addition" $overnance i! a 6e component of t#e enablin$ environment for 9S&0 Governance indicator! !u$$e!t t#at t#e overall <ualit of $overnance in t#e re$ion #a! !ta$nated durin$ 200@=2012 2Fi$ure 230 :imited pro$re!! on t#e control of corruption and $overnment effectivene!! i! off!et b !li$#t deterioration! in voice and accountabilit " re$ulator <ualit and t#e rule of la;0 %! a con!e<uence" t#e re$ion !till #a! a limited abilit to effectivel re!pond to comple> polic c#allen$e!" provide public !ervice! and ac#ieve development re!ult! and outcome!0 Fi$ure 2: %vera$e 9ercentile Ran6in$ of %&' &evelopin$ )ember Countrie! 200@=2012 200@ 2012 50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00

2003 2012

%&' L %!ian &evelopment 'an60 Source: 4orld;ide Governance Indicator!0 #ttp:JJinfo0;orldban60or$J$overnanceJ;$iJinde>0a!p>O#ome

10

11

%&'0201@0 Environment +perational &irection! 201@=2010H9romotin$ *ran!ition! to Green Gro;t# in %!ia and t#e 9acific0 )anila0 90 9etri" and 10 *#oma!0 201@0 &evelopment Imperative! for t#e %!ian Centur 0 %&' Economic! 4or6in$ 9aper Serie! @D00 )anila: %&'0

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


140 % !in$le approac# to $overnance improvement! doe! not e>i!t0 :o;-income countrie! need to improve $overnment effectivene!!" t#e <ualit of re$ulation!" and t#e rule of la;" and e>pand corruption control! to !upport $ro;t#0 )iddle-income countrie! 2)IC!3 face t#e c#allen$e of re!pondin$ to t#e a!piration! of a $ro;in$ middle cla!!" and demand! for a $reater !a in t#e development proce!!0 Inflo;! of lo;-intere!t forei$n capital into %!ia ma #ave allo;ed !ome countrie! to reduce t#e pace of $overnance reform!" but recent financial mar6et volatilit and a !lo;in$ of economic activit #ave added fre!# ur$enc to lon$-term !tructural action! to en!ure development $ain! are pre!erved" and future $ro;t# benefit! all0 12

C0

Implication! for %&'

4#ile Strate$ 2020P! a$enda! remain relevant" t#e need to be updated operationall % more balanced portfolio to deliver inclu!ive outcome! i! needed

1C0 4#ile Strate$ 2020(! t#ree !trate$ic a$enda! remain relevant to %!ia and t#e 9acific" t#e need to be updated operationall to deliver !tron$er outcome! in t#e face of #ei$#tened c#allen$e!0 In t#i! re!pect" %&'(! deci!ion to carr out a )*R of Strate$ 2020 i! commendable0 *#e revie; i! a valuable opportunit to dra; on le!!on! from t#e fir!t C ear! of t#e !trate$ (! implementation" includin$ t#o!e from evaluation0 %&' mu!t !eiGe t#i! opportunit to revie; e>perience and ma6e t#e c#an$e! nece!!ar to deliver better re!ult!0 10 *#e *#ree Strate$ic %$enda!

1D0 Inclu!ive $ro;t#0 Succe!!ive $uideline! #ave !tre!!ed t#e contribution of t#e portfolio to inclu!ive $ro;t#Ht#e fir!t !trate$ic a$enda of Strate$ 2020Ht#rou$# t#ree pillar! of intervention!: #i$# $ro;t# mainl 2pillar 13" acce!! to opportunitie! 2;#ile !ometime! al!o addre!!in$ $ro;t#3 2pillar 23" and !ocial protection 2pillar @30 Given t#e ob!erved trend of ri!in$ ine<ualit in %!ia" %&' !#ould aim for $reater inclu!ion acro!! it! !overei$n and non-!overei$n operation! in all !ector!0 % clear and monitored focu! need! to be $iven to includin$ t#e poor 2i0e0" t#e lo;er #alf of t#e income di!tribution3 in all %&' operation!0 *o t#i! end" a more balanced portfolio of infra!tructure and !ocial and environmental operation! to deliver inclu!ive outcome! i! needed" alon$ ;it# $reater balance acro!! pillar! 1" 2" and @0 C#apter 2 provide! more di!cu!!ion of t#e inclu!ive $ro;t# a$enda0 1K0 Environmentall !u!tainable $ro;t#0 *#e ur$enc for t#e !econd !trate$ic a$endaHenvironmentall !u!tainable $ro;t#Hi! #ei$#tened b !evere environmental de$radation and more fre<uent climate-related di!a!ter!0 'ot# public and private !ector ener$ portfolio! #ave !een an appropriate increa!e in climate-friendl inve!tment!" but a !imilar increa!e #a! not et occurred in t#e tran!port portfolioE overall" t#e problem! far outpace t#e re!pon!e" from %&' and t#e re$ion0 Given t#e focu! of %&' on infra!tructure" and t#e re$ion(! e>treme vulnerabilit to climate di!a!ter!" Independent Evaluation loo6! to %&' to ma6e a far-reac#in$ operational contribution in confrontin$ climate c#an$e adaptation" climate miti$ation" and di!a!ter ri!6 mana$ementHb tappin$ t#e va!t climate fund! and levera$in$ it! o;n re!ource!0 *#ere are po!itive e>ample! in t#e private !ector and rene;able ener$ " but t#e need to be va!tl e>panded0 *#e recent evaluation of %&'(! !upport for t#e )illennium &evelopment

12

%&'0 201@0 %!ian &evelopment +utloo6 201@ /pdate: Governance and 9ublic Service &eliver 0 )anila0

A Changing Asia and (aci%ic Region


Goal! 2)&G!3Hparticularl )&GK 2En!ure Environmental Su!tainabilit 3Hal!o pointed in t#i! direction01@ 1B0 *o$et#er ;it# t#e continued focu! on $ro;t#" t#e rene;ed !tre!! on inclu!ivene!! and t#e environmental imperative impl t#at %&' mu!t !upport a triple bottom line polic re!pon!e0 *#i! approac# ;ill #elp ali$n %&'(! commitment to t#e po!t-201C development a$enda and emer$in$ !u!tainable development $oal!0 1A0 Follo;in$ a !erie! of deva!tatin$ natural di!a!ter!Hin t#e 9eople(! Republic of C#ina 29RC3" India" 9a6i!tan" t#e 9#ilippine!" *#ailand" and el!e;#ereHt#e need for %&' to #elp build di!a!ter ri!6 mana$ement capacit i! e!peciall ur$ent0 %&' #a! a trac6 record in t#i! area: it! di!a!ter recover pro8ect! often #ave a #i$#er !ucce!! rate t#an %&'-!upported pro8ect! overall0 % !#ift from t#e limited ob8ective of re!torin$ particular t pe! of infra!tructure in t#e affected area! to re#abilitatin$ liveli#ood!" or increa!in$ di!a!ter re!ilience b buildin$-bac6-better i! timel in vie; of t#e fre<uenc of t#e calamitie! t#e affected countrie! #ave e>perienced014 *#e !econd !trate$ic a$enda i! di!cu!!ed in detail in C#apter @0 200 Re$ional Inte$ration0 Strate$ 2020 #a! #elped to promote t#e t#ird !trate$ic a$enda relatin$ to re$ional inte$ration0 'a!ed on an on$oin$ evaluation"1C mo!t of t#e lendin$ !upport ;a! provided for tran!port and ener$ connectivit pro8ect! in t#e area! of road" rail" # dropo;er $eneration" and electricit tran!mi!!ion and di!tribution0 )ore limited !upport" muc# of it non-lendin$" #a! been provided for trade facilitation" touri!m" natural re!ource! mana$ement" #ealt# and capital mar6et! development pro8ect!0 %&' i! ;ell po!itioned to !upport re$ional public $ood!" for ;#ic# en#anced polic dialo$ue ;it# !ta6e#older! i! a 6e factor0 % recent IE& paper !u$$e!t!" for e>ample" t#at %&' can pla a uni<ue role in facilitatin$ re$ional dialo$ue and cooperation on food !ecurit 01D *#ere i! al!o a need to balance better t#e infra!tructure and in!titutional a!pect! of re$ional p# !ical connectivit " a! !u$$e!ted in an evaluation focu!in$ on t#e Greater )e6on$ Subre$ion01K Evaluation! done in t#e 9acific al!o provide $ood e>ample! of re$ional cooperation on ;#ic# %&' can build0 20 *#ematic &river! of C#an$e

*#e need to build di!a!ter ri!6 mana$ement capacit i! e!peciall ur$ent

*#ere i! a need to balance better t#e infra!tructure and in!titutional a!pect! of re$ional connectivit

210 Governance0 %ll t#ree a$enda! re<uire $ood $overnance" but $overnment effectivene!! remain! a ma8or concern in t#e re$ion" a! evidenced b variou! countr a!!i!tance pro$ram evaluation!0 It i! e!!ential t#at %&' maintain !upport to en#ance $overnance in t#e public !ector t#rou$# it! !ector operation!" 9S) operation!" and tec#nical a!!i!tance 2*%3 pro8ect!0 %n on$oin$ evaluation of %&'(! !upport for $ood $overnance find! continued demand for %&' !upport in t#i! area01B

It i! e!!ential t#at %&' maintain !upport to en#ance $overnance

1@

IE&0 201@0 *#ematic Evaluation Stud : %&' Support for %c#ievin$ t#e )illennium &evelopment Goal!0 )anila: %&'0 14 *#e concept of ,buildin$ bac6 differentl and el!e;#ere. #a! recentl been introduced b polic ma6er! in t#e di!a!ter ri!6 mana$ement communit 0 1C IE&0 Fort#comin$0 *#ematic Evaluation Stud : Re$ional Cooperation and Inte$ration0 )anila: %&'0 1D IE&0 201@0 4or6in$ 9aper: Food Securit C#allen$e! in %!ia0 )anila: %&'0 1K IE&0 200B0 Re$ional Cooperation and %!!i!tance 9ro$ram Evaluation: Greater )e6on$ Subre$ion" )aturin$ and )ovin$ For;ard0 )anila: %&'0 1B IE&0 Fort#comin$0 *#ematic Evaluation Stud on %&' Support for En#ancin$ Governance in it! 9ublic Sector +peration!0 )anila: %&'0

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


220 9rivate !ector operation!0 %! indicated in C#apter 4" operation! in t#e private !ector are envi!a$ed to $ro; rapidl 01A *#e tar$et of increa!in$ 9S& and 9S+ 2combined3 to C0I of %&'(! annual operation! b 2020 i! a $ood $oal" particularl in li$#t of t#e private !ector(! increa!in$ importance a! a !ource of $ro;t#" particularl in )IC!" and t#e decrea!in$ importance of official development a!!i!tance 2+&%3 relative to non-+&% inflo;!0 Recent evaluation findin$! !u$$e!t t#at ade<uate !upport for an enablin$ environment ;ill be re<uired to en#ance entrepreneur!#ip and private inve!tment" includin$ under public=private partner!#ip 29993 model!0 In addition" more effort i! needed to !upport inclu!ive $ro;t# t#rou$# 9S+0 %&' can pa more ! !tematic attention to increa!in$ inclu!ivene!! of 9S+" $iven evidence t#at !uc# a focu! need not undermine profitabilit 0 2@0 5no;led$e0 %! !tre!!ed in a 2012 evaluation" ;#at could !et %&' apart in ac#ievin$ outcome! ;ould be it! deliver of 6no;led$e" from bot# operation! and re!earc#020 &e!pite effort! to improve" and a number of !ucce!!e!" !ome critical con!traint! 6eep %&' from becomin$ a more effective 6no;led$e in!titution0 Stren$t#enin$ 6no;led$e !ervice! for client! re<uire!" above all" pullin$ to$et#er all of %&'(! currentl fra$mented 6no;led$e" and ma6in$ it available ;#en needed0 Improvement! are needed to identif 6no;led$e need!" capture and !#are tacit 6no;led$e" and inte$rate 6no;led$e in operation! to !upport development outcome!E t#e!e are di!cu!!ed in C#apter C0 @0 +perational and In!titutional Implication! Implication!

%&' can pa more ! !tematic attention to increa!in$ inclu!ivene!! of 9S+

*#e tar$et of B0I of operation! in core area! #a! led to an overemp#a!i! on infra!tructure

%&'(! !elective en$a$ement at t#e countr level !#ould be driven b a countr (! 240 de!ired development outcome!" includin$ 6no;led$e need!" and b opportunitie! for partner!#ip!" rat#er t#an b uniform operational tar$et!" !et b %&' on a re$ional ba!i!0 *#e top-do;n tar$et of B0I of operation! in five core area! #a! in practice led to a con!i!tent overemp#a!i! on infra!tructure to t#e detriment of non-core area!" ;#ic# can be e!!ential for development outcome!0 % lar$e number of countr partner!" moreover" #ave a!6ed for increa!ed !upport in t#e non-core area! of #ealt#" a$riculture and inte$rated di!a!ter ri!6 mana$ement0 %&' !#ould move a;a from t#i! tar$et and t#e core or non-core di!tinction0 2C0 In addition" t#e current climate of con!trained fi!cal !pace in traditional donor countrie! #a! $iven ne; ur$enc to t#e <ue!t for innovative partner!#ip! and financin$ approac#e!" notabl includin$ t#e levera$in$ of private fund! 2'o> 130

1A

20

IE&0 Fort#comin$0 *#ematic Evaluation Stud : %&' Support for Stren$t#enin$ t#e Enablin$ Environment for 9rivate Sector &evelopment0 )anila: %&'0 IE&0 20120 Special Evaluation Stud on 5no;led$e 9roduct! and Service!: 'uildin$ a Stron$er 5no;led$e In!titution0 )anila: %&'0

A Changing Asia and (aci%ic Region


'o> 1: %!ia(! Evolvin$ &evelopment Finance :and!cape *#e development financin$ land!cape #a! dra!ticall c#an$ed over t#e pa!t 10 ear!0 Since t#e 2002 )ontere Con!en!u! on &evelopment Financin$" t#e importance of non-+&% flo;! #a! !i$nificantl increa!ed0 Non-+&% flo;! no; account for more t#an B0I of re!ource! flo;in$ into developin$ countrie!" ;it# t;o-t#ird! of t#o!e re!ource! comin$ from t#e private !ector" and t#e remainin$ one-t#ird from ot#er !ource! !uc# a! per!onal remittance! and c#aritable foundation!0 In t#e ma8orit of middle-income countrie!" more t#an C0I of flo;! are non-+&%E in lo;er-income countrie! t#i! i! le!! t#an 20I0 )oreover" ne; donor!H!uc# a! 'raGil" t#e 9eople(! Republic of C#ina" India" )e>ico" and Sout# %fricaHare emer$in$E t#e!e act on a more di!cretionar ba!i! rat#er t#an t#rou$# t#e pled$ed commitment! t pical of traditional donor countrie!0 *#e importance of IFI! a! development financier! i! no; decrea!in$" !o t#eir continued relevance mu!t be manife!ted in different ;a !" notabl b levera$in$ non-+&% fund! and providin$ e>pert advi!or and 6no;led$e !ervice!0
IFI L international financial in!titution" +&% L official development a!!i!tance0 Source: +r$ani!ation for Economic Co-operation and &evelopment0 Re!ource Flo;! 'e ond +&% in &%C Stati!tic!0 #ttp:JJ;;;0oecd0or$JdacJ!tat!Jbe ond-oda0#tm

2D0 It i! imperative to maintain !6ill! in 6e operational area!" and deplo t#em effectivel " et t#e current or$aniGational !etup #a! led to a fra$mentation of !6ill! and 6no;led$e" unclear mandate!" and coordination c#allen$e!0 % revie; of t#e or$aniGational !tructure" includin$ of t#e potential $ain! of decentraliGation" ;ould be timel to addre!! t#e!e i!!ue! and en!ure t#at t#e appropriate talent i! a!!i$ned in t#e ri$#t po!ition!" at t#e ri$#t time0 2K0 'uildin$ on recent improvement!" ever effort i! no; needed to ac#ieve 2and !urpa!!3 t#e $oal of B0I !ucce!!ful pro8ect!0 *#e $reate!t effort !#ould be directed to outcome! and !u!tainabilit " ;#ic# are t#e criteria mo!t relevant to impact0 In !um" to deliver better re!ult! ;it# limited re!ource!" %&' need! to #arne!! all it! re!ource!H includin$ at #ead<uarter! and in countrie!" in public and private !ector!" and ;#et#er focu!ed on countr or t#ematic ;or60 *#e drive of %&' leader!#ip to pur!ue $reater development outcome! remain! 6e E accountabilit for outcome! 2rat#er t#an output!3 ;ould be a far reac#in$ c#an$e0 %n emp#a!i! on 6no;led$e buildin$ and !#arin$ i! a natural ;a to ma>imiGe development return!0 *#e!e approac#e! can be underpinned b performance evaluation" reco$nition" and re;ard ! !tem!0 % more detailed di!cu!!ion on t#i! i! included in C#apter D0

'uildin$ on recent improvement!" ever effort i! no; needed to ac#ieve t#e $oal of B0I !ucce!!ful pro8ect!

C7%9*ER 2

Inclu!ive Gro;t#
Economic $ro;t# in developin$ countrie! in %!ia #a! been remar6able" but not inclu!ive
2B0 Economic $ro;t# in developin$ countrie! in %!ia !ince t#e earl 1AA0! #a! been remar6able" but not inclu!ive021 9overt " di!paritie!" and ot#er c#allen$e! remain perva!ive0 *#e re$ion i! !till #ome to t#ree-fift#! of t#e ;orld(! undernouri!#ed and #a! t#e lar$e!t number of poor and deprived people0 Ine<ualit #a! $ro;n acro!! mo!t part! of t#e re$ion and i! no; more pronounced in %!ia t#an in mo!t ot#er developin$ re$ion!022 2A0 9er!i!tent ine<ualit can impede $ro;t# pro!pect! and !u!tainabilit 0 7i!torical e>perience" a! illu!trated b 5uGnet! curve 2Fi$ure @3" !u$$e!t! t#at income $ro;t# #a! correlated !o far ;it# lo;er ine<ualit over time0 7o;ever" t#i! proce!! ma not nece!!aril continueE even if it doe!" it ma come too late for man %!ian countrie!" ma6in$ t#e traditional !e<uencin$ of $ro;in$ fir!t t#en addre!!in$ ne$ative e>ternalitie! later #i$#l ri!6 02@

21

22

2@

*#i! c#apter dra;! #eavil on findin$! from t#e on$oin$ IE& !tud " IE&0 Fort#comin$0 *#ematic Evaluation Stud : %&'(! Support for Inclu!ive Gro;t#0 )anila: %&'0 'roadl defined" inclu!ive $ro;t# i! $ro;t# ;it# !ocial e<uit " or a $ro;t# proce!! in ;#ic# all !e$ment! of t#e population can participate" e!peciall t#e poor" and it concern! t#e impact of economic $ro;t# in reducin$ povert and ine<ualit " and broadenin$ economic opportunit 0 *#i! differ! from pro-poor $ro;t#" ;#ic# deal! onl ;it# t#e effectivene!! of $ro;t# in reducin$ povert 0 International )onetar Fund0 201@0 *#e Elu!ive ?ue!t for Inclu!ive Gro;t#: Gro;t#" 9overt " and Ine<ualit in %!ia0 I)F 4or6in$ 9aper 49J1@J1C20 4a!#in$ton" &C0 %&'0 201@0 &evelopment Imperative! for t#e %!ian Centur 0 %&' Economic! 4or6in$ 9aper Serie!" No0 @D00 )anila0

Inclusi!e )ro$th
Fi$ure @: *#e 5uGnet! Curve for Gini Coefficient!" 200A 2per capita income in -000(!3 70 60 50
Gini coefficient

11

40 30 20 10 2.0 2.5
Log (Per capita income in $)

3.0

3.5

4.0

4.5

Note:

diamond! L %!ian countrie!" !<uare! L ot#er countrie!0 *#e central curve i! a <uadratic function of lo$2income per capita3" plotted alon$ t#e #oriGontal a>i!0 +t#er t;o curve! !#o; QJ= one !tandard error0 Source!: %&'0 201@0 &evelopment Imperative! for t#e %!ian Centur 0 %&' Economic! 4or6in$ 9aper Serie! No0 @D00 )anilaE and calculation! ba!ed on 4orld 'an6 data0

@00 &i!paritie! in income di!tribution coe>i!t ;it# ine<ualit in opportunitie!" in particular acce!! to ba!ic !ocial !ervice!0 Recent a!!e!!ment! of %!ia(! pro$re!! in ac#ievin$ t#e )&G! find t#at ;#ile acce!! to ba!ic education #a! $enerall improved" acce!! to #ealt# care" ;ater and !anitation" !afet net!" and emplo ment opportunitie! !till la$!0 *#e!e area! re<uire $reater attention and re!ource! from countrie! and t#eir development partner! 2footnote 1@30 @10 Recurrent economic !#oc6! and natural di!a!ter!" t#reat! to food !ecurit " a lac6 of 8ob! in t#e face of a rapidl $ro;in$ labor force" and rapid urbaniGation are factor! t#at ;ill affect t#e re$ion(! abilit to bot# $ro; and ac#ieve $reater inclu!ion0 Furt#ermore" t#e re$ion i! al!o far from ac#ievin$ $ender e<ualit " ;it# ;omen in man countrie! in %!ia and t#e 9acific !till facin$ ;ide deficit! in education and #ealt#0 In combination t#e!e c#allen$e! point to an even $reater need to focu! on inclu!ivene!!Hand for more effective !upport for t#i! !trate$ic a$enda0

%0

%&'(! Re!pon!e

@20 Reco$niGin$ t#at povert reduction i! impacted b bot# t#e pace and pattern of $ro;t#" Strate$ 2020 made inclu!ive $ro;t# an in!titutional priorit " and provided a ba!ic frame;or6 built on t#ree mutuall -reinforcin$ pillar!: #i$#" !u!tainable $ro;t# 2pillar 13E broader acce!! to opportunitie! 2pillar 23E and !ocial protection and !afet net! 2pillar @30 'ut implementin$ t#i! a$enda #a! been c#allen$in$0 *#ere #a! been confu!ion ;#et#er Strate$ 2020 committed to !upportin$ an of t#e pillar!" or all of t#em0 *#e frame;or6 provided no clear indicator! or tar$et!" ma6in$ it difficult to incorporate inclu!ive $ro;t# element! into t#e pro8ect cla!!ification ! !tem and reflect t#e!e in t#e corporate re!ult! frame;or60 )oreover" Strate$ 2020(! prioritiGation of five core operational area!24Hin t#e ab!ence of clear tar$et! for ot#er area!H
24

Strate$ 2020 made inclu!ive $ro;t# an in!titutional priorit

Strate$ 2020(! five priorit area!" ;#ic# are to account for B0I of operation!" are infra!tructure" environment" re$ional cooperation and inte$ration" finance !ector development" and education0

12

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


effectivel removed an priorit for ot#er area!" includin$ #ealt# and !ocial protectionE t#i! occurred de!pite t#e fact t#e!e area! are of critical importance" accordin$ to %&'(! o;n inclu!ive $ro;t# frame;or60 4it#in t#e five core operational area!" infra!tructure" environment and re$ional operation! are ver broad in !cope" and t#i! #a! led to t#eir cro;din$ out t#e relativel limited and more defined area! of !uc# a! education and finance0

)ore attention to ine<ualit i! re<uired

@@0 )ore attention to ine<ualit ;it#in t#e inclu!ive $ro;t# a$enda i! re<uired" $iven t#at ine<ualit #a! ri!en in man countrie!0 *#e ori$inal inclu!ive $ro;t# frame;or6 c#aracteriGed a $ro;t# proce!! a! inclu!ive even ;#ere povert i! declinin$ but ine<ualit i! ri!in$" a! in t#e 9RC and India0 @40 Recent effort! aim to addre!! !ome of t#e!e c#allen$e!0 In 2012" %&' added an indicator on inclu!ive $ro;t# 2;it# t#ree !ub-indicator!3 to t#e re!ult! frame;or6" enablin$ better monitorin$ of pro8ect! !upportin$ inclu!ive $ro;t#0 In 201@HC ear! after adoptin$ t#e inclu!ive $ro;t# a$endaH%&' i!!ued inclu!ive $ro;t# operational $uideline! t#at pre!ent a more refined frame;or6 and $ive better $uidance for !taff0 *#e!e $uideline! do not !u$$e!t #o; muc# emp#a!i! i! to be $iven to eac# of t#e t#ree indicator! and t#e operation! to ;#ic# t#e refer" but !tate t#at pro$re!! on all t#ree pillar! i! re<uired for $ro;t# to be cla!!ified a! inclu!ive" even ;#ile !upport ;ill #ave to be !elective" in line ;it# it! e!tabli!#ed prioritie! and re!ource ba!e02C @C0 Nonet#ele!!" t#e $uideline! do clarif t#at %&' cannot e>clu!ivel !upport 8u!t an of t#e pillar! in a particular conte>t0 &eterminin$ t#e emp#a!i! amon$ t#e t#ree pillar! !#ould be driven mo!tl b t#e countr conte>t" ;#ic# in turn re<uire! !ound inclu!ive $ro;t# dia$no!tic! a! part of pro$ram and countr partner!#ip !trate$ 2C9S3 de!i$n0 @D0 %&' #a! adopted numerou! policie!" plan!" and $uideline! !ince 200B" !ome of ;#ic# clearl reflectHand tr to !upportH t#e a$enda0 For e>ample" t#e 2011 Financial Sector +perational 9lan emp#a!iGe! financial inclu!ion t#rou$# microfinance" rural financial in!titution!" and !upport to !mall and medium-!iGed enterpri!e! 2S)E!302D %ppendi> 2 li!t! ma8or policie!" plan! and $uideline! adopted !ince 200B0 @K0 )ore effort i! needed to deepen and broaden inclu!ive $ro;t# anal tic! in countr !trate$ie!0 % revie; of recent C9S found t#eir anal !e! of countr pro$re!! and con!traint! placed more focu! on $ro;t# 2pillar 13" ;it# limited anal !i! of broadenin$ acce!! to economic opportunitie! and providin$ ade<uate !afet net!02K 4it# t#e e>ception of t#e 9RC" and to a le!!er e>tent )on$olia and *a8i6i!tan" articulation! of inclu!ive $ro;t# in t#e !even countrie! covered b t#e on$oin$ evaluation primaril addre!! $ro;t# and income povert " but $enerall omit di!cu!!ion of acce!! to opportunitie! or !afet net!0 @B0 *#e 2012 <ualit -at-entr 2?%E3 e>erci!e found !imilar re!ult! in it! !ample of C9S adopted in 2010=20110 4#ile it found mo!t C9S !ati!factor in t#eir promotion of inclu!ion" t#i! ;a! ba!ed on more $eneral commitment! to !u!tainable $ro;t# and emplo ment $eneration0 *#e ?%E found t#at mo!t C9S: 2i3 did not clearl addre!! !ocial protection" direct #ealt# care !ervice!" !afet net!" or acce!! to a!!et!E and 2ii3 did not
2C 2D

%&'0 201@0 Guideline! on Inclu!ive Economic Gro;t# in t#e Countr 9artner!#ip Strate$ 0 )anila0 %&'0 20110 Financial Sector +perational 9lan0 )anila0 2K Conducted in connection ;it# IE&(! on$oin$ inclu!ive $ro;t# evaluation

Inclusi!e )ro$th
al;a ! indicate ;#et#er t#e!e area! ;ere ade<uatel !upported b ot#er development partner!0 @A0 +perationall " t#e adoption of t#e inclu!ive $ro;t# a$enda in 200B made virtuall no difference in pro8ect approval! and t#e portfolio0 %&' ;a! to !upport inclu!ive $ro;t# primaril t#rou$# operation! in infra!tructure" education" and ot#er e!!ential !ervice! !uc# a! ;ater and !anitation0 'ut a revie; of loan approval! !#o;! no ma8or di!tributional c#an$e $oin$ bac6 over a decade0 %pproval! #ave remained concentrated in infra!tructureHprimaril tran!port" ener$ " and ;ater !uppl and ot#er municipal infra!tructure !ervice!H;#ic# to$et#er accounted for an avera$e of CCI of t#e portfolio durin$ 2004=200B" and CDI durin$ 200A=201@ 2Fi$ure 430 %&' e!timate! t#at infra!tructure alone 2acro!! all !ector!3 made up !ome DKI of approval! in 200@= 200K" and increa!ed to K2I durin$ 200B=201202B 4#ile infra!tructure can promote inclu!ive $ro;t#" t#i! cannot automaticall be pre!umed 2'o> 230 Fi$ure 4: S#are of %pproval! in Infra!tructure and +t#er %rea! 2004= 2004=201@ 2b value3
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2004 2005 2006 2007 2008 2009 All others 2010 2011 2012 2013 TRA, ENE, WMS

13

4#ile infra!tructure can promote inclu!ive $ro;t#" t#i! cannot automaticall be pre!umed

56%

58% 45%

59%

55% 39%

60%

65%

62%

56%

ENE L ener$ " *R% L tran!port" 4)S L ;ater !uppl " and ot#er municipal infra!tructure !ervice!0 Note: *#e bul6 of infra!tructure inve!tment! compri!e of ENE" *R%" and 4)S pro8ect!0 *#e do;nturn in infra!tructure approval! to @AI in 200A ;a! t#e re!ult of ma8or counter-c clical !upport pro$ram! approved t#at ear0 Source: Independent Evaluation &epartment0

400 For infra!tructure" $iven limited re!ource!" t#e c#oice of pro8ect! !#ould be ba!ed on ma>imiGin$ impact! in term! of 8ob creation" povert reduction" and increa!in$ people(! liveli#ood!0 *#ere !#ould al!o be a concentration of ot#er pro8ect! andJor pro$ram! focu!ed in t#e !ame area !o t#at t#e impact of t#e connectivit i! felt0

2B

%&'0 201@0 Strate$ 2020: Implementation 9ro$re!! 200B=20120 )anila0

14

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


'o> 2: Inclu!ive Impact! of Infra!tructure Infra!tructure i! e!!ential for developmentE durin$ 200B-2012 %&' committed -4K billion" or nearl t#ree-fourt#! of t#e total loan re!ource! of -DC billion" to infra!tructure pro8ect!0 *ran!port" ener$ " ;ater" !anitation" and ot#er ba!ic !ervice! and facilitie! enable !ocial and economic pro$re!!" and it i! fairl ;ell e!tabli!#ed t#at p# !ical inve!tment! in t#e!e area! can promote inclu!ive $ro;t#0 *#i! occur! t#rou$# t#e creation of 8ob!" e>pan!ion of economic activit " improvement! in connectivit " and ot#er mean!0 'ut infra!tructure inve!tment cannot automaticall be pre!umed to promote inclu!ive $ro;t#0 &ifferent t pe! of infra!tructure #ave var in$ effect! on $ro;t# and povert reduction" a! borne out b man ear! of evidence from evaluation!0 Some infra!tructure pro8ect! can e>pand acce!! but #ave little impact on income or vulnerabilitie!0 Rail;a ! and toll road!" for in!tance" can #elp connect ma8or urban area! and !pur overall economic $ro;t#" but t#e ma not directl improve education and #ealt# opportunitie! or !upport liveli#ood! for t#e poor0 +n t#e ot#er #and" !ome infra!tructure #a! $enerall !tron$er" more direct inclu!ivene!! impact!0 For e>ample" rural road! often #ave direct effect! on t#e poor0 7i$#;a ! ;it# labor-inten!ive con!truction and inclu!ion of complementar rural acce!! road! al!o !#o; $reater inclu!ion impact!0 In i!land countrie!" inter-i!land !#ippin$ 2t#e e<uivalent of rural road!3 i! al!o con!idered more inclu!ive0 Empirical evidence !u$$e!t! t#at infra!tructure #a! it! $reate!t inclu!ion impact! ;#en combined ;it# complementar inve!tment! and activitie!" includin$ t#o!e to !upport capacit buildin$" policie!" and in!titution!0 )a>imiGin$ t#e inclu!ivene!! of infra!tructure inve!tment!" t#erefore" re<uire! careful attention to pro8ect de!i$n and complementar inve!tment!" ba!ed on !ound !ector and countr dia$no!tic!0
%&' L %!ian &evelopment 'an60 Source!: %&'0 20120 Infra!tructure for Supportin$ Inclu!ive Gro;t# and 9overt Reduction in %!ia0 )anilaE %&'0 20100 %&'(! Contribution to Inclu!ive Gro;t# in *ran!port and Ener$ 9ro8ect!0 )anilaE and IE&0 Fort#comin$0 *#ematic Evaluation Stud : %&'(! Support for Inclu!ive Gro;t#0 )anila: %&'0

410 %cro!! t#e t#ree pillar!" %&' e!timate! t#at about D2I of re!ource! #ave !upported t#e $ro;t# pillar durin$ 200B=20120 )ean;#ile" !upport for pillar 2 2acce!! to opportunitie!3 t#rou$# !ector! t#at more directl promote !ocial inclu!ion remained limited" and declined in !ome ca!e!0 Support to education" #ealt#" and a$riculture no; eac# repre!ent onl 2I=@I of approval!" ;it# education 2a core operational area3 and #ealt# allocation! fallin$ !li$#tl over t#e 200@-200K to 200B-2012 period!0 Support to t#e finance !ector 2;#ic# include! !upport for financial inclu!ion3 declined from 1@I of approval! durin$ 200@=200K to BI durin$ 200B=20120

Support to !ocial protection repre!ented 8u!t 1I of loan approval!

420 Support to !ocial protection and !afet net! 2pillar @3 repre!ented 8u!t 1I of loan approval! over 200B=2012" ba!ed on %&' e!timate!0 %n evaluation of %&'(! implementation of t#e 2001 Social 9rotection Strate$ found !upport durin$ 20022011 limited 2e>cept in cri!i! period!3" ;it# !tand-alone !ocial protection pro8ect! ma6in$ up 8u!t 20CI of approval! over t#e decade02A %&' adopted t#e !trate$ in t#e
2A

IE&0 20120 Special Evaluation Stud : %&' Social 9rotection Strate$ 20010 )anila: %&'0 *#e evaluation cla!!ified intervention! a! !tand-alone if t#e #ad a clear" principal focu! on one or more of t#e five ma8or

Inclusi!e )ro$th
aftermat# of t#e %!ian Financial Cri!i!" ;#ic# e>po!ed ;ea6ne!!e! in !ocial protection pro$ram! acro!! %!ia0 4it# t#e !trate$ " %&' pled$ed to !tren$t#en !ocial protection pro$ram! durin$ non-cri!i! ear! to better prepare countrie! for future !#oc6!0 4#ile t#e evaluation found evidence of t#i! #appenin$ in !ome ca!e!" overall follo;-t#rou$# on t#i! commitment ;a! ;ea60 *#e recent round of cri!e! in 200B=2010 delivered a #ard le!!on" re-e>po!in$ ;ea6ne!!e! in !ocial protection ! !tem! and a$ain #i$#li$#tin$ t#e need for $reater %&' attention to t#i! area0 4@0 4#ile t#e overall compo!ition of t#e portfolio #a! remained lar$el unc#an$ed" t#e proportion of operation! cla!!ified b %&' a! tar$eted 2ver!u! $eneral3 povert intervention! #a! declined !teadil durin$ 200@=201@" ba!ed on IE& anal !i! of %&' pro8ect cla!!ification!0@0 *#e on$oin$ evaluation of inclu!ive $ro;t# find! t#at b amount" tar$eted intervention! compri!ed onl 21I of total operation! !upportin$ inclu!ive $ro;t# durin$ 2000=2012 2Fi$ure C30 From 2000 to 200@" t#e !#are of tar$eted intervention! in inclu!ive $ro;t# operation! ro!e !#arpl " pea6in$ in 200@ ;#en more t#an #alf of pro8ect! !upportin$ inclu!ive $ro;t# fell into t#i! cate$or 0 *#i! ;a! tri$$ered b t#e introduction of t#e 9overt Reduction Strate$ and it! 40I tar$et of lendin$ for povert intervention!0 *#e introduction of t#e En#anced 9overt Reduction Strate$ in 2004 appeared to rever!e t#i! trend" ;it# tar$eted intervention! declinin$ !#arpl to 2@I in 2004 and remainin$ lo; !ince t#en0 440 *#i! !tead decline in tar$eted intervention! i! cau!e for !ome concern" in t#at it !u$$e!t! a dimini!#in$ pro-poor focu! of inve!tment! over time0 *#u!" t#e povert focu! of t#e inclu!ive $ro;t# a$enda ma #ave fallen rat#er t#an increa!ed after adoption of Strate$ 20200 4#ile %&' i! not focu!ed on eradicatin$ e>treme povert " it can ma6e an effort to en!ure t#at t#o!e 8u!t belo; and above t#e povert line can capture t#e benefit! of it! intervention!0 %&'(! !tated focu! under Strate$ 2020 !#ifted from pro-poor $ro;t# to inclu!ive $ro;t#" but a crucial <ue!tion i! ;#et#er t#e !#ift ;a! to inclu!ive $ro;t#" or in practice to 8u!t $ro;t#0 Fi$ure C: 9ercenta$e of +peration! Supportin$ Inclu!ive Gro;t# Cla!!ified a! *ar$eted 9overt Intervention!" 2000= 2000=2012

15

*#e overall overall compo!ition of t#e portfolio #a! remained lar$el unc#an$ed

*#e povert povert focu! of t#e inclu!ive $ro;t# a$enda ma #ave fallen rat#er t#an increa!ed

51% 40% 30% 24% 23% 22% 19% 14% 9% 14% 23% 19% 16%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: Independent Evaluation &epartment0

@0

!ocial protection cate$orie!: !ocial a!!i!tanceE !ocial in!uranceE labor mar6etE c#ild protectionE and microJarea-ba!ed !c#eme!" focu!ed mo!tl on one of more area! of !ocial protection0 *ar$eted intervention!: 2i3 !upport povert reduction 2under t#e cate$or povert intervention! in t#e 9overt Reduction Strate$ 3" 2ii3 are located in area! ;it# #i$# concentration! of t#e poor" or 2iii3 !upport ac#ievement of t#e non-income )&G!0

16

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


4C0 *#e re!pon!e of t#e 9rivate Sector +peration! &epartment 29S+&3 to t#e inclu!ive $ro;t# a$enda can be !tren$t#ened" a! found in a recentl completed evaluation0@1 %&' can pa more ! !tematic attention to increa!in$ t#e inclu!ivene!! of 9S+" $iven evidence t#at !uc# a focu! need not undermine profitabilit 2!ee C#apter 4 for more detail!30 *#e !#are of 9S+& tran!action! t#at !ee6 to directl benefit t#e poor" rural population!" or ;omen #a! remained at 1@I of total approval! !ince approval of Strate$ 2020" de!pite $ro;t# in t#e non-!overei$n portfolio0 4D0 Fe; pro8ect! !ou$#t to increa!e acce!! to infra!tructure" #ealt#" and education !ervice! for poor or rural population!0 Compared ;it# !ome ot#er multilateral development ban6!" 9S+& #a! et to ma6e concerted effort! to promote inclu!ive bu!ine!!e!" i0e0" companie! and pro8ect! t#at offer $ood!" !ervice!" and liveli#ood! to income $roup! at t#e bottom of t#e p ramid 2includin$ t#e poor" t#e vulnerable" and lo;-income $roup!3 in ;a ! t#at can be e>panded in !cale0 )oreover" 9S+& #ad limited operation! in poor and economicall di!advanta$ed re$ion! of non-frontier mar6et! and countrie!0

*#e penetration of microfinance amon$ t#e poor remain! lo;

4K0 IE&(! 2012 microfinance evaluation found operation! le!! t#an effective in ac#ievin$ re!ult!0@2 Support concentrated on developin$ t#e polic environment and addre!!in$ !uppl !ide con!traint! to !ector $ro;t#" ;it# le!! focu! on demand-!ide i!!ue!" !uc# a! developin$ t#e capacit of t#e poor to acce!! and u!e financial !ervice!" in order to ma6e microfinance more inclu!ive and effective for t#e poor0 Support for pro-poor innovative product! and deliver model! ;a! limited" ;it# little attention to t#e !ocial performance of microfinance operation!0 %! a re!ult" t#e penetration of microfinance amon$ t#e poor remain! lo; 2para0 AA30 )ean;#ile" 9S+&(! dedicated microfinance operation! ;ere mo!tl effective in increa!in$ acce!! to finance for t#e poor" rural area!" and ;omen0

'0

Recommendation!

4B0 C#an$e! t#at #ave ta6en place durin$ 200A=201@" in combination ;it# t#e outloo6 for %!ia" !u$$e!t t#at a focu! on inclu!ion ;ill remain vitall important for t#e re$ion0 %! t#e re$ion(! premier development ban6" and in !ee6in$ to deliver better on t#e triple bottom line" %&' !#ould !upport t#i! a$enda ;it# increa!ed vi$or and effort0 Importantl " %&' could aim to increa!e inclu!ion acro!! it! !overei$n and non-!overei$n operation! in all !ector!0 % clear and monitored focu! need! to be $iven to includin$ t#e poor 2!a " t#e lo;er 40I of t#e income di!tribution3 in t#e re!ult! of operation!0 *#i! re<uire! %&' to !trive for a more balanced portfolio of infra!tructure and !ocial and environmental !ector pro8ect! to deliver inclu!ive outcome!" ;it# better balance acro!! t#e t#ree pillar!0 It al!o re<uire! more attention in pro8ect de!i$n0 %ll pro8ect!" re$ardle!! of t#eir !ector" can contribute 2more or le!!3 to inclu!ive $ro;t#0 *#i! re<uire! careful e> ante a!!e!!ment to determine #o; t#e pro8ect de!i$n can ma>imiGe povert and inclu!ivene!! impact!" a! ;ell a! identification of complementar intervention! to #elp ac#ieve t#e!e outcome!0 4A0 )oreover" inclu!ive $ro;t# i! a mean! for ac#ievin$ t#e overarc#in$ ob8ective of povert reduction0 Inclu!ive $ro;t# involve! all !e$ment! of t#e population" includin$ t#e poor0 % !#ift to inclu!ive $ro;t# al!o re<uire! a concern for ine<ualit "
@1

@2

IE&0 201@0 *#ematic Evaluation Stud : %&' 9rivate Sector +peration!: Contribution! to Inclu!ive and Environmentall Su!tainable Gro;t#0 )anila: %&'0 IE&0 20120 Special Evaluation Stud : )icrofinance &evelopment Strate$ 20000 Sector 9erformance and Client 4elfare0 )anila: %&'0

Inclusi!e )ro$th
and con!ideration of income and non-income dimen!ion! of povert 0 *o !tren$t#en %&'(! deliver on t#e inclu!ive $ro;t# a$enda" t#e on$oin$ evaluation ma6e! t#e follo;in$ recommendation!0 C00 % !imultaneou! focu! on povert and ine<ualit in %&'(! inclu!ive $ro;t# frame;or6 #a! become more nece!!ar $iven %!ia(! c#an$in$ !ocioeconomic land!cape0 Strate$ 2020 ;a! formulated amid optimi!m re$ardin$ t#e re$ion(! pro$re!! in reducin$ povert 0 7o;ever" $ain! 2in term! of rapid $ro;t# and povert reduction3 are no; at ri!6" a! a re!ult of t#e impact of t#e food and financial cri!e! t#at be$an in 200B" and ot#er !#oc6!0 )ore importantl " ine<ualit i! ri!in$ in man countrie!" increa!in$ t#e vulnerabilit of t#e poor and ot#er mar$inaliGed $roup!0 %&' !#ould tailor it! !upport to particular countr need!" but ri!in$ ine<ualit acro!! %!ia and t#e la$ in !ocial protection ! !tem development re<uire! an increa!e in %&' !upport for pillar! 2 and @0 C10 Con!traint! to and opportunitie! for inclu!ive $ro;t# var amon$ economie!0 Strate$ 2020(! B0:20 allocation of !upport for core and noncore operation! ma in !ome ca!e! undermine effort! to addre!! inclu!ive $ro;t#" becau!e of t#e ob!erved cro;din$-out effect0 Infra!tructure" ;#ic# ma6e! up t#e bul6 of t#e core area! of %&' operation!" can contribute to inclu!ive $ro;t#" but ot#er area! of operation! are more directl lin6ed to inclu!ive $ro;t# and t#e reduction of ine<ualit 0 %ccordin$l " %&' !#ould ba!e it! allocation of !upport for inclu!ive $ro;t# in !i$nificant part on !pecific countr conte>t!" in!tead of di!tributin$ !upport bet;een core and noncore area! accordin$ to a fi>ed formula0 C20 9ro8ect! $eared to promotin$ #i$# $ro;t# can contribute to inclu!ive $ro;t# if t#e are de!i$ned ;it# a clear ob8ective of directl benefitin$ lo;er-income $roup!0 For e>ample" infra!tructure pro8ect! t#at connect poor and better-off area!" or road! t#at connect rural area! to mar6et! and urban #ub! can promote inclu!ivene!!0 % !tron$er connection bet;een !trate$ic ob8ective! and pro8ect de!i$n and implementation in t#i! re!pect i! needed0 C@0 Countr team! need to pla a muc# bi$$er role in ! ner$iGin$ %&'(! countr pro$ram! ;it# $overnment pro$ram! and t#e pro$ram! of development partner!0 Selectivit in area! of operation!" ;#ile valuable in !ome re!pect!" ;ea6en! t#eir impact if t#e complementar pro$ram! not underta6en b %&' are al!o not !upported b ot#er!0 For e>ample" an %&'-!upported road pro8ect could promote inclu!ivene!! if it i! part of a plan t#at al!o addre!!e! !c#ool! and #ealt#care center! in t#e !ame area" and receive! !pecial !upport from t#e $overnment and ot#er development partner!0 Furt#er !tren$t#enin$ %&'(! capacit for developin$" facilitatin$" and monitorin$ ! ner$ie! ;it# complementar pro$ram! and pro8ect! of ot#er donor! i! imperative0 C40 *#ere i! a pre!!in$ need for %&' to improve t#e <ualit of inclu!ive $ro;t# anal !i! in C9S" a! t#i! ;ill $uide countr operation!0 %lt#ou$# t#e !taff $uideline! incorporate a !et of indicator! to monitor inclu!ive $ro;t#" t#e!e do not include tar$et! at t#e countr level0 Countr team! mu!t be encoura$ed to adopt countr -level tar$et! for inclu!ive $ro;t# indicator! to #elp improve outcome!0

17

Ri!in$ ine<ualit and t#e la$ in !ocial protection re<uire! an increa!e in !upport for pillar! 2 and @

18

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


Box 3: Inclusive Pillar 1 Projects Independent Evaluation Department evaluations and validations provide good examples of projects, focused primarily on infrastructure that had nota le inclusive impacts, specifically in terms of directly enefitting poor, vulnera le, and marginali!ed communities" #hese examples are diverse in terms of si!e, sector, and focus, ut they share at least t$o common features: %i& they $ere purposely designed $ith the o jective of improving the $elfare of certain poor and'or vulnera le groups( and %ii& they $ere generally $ell executed, including through colla oration $ith partners" #ransport infrastructure" #he Bangladesh )amuna Bridge Project provides a good example of a pillar 1 intervention that promoted inclusiveness" #he ridge connected the eastern and $estern halves of the country, improving the flo$ of goods and people and spurring economic gro$th" #he ridge rought access to the poorer $estern side of the country, integrating it into the larger economy, and generating ne$ economic opportunities for the poor" Energy infrastructure" #he *ao People+s Democratic ,epu lic -orthern .rea ,ural Po$er Distri ution Project achieved its electrification targets, improving access to and reducing the cost of asic electricity for poor households" #he project connected 3/,031 ne$ households in 231 northern area villages" #elecommunications infrastructure" 4everal .DB investments in .fghanistan, Bangladesh, and Papua -e$ 5uinea have demonstrated oth strong commercial via ility and social impacts y ma6ing mo ile communication more accessi le and afforda le for rural and lo$7income populations" Box 2 in 8hapter 9 provides details on the project in Bangladesh" ,ural community development" 4everal infrastructure7related projects that focus on rural community development stand out as highly inclusive, including the Indonesia ,ural Infrastructure 4upport Project" #he project improved access to asic infrastructure and services for some / million people in 1,091 villages" #he project improved road access to mar6ets, $ater supply and irrigation facilities, supply of asic goods, and access to education and pu lic services, $ith project activities generating /,311 person7 days of employment per village"
.DB : .sian Development Ban6, *ao PD, : *ao People+s Democratic ,epu lic" 4ources: IED" /111" ;alidation ,eport: 8ommunity7Based Early 8hildhood Development Project in <yrgy! ,epu lic" =anila: .DB( IED" /11/" ;alidation ,eport: ,ural Infrastructure 4upport Project in Indonesia" =anila: .DB( IED" /11/" ;alidation ,eport: -orthern .rea ,ural Po$er Distri ution Project in *ao People+s Democratic ,epu lic" =anila: .DB"

C7%9*ER C7%9*ER @

Environmentall Su!tainable Gro;t#


CC0 %!ia #a! ;itne!!ed e>ceptional economic $ro;t#" but 6e environmental condition! #ave deteriorated0 Climate c#an$e #a! become an immediate t#reat for t#e re$ion0 7i!torical data indicate t#at ne$ative environmental e>ternalitie! a!!ociated ;it# earlier !ta$e! of 2rapid3 economic $ro;t# tend to be !moot#ed out in t#e lon$ term" a! !u$$e!ted b t#e 5uGnet! curve 2Fi$ure D30 /nfortunatel " t#e 5uGnet! relation!#ip provide! little #ope t#at" in t#e ab!ence of deliberate action!" t#e!e ne$ative trend! ;ill be rever!ed before t#e re$ion confront! unfor$ivin$ environmental con!traint!0 For %!ia and t#e 9acific re$ion" t#i! !ituation ma6e! a polic re!pon!e t#at prioritiGe! $ro;t# ;#ile dela in$ con!ideration of miti$atin$ environmental e>ternalitie! perilou!0 @@ Fi$ure D: *#e 5uGnet! Curve for C+2 Emi!!ion!" 200A
Log (CO2 Emissions, k per !o""ar o# $%P in PPP terms)

Environmental condition! #ave deteriorated

1.50 1.25 1.00 0.75 0.50 0.25 0.00 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Log (Per capita income in $)

C+2 L carbon dio>ide" G&9 L $ro!! dome!tic product" 6$ L 6ilo$ram" 999 L purc#a!in$ po;er parit 0 Note: diamond! L %!ian countrie!" !<uare! L ot#er countrie!0 *#e central curve i! a <uadratic function of t#e lo$ of C+2 emi!!ion! 26$ per dollar of G&9 in 999 term!3" plotted alon$ t#e #oriGontal a>i!0 *#e ot#er t;o curve! !#o; QJ= one !tandard error0 Source: %&'0 201@0 &evelopment Imperative! for t#e %!ian Centur 0 %&' Economic! 4or6in$ 9aper Serie!" No0 @D00 )anilaE and calculation! ba!ed on 4orld 'an6 data0

@@

*#e Environmentall Su!tainable Gro;t# a$enda cover! t#e miti$ation of ne$ative environmental e>ternalitie!" climate c#an$e miti$ation and adaptation" and di!a!ter ri!6 mana$ement0

20

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter

Inve!tin$ in !u!tainable $ro;t# and adaptin$ to climate c#an$e mu!t be vie;ed a! benefit! to $ro;t#

CD0 In recent ear!" countrie! in %!ia and t#e 9acific #ave !#o;n t#e #i$#e!t vulnerabilit ;orld;ide to climate-related di!a!ter!E # dro-meteorolo$ical di!a!ter! in %!ia and t#e 9acific <uadrupled over t#e la!t 4 decade! 2Fi$ure K30 %&' e!timate! t#at t#e economic co!t for Sout#ea!t %!ia of not miti$atin$ and adaptin$ to climate c#an$e could be e<uivalent to a lo!! of D0KI of $ro!! dome!tic product per ear b 2100H t;ice t#e ;orld avera$e0@4 Climate c#an$e i!" indeed" a $ame c#an$er" and addre!!in$ t#e cau!e! and mana$in$ t#e ri!6! a!!ociated ;it# climate c#an$e are central to !u!tained economic $ro;t#0 Inve!tin$ in !u!tainable $ro;t# and miti$atin$ and adaptin$ to climate c#an$e mu!t be vie;ed a! benefit! of or contributor! to $ro;t#" rat#er t#an a! co!t! of" or detractor! from $ro;t#0 Fi$ure K: Ri!e in 7 drodro-)eteorolo$ical )eteorolo$ical &i!a!ter!
250 200
Number of Event!

Hy rolo!"#$l %l"&$tolo!"#$l Meteorolo!"#$l '"olo!"#$l (eo)hys"#$l

150 100 50 0

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Source:

Fre<uencie! are aut#or!( e!timate! ba!ed on data from t#e Emer$enc Event &ataba!e of t#e Centre for Re!earc# on t#e Epidemiolo$ of &i!a!ter! 2ver!ion 1200K30 #ttp:JJ;;;0emdat0be 2acce!!ed 2 Nanuar 201430

CK0 *#e #eav burden of environmental de!truction in %!ia and t#e 9acific i! under!tood and even appreciated to a con!iderable e>tent0 Nevert#ele!!" 8u!t a! in man ot#er part! of t#e ;orld" t#ere i! little action0 *#e mo!t li6el rea!on ma be $overnance" ;#ic# i! a 6e driver of c#an$e in boo!tin$ environmental performance 2Fi$ure B30 )an $overnment! acro!! %!ia and t#e 9acific #ave e!tabli!#ed polic " le$al" and in!titutional frame;or6! to promote !u!tainable development0 )o!t countrie! are partie! to ma8or multilateral environmental a$reement!0 7o;ever" a! noted in t#e recentl i!!ued environment operational direction!"@C even in ca!e! ;#ere polic frame;or6! are ade<uate" actual reform! and implementation often do not materialiGe a! a re!ult of limited in!titutional capacit " lac6 of tec#nical e>perti!e" in!ufficient fundin$" and fra$mented in!titutional arran$ement!" in addition to ve!ted intere!t! and t#e lac6 of true motivation to act0

@4 @C

%&'0 200A0 *#e Economic! of Climate C#an$e in Sout#ea!t %!ia: % Re$ional Revie;0 )anila0 %&'0 201@0 Environment +perational &irection! 201@=2020: 9romotin$ *ran!ition! to Green Gro;t# in %!ia and t#e 9acific0 )anila0

2011

&n!iron entally Sustaina*le )ro$th


Fi$ure B: Government Effectivene!! ver!u! Environmental 9erformance

21

Note:

Source:

Environmental performance i! mea!ured b t#e environmental performance inde>0 *#e Environmental 9erformance Inde> 2E9I3 ran6! #o; ;ell countrie! perform on #i$#-priorit environmental i!!ue! in t;o broad polic area!: protection of #uman #ealt# from environmental #arm and protection of eco! !tem!0 Government effectivene!! i! an indicator of t#e capacit of $overnment! to effectivel formulate and implement !ound policie!0 4orld 'an60 20100 4orld &evelopment Report 20100 4a!#in$ton" &C0

%0

%&'(! Re!pon!e

CB0 Strate$ 2020" in it! ;ritten pre!entation!" reco$niGe! t#at environmental de$radation and t#e di!a!trou! effect! of climate c#an$e are 6e c#allen$e! for t#e re$ion0 /nle!! approac#e! to economic $ro;t# are altered to addre!! t#e de!truction of natural re!ource! and pollution" t#e re$ion(! pro!pect! for !tron$ and !u!tained $ro;t# are in 8eopard 0 Strate$ 2020 al!o !tate! t#at onl environmentall !u!tainable $ro;t# can effectivel contribute to povert reduction" becau!e man of t#e poor depend on natural re!ource! for t#eir liveli#ood0 4#at i! crucial" #o;ever" i! #o; %&'(! !tated commitment to environmentall !u!tainable $ro;t# i! tran!lated into operation!0 CA0 Evaluation! refer to t#ree area! ;#ere t#e commitment can be a!!e!!ed in term! of action! 2if not impact3: 2i3 !upport for climate c#an$e miti$ation and adaptationE 2ii3 reducin$ t#e carbon footprint of %!ia(! citie!E and 2iii3 !tren$t#enin$ environmental re$ulation and mana$ement" includin$ t#rou$# 6no;led$e tran!fer0 &i!cernible pro$re!! #a! been made in term! of increa!in$ operational focu! in t#e!e area!0 D00 % revie; underta6en for t#i! report e>amined !elected C9S approved durin$ 2001=2011E it reveal! an increa!in$ emp#a!i! on addre!!in$ environmental concern!0@D %t t#e countr level" t#e focu! reflect! var in$ countr need! or condition! 2e0$0" coa!tal Gone mana$ement" fi!#erie!" urban air <ualit " and urban tran!port30 From 200C on;ard!" t#ere #a! been an increa!ed attention to rene;able ener$ !ource!" ener$ con!ervation" and ener$ efficienc " a! !#o;n b an increa!e in pro8ect! ta$$ed for environmental !u!tainabilit in t#e Re!ult! Frame;or60@K %! illu!trated in Fi$ure A"

@D @K

*#e 9RC" India" Nepal" t#e 9acific re$ion" 9a6i!tan" and 1iet Nam %&'0 201@0 &evelopment Effectivene!! Revie; 2012 Report0 )anila0

22

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


t#e number of pro8ect! ;it# environmental !u!tainabilit a! a t#eme tripled durin$ 200@=20120 *#e di!tribution acro!! !ector! #a! al!o become more balanced0 Fi$ure A: Number of :oan! %pproved ;it# an Environment *#eme b Fear and Sector 2200@=20123 50 45 40 35 30 25 20 15 10 5 0 2003 2004 ANR 2005 2006 ,-N 2007 HS. 2008 -AT 2009 M+/ 2010 .SM 2011 TA2012 WMS

E*+

ENE

%NR L a$riculture and natural re!ource!" E&/ L education" ENE L ener$ " EN1 L environment" FIN L finance" 7S9 L #ealt# and !ocial protection" I%* L indu!tr and trade" )/: L multi!ector" 9S) L public !ector mana$ement" *%I L tran!port and information and communication tec#nolo$ " 4)S L 4ater Suppl " and +t#er )unicipal Infra!tructure Service!0 Source: Independent Evaluation &epartment0

D10 %&' !upported 2@4 climate c#an$e inve!tment pro8ect! durin$ 200A=20120@B )ore t#an B0I of %&'(! climate c#an$e miti$ation effort! are focu!ed on clean ener$ E !upport to miti$ation in a$riculture" fore!tr " and land-u!e !ector! #a! been limited0 *#e Ener$ Efficienc Initiative" launc#ed in 200C" !et a tar$et of increa!in$ %&' !upport to clean ener$ pro8ect! to -1 billion per ear durin$ 200B=20120 *#i! tar$et ;a! ac#ieved and !ub!e<uentl rai!ed to -2 billion for 201@E t#i! tar$et #a! al!o been ac#ieved0 &e!pite t#e difficultie! in trac6in$ t#e climate c#an$e portfolio" a !i$nificant part i! no; !een to !upport climate c#an$e miti$ation or adaptation0 D20 *;o crucial i!!ue! emer$e" #o;ever: 2i3 ;#et#er t#e attentionHeven ta6in$ into account t#e increa!e in pro8ect! t#at !upport environmental !u!tainabilit Hi! commen!urate ;it# t#e need and ;#at i! called for in Strate$ 2020E and 2ii3 ;#et#er pro8ect re!ult! are ade<uate" or !impl label pro8ect! a! !upportive of environmental !u!tainabilit 0@A % 2011 evaluation !u$$e!ted t#at furt#er pro$re!! could be made b providin$ in!i$#t! from ener$ efficienc improvement! in ma8or ener$ -u!in$ !ector!" !uc# a! indu!tr and buildin$!" and t#rou$# en#anced a;arene!! ;it#in %&' of innovative modalitie! 2e0$0" ener$ !ervice companie! and $uarantee fund!3040 *#e evaluation of %&' !upport for t#e )&G! pointed out t#at ;#ile %&' #a! increa!in$l !upported )&GK" action remained minimal in compari!on ;it# t#e !iGe of t#e problem" and follo; up ;a! limited 2footnote 1@30
@B

IE&0 Fort#comin$0 *#ematic Evaluation Stud : %&' Support for Climate C#an$e %daptation and )iti$ation0 )anila: %&'0 @A %!!e!!ment of t#i! i!!ue i! #ampered b ;ea6ne!!e! in t#e ! !tematic monitorin$ on environmental !u!tainabilit " and t#e re!ultin$ lac6 of data0 40 IE&0 20110 Revie; of Ener$ Efficienc Intervention!0 )anila: %&'0

&n!iron entally Sustaina*le )ro$th


D@0 For e>ample" ;#ile %&' #a! !#arpl increa!ed effort! to reduce carbon dio>ide 2C+23 emi!!ion! t#rou$# cleaner" more efficient ener$ operation!" C+2 emi!!ion! in %!ia continue to ri!e" and pro$re!! in meetin$ t#e tar$et relatin$ to C+2 emi!!ion! la$! be#ind t#at for an ot#er )&G tar$et0 Ea!t %!ia alone account! for @0I of $lobal ener$ -related C+2 emi!!ion!0 % 200A evaluation !#o;ed %&' #o; to monitor and eventuall reduce t#e $reen#ou!e $a! emi!!ion inten!it of it! ener$ operation! b preparin$ a con!i!tent frame;or6 to identif pro8ect! ;it# !i$nificant $reen#ou!e $a! impact! or !avin$!041 %&' #a! al!o $iven attention to clean ;ater production and di!tribution" but a! of 2011" 1K countrie! #ave not met t#eir !afe ;ater tar$et!E in A countrie! more t#an a t#ird of t#e rural population #a! no acce!! to !afe ;aterE ;#ile in 1K countrie! 2includin$ t#e 9RC" India" and Indone!ia3 more t#an a t#ird of t#e population #a! no acce!! to improved !anitation042 D40 *#ere i! a need bot# for $reater effort" and for obtainin$ re!ult! from t#e focu! on !u!tainabilit 0 %&' 2and ot#er or$aniGation!3 #ave ;ea6 record! in trac6in$ re!ult! on t#e environment" and evaluation i! #andicapped in a!!e!!in$ t#e de$ree to ;#ic# re!ult! accrue from increa!ed effort" inade<uate t#ou$# it ma be0 9ro8ect evaluation! !u$$e!t area! t#at can be !in$led out" and t#at could contribute to better re!ult!0 DC0 Fir!t" it mu!t be reco$niGed t#at t#e environment i! a cro!!-cuttin$ t#eme" and t#at environmentall !u!tainable $ro;t# re<uire! t#at attention be $iven to operation! in variou! !ector!" and b variou! actor!0 Environmental !u!tainabilit #a! been inte$ral to %&' operation! be$innin$ in t#e earl 1AK0!0 Four !ector! !tand out in t#e conte>t of )&GK" bot# in term! of t#e number of pro8ect! and volume of approval: 2i3 ;ater and ot#er municipal infra!tructure !ervice!" 2ii3 a$riculture and natural re!ource!" 2iii3 ener$ " and 2iv3 multi!ector operation!0 Evaluation! point to t#e need for !tron$er lin6a$e! amon$ t#e!e area! in term! of identif in$ opportunitie! for obtainin$ environmental re!ult!0 'enefit! ;ill be realiGed t#rou$# far $reater collaboration acro!! t#e!e area!" and inte$ration of t#eir e>pected impact! ;it#in C9S0 DD0 Second" crucial $ap! mu!t be addre!!ed0 Ener$ operation! #ave been increa!in$l directed to;ard! ener$ efficienc and clean ener$ " and a !imilar tran!ition i! re<uired in tran!port" ;it# far more emp#a!i! on climate proofin$" urban tran!port inve!tment" and rail;a !0 *#e *ran!port Emi!!ion! Evaluation )odel for 9ro8ect! ;a! developed a! part of a 2010 evaluation04@ *#e model mea!ure! carbon emi!!ion! durin$ pro8ect con!truction and implementation !ta$e!0 4#ile !everal ot#er financial in!titution! #ave be$un u!in$ t#e model" %&' #a! et to full embrace it0 'o> 4 #i$#li$#t! a !u!tainable tran!port model t#at miti$ate! a$ain!t climate c#an$e b providin$ a #i$#-<ualit public !ervice alternative to private motoriGation0

23

Ener$ operation! #ave been directed to;ard! ener$ efficienc and clean ener$ " and a !imilar tran!ition i! re<uired in tran!port

41

IE&0 200A0 Evaluation 5no;led$e 'rief on Green#ou!e Ga! Implication! of %&'(! Ener$ Sector +peration!0 )anila: %&'0 42 %&'0 201@0 %&' 5e Indicator! 201@0 )anila0 4@ IE&0 20100 Evaluation 5no;led$e 'rief on Reducin$ Carbon Emi!!ion! from *ran!port 9ro8ect!0 )anila: %&'0

24

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


'o> 4: Su!tainable *ran!port %&'(! Su!tainable *ran!port Initiative" ;it# an operational plan approved in 2010 2%ppendi> 23" reco$niGe! t#e importance of maintenance a! part of developin$ a tran!port ! !tem t#at i! acce!!ible" !afe" environment-friendl " and affordable0 4#ile preparin$ a !#ift to;ard rail and urban tran!port" t#e initiative intend! to provide more !upport for a!!et mana$ement and road maintenance t#rou$# pro$ram! t#at #elp improve t#e ! !tem! for !electin$" implementin$" and financin$ road maintenance0 *#e plan need! dili$ent implementation acro!! operation! department!" ;it# polic dialo$ue on t#e increa!in$ co!t of road! in vie; of climate c#an$e0 %n effective and efficient public tran!port ! !tem i! t#e corner!tone of creatin$ a viable alternative to increa!in$ private motoriGation0 'R* repre!ent! a ne; ma!! tran!it option t#at provide! #i$#-level !ervice at a fraction of t#e co!t of ot#er traditional option!0 'R* i! provin$ to be a mean! for citie! to 8oin t#e ran6! of <ualit public tran!port0 In 201@" t#e %&'-financed 'R* ! !tem in :anG#ou 29RC3 ;a! inau$urated ;it# pa!!en$er !ervice!0a *#e ! !tem repre!ent! a mile!tone for %&'" a! it! fir!t operational urban public tran!port ! !tem t#at featured application of t#e Clean &evelopment )ec#ani!m0 *#e initial inve!tment !upported a 120C 6ilometer 'R* corridor ;it# 1A !tation!0 % complementar inve!tment in bic cle lane! furt#er en#anced acce!!ibilit and enabled an inte$rated approac#0 *#e ! !tem #a! al!o !upported inte$ration ;it# land u!e and urban development" a! t#e corridor connect! :anG#ou to t#e communit of %nnin$" ;#ic# i! bein$ developed a! a !econd cit center0 %lread commercial development" bot# alon$ and underneat# t#e !tation!" #a! been catal Ged b t#e pro8ect0 :anG#ou(! !ucce!! i! no; bein$ replicated el!e;#ere ;it# ne; 'R* ! !tem! bein$ financed b %&' in &avao 29#ilippine!3" &#a6a 2'an$lade!#3" 7ubei Fic#an$ 29RC3" Nian$>i FuG#ou 29RC3" Nian$>i Ni(an 29RC3" and /laanbaatar 2)on$olia30
%&' L %!ian &evelopment 'an6" 'R* L bu! rapid tran!it" 9RC L 9eople(! Republic of C#ina0 Note: a Ca!e !tud provided b t#e *ran!port Communit of 9ractice0 Source!: Independent Evaluation &epartment0 201@0 %nnual Evaluation Report 201@0 )anila: %&'E and input! from t#e *ran!port Communit of 9ractice0

DK0 +f t#e !even )&G tar$et!" t#e bi$$e!t c#allen$e! to %&' and t#e re$ion are related to C+2 emi!!ion! reduction!" acce!! to improved !anitation" and fore!t cover0 +nl C1I of %&'(! pro$rammed !anitation output! for 200A=2012 ;ere e>pected to be delivered b t#e end of 2012" t#e lo;e!t amon$ :evel 2 tar$eted output! included in %&'(! re!ult! frame;or60 %l!o" %&' lar$el ;it#dre; from operatin$ in fore!tr in t#e earl 2000!0 Rene;ed countr intere!t in t#e !ector" re!ultin$ from climate c#an$e amon$ ot#er t#in$!" i! a reminder of it! crucial importance for t#e re$ion and %&'0

Support for climate c#an$e adaptation remain! mode!t

DB0 Furt#ermore" an on$oin$ evaluation 2footnote @B3 find! t#at !upport for climate c#an$e adaptation" ;#ic# be$an in 200A" remain! mode!tHe!timated at about -KD4 million in 2011" and -BAC million in 20120 In line ;it# %&'(! overall inve!tment portfolio 2K2I of ;#ic# i! for infra!tructure component!3" climate c#an$e adaptation intervention! are concentrated in climate proofin$ of infra!tructure pro8ect!0 +f t#e 100 approved inve!tment pro8ect! t#at ;ere cla!!ified a! climate c#an$e adaptation pro8ect! durin$ 200A=2012" at lea!t 4A included !ome infra!tructure climate proofin$ mea!ure!" and in B1 t#e ma8orit of t#e inve!tment ;a! for infra!tructure0 *#i! i! in line

&n!iron entally Sustaina*le )ro$th


;it# a previou! IE& findin$ of an unmi!ta6able !#ift to;ard! infra!tructure" ;it# over B0I of total pro8ect financin$ $oin$ to ener$ 044 %t lea!t C4 of t#e 100 inve!tment pro8ect! mentioned above included !ome form of non-infra!tructure climate re!iliencebuildin$ mea!ure!0 Climate re!ilience-buildin$ i! addre!!ed t#rou$# one or more of mea!ure! t#at: 2i3 2ii3 2iii3 2iv3 addre!! driver! of vulnerabilit 2B pro8ect!3E increa!e re!ilience to climate e>treme! 2flood!" drou$#t!" !torm !ur$e!3 and ero!ion 212 pro8ect!3E !tren$t#en a$ricultural !upport !ervice! 2C pro8ect!3E and" !upport capacit development 22C pro8ect!30

25

DA0 Five pro8ect! al!o included a re!pon!e to dama$e from natural #aGard! t#rou$# re#abilitation of infra!tructure to reconnect to mar6et! and re-e!tabli!# ;ater !upplie!0 K00 *#e recent deva!tatin$ natural di!a!ter! in t#e 9RC" India" 9a6i!tan" t#e 9#ilippine!" *#ailand" and el!e;#ere under!core t#e ur$ent need for %&' to #elp build di!a!ter ri!6 mana$ement 2&R)3 capacit 0 %&' #a! a record in t#i! area" and it! di!a!ter recover pro8ect! #ave often been more !ucce!!ful t#an pro8ect! overall0 'ut man di!a!ter recover pro8ect! to date ;ere mainl concerned ;it# t#e limited ob8ective of re!torin$ particular t pe! of infra!tructure in t#e affected area!" rat#er t#an re#abilitatin$ liveli#ood!" or increa!in$ di!a!ter re!ilience b buildin$-bac6-better04C *#e needed !#ift in focu! to prevention and preparedne!! ;ill #ave increa!in$ appeal to countrie! in vie; of t#e fre<uenc of t#e di!a!ter! t#e #ave faced0 K10 % recent evaluation of %&'(! re!pon!e to natural di!a!ter! found t#at" ;it# t#e e>ception of 'an$lade!#" Nepal and t#e 9acific countrie!" mo!t countr pro$ram! #ave not treated t#e $ro;in$ fre<uenc of natural di!a!ter! a! a ! !temic ri!6 to !u!tained economic $ro;t#" and do not ! !tematicall include di!a!ter ri!6 reduction mea!ure!04D %&' i! more reactive t#an pro-active in focu!in$ on creatin$ a;arene!! t#rou$# polic dialo$ue ;it# countr client! and tec#nical advi!or !ervice!0 K20 Independent evaluation" t#erefore" !tre!!ed t#e: 2i3 preparation of a natural di!a!ter vulnerabilit a!!e!!ment for vulnerable countrie!" 2ii3 adoption of an inte$rated approac# to &R)" be ond infra!tructure re#abilitation" 2iii3 !tren$t#enin$ of partner!#ip! ;it# ot#er development partner! in t#i! area" 2iv3 inte$ration of climate c#an$e and natural di!a!ter activitie!" and 2v3 furt#er development of ri!6 finance in!urance option! for t#e re$ion0 Follo;-up on t#e!e recommendation! i! be$innin$" includin$ t#rou$# t#e revi!ed draft &R) %ction 9lan0 K@0 *#e Climate C#an$e Fund" financed from %&'(! internal re!ource! and mana$ed b %&'" levera$ed no e>ternal financin$0 *#e Clean Ener$ Financin$ 9artner!#ip Facilit and t#e Climate C#an$e Fund enabled a lar$e number of applicant! to avail of t#e!e fund!" but provided little e>perience to %&' !taff in !ee6in$ climate financin$ from e>ternall mana$ed climate fund!04K

)o!t countr pro$ram! #ave not treated natural di!a!ter! a! a ! !temic ri!6 to !u!tained $ro;t#

44 4C

4D 4K

IE&0 20120 %nnual Evaluation Revie;0 )anila: %&'0 Notable e>ception! include t#e po!t-t!unami !upport in %ce#" Indone!ia" and t#e po!t-eart#<ua6e !upport in Gu8arat" India 2bot# financed b t#e Napane!e Fund for 9overt Reduction30 IE&0 20120 Special Evaluation Stud : %&'(! Re!pon!e to Natural &i!a!ter! and &i!a!ter Ri!60 )anila: %&'0 *#e Climate C#an$e Fund i! reported to #ave levera$ed: 2i3 nearl B time! t#e fund! it allocated for carbon emi!!ion !avin$!" 2ii3 4A time! t#e fund! it allocated for reduced emi!!ion! from defore!tation and fore!t de$radation 2RE&&Q3 and land u!e" and 2iii3 over A0 time! t#e amount it allocated for climate c#an$e

26

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter

'0

Recommendation!

*#e ur$enc of !u!tainable $ro;t# i! #ei$#tened b environmental de$radation and climateclimate-related di!a!ter!

K40 *#e ur$enc of environmentall !u!tainable $ro;t# i! #ei$#tened b environmental de$radation and t#e fre<uenc of climate-related di!a!ter!" ;#ic# #ave ;or!ened !ince t#e adoption of Strate$ 20200 +verall" t#e problem! far outpace t#e re!pon!e from t#e re$ion and %&'0 *#ere #a! been an appropriate increa!e in climate inve!tment! in t#e %&' ener$ portfolio" but a !imilar increa!e #a! not ta6en place in t#e tran!port portfolio0 *#e recent evaluation of %&'(! !upport for t#e )&G!H particularl )&GKH!#o;ed muc# room for furt#er action0 KC0 9ur!uin$ environmentall !u!tainable $ro;t# repre!ent! a benefit to $ro;t#" rat#er t#an a co!t to development0 *#i! imperative mu!t be muc# better inte$rated into %&' operation!0 %! a re$ional public in!titution" %&' #a! a 6e re!pon!ibilit to contribute to a cleaner development pat#" and in doin$ !o" can contribute !i$nificant added value0 *#e rene;ed !tre!! on inclu!ive $ro;t# and t#e imperative of en!urin$ environmental !u!tainabilit i! be!t met b %&' adoption of a triple bottom line" ;#ic# ;ill #elp ali$n %&'(! commitment to t#e po!t-201C development a$enda and emer$in$ !u!tainable development $oal!0 KD0 Given t#e in!titution(! focu! on infra!tructure and t#e re$ion(! e>treme vulnerabilit to climate di!a!ter!" %&' mu!t ma6e a far-reac#in$ operational contribution to promotion of environmental !u!tainabilit " and climate c#an$e adaptation and miti$ation" in part b tappin$ t#e va!t climate fund!0 Specificall " ;e fla$ t#e follo;in$ area! for action0 KK0 Implementin$ a triple bottom line re<uire! !tron$ environmental $overnance" ;#ic# i! lac6in$ in man countrie!E %&' !upport for environmental $overnance i! vital" and in 6eepin$ ;it# it! overall commitment to !upportin$ !tren$t#ened $overnance in t#e re$ion0 In providin$ !uc# !upport %&' !#ould reco$niGe: 2i3 t#e need to !ee6 and e>ploit opportunitie! for incremental pro$re!!E 2ii3 t#at !ector $overnance en#ancement i! a continuin$" lon$-term proce!!E and 2iii3 t#e need for a !olid under!tandin$ of t#e local $overnance conte>t a! t#e ba!i! for !upport0 KB0 Climate c#an$e miti$ation and adaptation are an e!!ential part of t#e paradi$m !#ift to a triple bottom line polic re!pon!e0 %ddre!!in$ environmental de$radation and di!a!ter! can reduce t#e impact of !#oc6!0 %n on$oin$ evaluation 2footnote @B3 indicate! t#at %&' i! ;ell-po!itioned to increa!e it! role a! a 6no;led$e bro6er on climate c#an$e0 Critical i!!ue! ;#ere !tate of t#e art 6no;led$e i! re<uired include carbon !e<ue!tration" tradeoff! and lin6a$e! bet;een climate c#an$e miti$ation and adaptationE overlap! and connection! bet;een adaptation and &R)E !u!tainable food" ener$ and ;ater !ecurit E and urban development0 *#ere al!o need! to be far $reater motivation to levera$e non-%&' fund! to finance climate c#an$e need!0 KA0 *#e evaluation of %&'(! re!pon!e to natural di!a!ter! and di!a!ter ri!6 concluded t#at natural di!a!ter! are in part a con!e<uence of increa!ed population" povert " and climate c#an$e" and t#at !upport for natural di!a!ter mana$ement i!
adaptation0 *#e!e fi$ure!" #o;ever" refer to %&'(! normal !ource! of financin$ *% and inve!tment pro8ect! onl 2i0e0" ordinar capital re!ource!" %!ian &evelopment Fund" ot#er *% re!ource!" and ot#er %&'admini!tered climate fund!30 *#e Climate C#an$e Fund ;a! not u!ed to levera$e an e>ternall mana$ed climate fund!0

%&' mu!t ma6e a farfar-reac#in$ contribution to environmental !u!tainabilit and climate c#an$e miti$ation and adaptation

&n!iron entally Sustaina*le )ro$th


in!ufficient and need! to be increa!ed0 *#e on$oin$ !tud on climate c#an$e-related operation! i! !tren$t#enin$ t#i! conclu!ion ;it# re!pect to climate c#an$e adaptationH$oin$ be ond ener$ efficienc $ain! and rene;able ener$ !ource! to include $overnance" re$ulator c#an$e!" and communit development0 &i!a!ter ri!6 prevention and mana$ement need to be e!peciall increa!ed in fra$ile !ituation!0 B00 *#e draft inte$rated &R) operational plan 2%ppendi> 23 !till contemplate! treatin$ di!a!ter ri!6 reduction t#rou$# variou! ot#er t#ematic operation plan! 2!uc# a! $ender" ;ater" urban" and 999!30 It i! important to e!tabli!# di!a!ter ri!6 reduction a! a main!tream t#eme0 4#ile ri!6 a!!e!!ment! var accordin$ to t#e t pe of di!a!ter and t#e a$enc preparin$ t#e a!!e!!ment" %&'Ha! t#e premier re$ional development financin$ in!titutionH!#ould !erve a! a conduit for re$ional !6ill!" 6no;led$e" and e>pert! and brin$ to$et#er countrie! to act on di!a!ter ri!6 miti$ation0 %&' need! to e!tabli!# a more permanent in!titutional !etup 2e0$0" communit of practice" or a formal net;or6 of di!a!ter ri!6 reduction e>pert!30 B10 Finall " a! !i$naled in t#e recentl approved Environment +perational &irection!" t#e re$ion ;ould benefit if %&' increa!e! it! pre!ence in fore!tr " particularl in t#e area of !u!tainable fore!tr mana$ement 2footnote 1030 *#e defore!tation c#allen$e involve! re$ional and $lobal public $ood!" and %&' i! ;ell po!itioned to ta6e a leadin$ role in t#i! area" particularl in pre!entin$ evidence" and en$a$in$ in 6no;led$e-ba!ed advocac and a;arene!! buildin$0

27

It i! important to e!tabli!# di!a!ter ri!6 reduction a! a main!tream t#eme

CHAPTER 4

Private Sector Development


AD# pledged to "elp co(ntrie! attract inve!tment! t"at !(pport incl(!ive gro%t" and improve t"e environment
82. Strategy 2020 identified PSD and PS a! it! fir!t driver of c"ange.48 T"e !trategy commit! AD# to e$panding it! %or& %it" t"e private !ector to generate greater economic gro%t"' to a!!(ming greater)*(t t"oro(g"ly a!!e!!ed)ri!&!' and acting a! a cataly!t for inve!tment! t"at t"e private !ector mig"t not ot"er%i!e ma&e. +oreover' it pledge! t"at AD# %ill, -i. do more to "elp co(ntrie! attract direct private !ector inve!tment! t"at !(pport incl(!ive gro%t" and improve t"e environment' -ii. inve!t in infra!tr(ct(re' and -iii. advi!e government! on t"e *a!ic! of a *(!ine!!/friendly environment to !p(r mar&et/led gro%t". 80. Strategy 2020 call! for e$panding PSD and PS ' to reac" 102 of ann(al operation! *y 2020. 3ey ta!&! to accompli!" t"i! incl(de, -i. adapting AD#4! organi5ational !tr(ct(re' -ii. adding ne% or !(*!tantially en"ancing permanent !taff !&ill!' and -iii. optimi5ing t"e deployment of re!o(rce! to !(pport PSD t"ro(g" AD#4! vario(! regional department! and t"e PS D. Tool! to cataly5e c"ange and greater private inve!tment in co(ntrie! incl(de direct financing' credit en"ancement!' ri!& mitigation g(arantee!' and innovative ne% financial in!tr(ment!. +oreover' AD# i! to promote PPP! in all core operational area!' gaining e$perience fir!t in +6C!' and t"en e$panding to all co(ntrie!.

A.

AD#4! Re!pon!e

Staff re!o(rce! for PSD and PS almo!t do(*led

84. Significant progre!! "a! *een made in aligning PSD and PS %it" Strategy 2020 !ince 2008. Staff re!o(rce! for PSD and PS almo!t do(*led d(ring 207082072' and a fift" vice/pre!idency %a! created to !(pport PS and cofinancing operation! in 2070. T"e !"are of PSD/t"emed operation! gre% from an average of 292 d(ring 20008 200: to 082 d(ring 200882072. +o!t of t"i! gro%t" "a! re!(lted from increa!e! in PS and PPP/related !(pport' %"ile t"ere %a! little c"ange in ena*ling environment !(pport. 81. Amo(nt! approved for non/!overeign operation! -incl(ding PS and lending to p(*lic agencie! %it"o(t government g(arantee!. accelerated to an average of ;2 *illion d(ring 200882072 from ;::: million d(ring 20008200:' *(t t"i! !tand! at an average of 712 of overall approved amo(nt!. AD# pro<ect! "ave *een !(cce!!f(l in cataly5ing private financing' mainly t"ro(g" AD#4! direct financial !(pport= t"e (!e of ne% financial in!tr(ment! or g(arantee! "a! increa!ed in nominal term!' *(t not a! a !"are of total AD# !(pport. At t"e end of 2072' infra!tr(ct(re PS of ;4 *illion
48

T"i! !ection dra%! mo!tly on t"e follo%ing t%o eval(ation!, -i. 6ED. 2070. T"ematic Eval(ation St(dy, AD# Private Sector peration!, Contri*(tion! to 6ncl(!ive and Environmentally S(!taina*le >ro%t". +anila, AD#= and -ii. 6ED. 2070. T"ematic Eval(ation St(dy, AD# S(pport for Strengt"ening t"e Ena*ling Environment for Private Sector Development. +anila, AD#.

(ri!ate Sector De!elo" ent


levera$ed pro8ect! ;it# a total e!timated value of over -@@ billion" or over B time! %&'(! inve!tment0 %&'(! -KDK million inve!tment in private e<uit fund! ;a! matc#ed b -404 billion from ot#er financier!" D time! %&'(! inve!tment0 BD0 Since t#e approval of Strate$ 2020" t#e !#are of 9S+& tran!action! t#at !ee6 to directl promote inclu!ion of t#e poor" rural population!" or ;omen #a! remained at 1@I of total approval!" a$ain!t a $ro;in$ non-!overei$n portfolio0 *#ere i! no !pecific tar$et for 9S+ t#at promote inclu!ive bu!ine!!0 9S+& #ad limited operation! in poor and economicall di!advanta$ed re$ion! of non-frontier countrie!0 %dditionall " fe; pro8ect! !ou$#t to increa!e acce!! to infra!tructure" #ealt#" and education !ervice! for poor or rural population!0 *#ere i! evidence t#at a focu! on inclu!ion need not undermine profitabilit 0 +f t#e 1K1 9S+& pro8ect! approved durin$ 2000=2012" D2 #ave been evaluated0 *#e 12 inclu!ive pro8ect! #ad better development impact and inve!tment profitabilit ratin$! t#an t#e ot#er pro8ect! 2!ee table belo;30 Evaluation Ratin$! for 9ro8ect! ;it# &irect Inclu!ion Effect! and ot#er 9rivate Sector +peration! &epartment 9ro8ect! Inclu!ive +t#er Item 9ro8ect! 9ro8ect! 9o!itive development impact ratin$ 100I DBI 9o!itive %&' inve!tment profitabilit ratin$ 100I KDI 9o!itive overall !ucce!! ratin$ 100I DBI
%&' L %!ian &evelopment 'an6 Note: Ratin$! are ba!ed on Independent Evaluation &epartment evaluation report!" ;#ere available a! of @1 &ecember 201@" and ot#er;i!e on 9rivate Sector +peration! &epartment evaluation!0 Source: Independent Evaluation &epartment0

29

BK0 ' compari!on" 9S+& !caled up it! attention to miti$atin$ climate c#an$e ri!6 t#rou$# it! focu! on clean ener$ in 200A" ;it# increa!ed inve!tment! in combinedc cle $a! plant!" !olar po;er" and ;ind po;er0 *#e number and value of pro8ect! !ee6in$ to contribute directl to environmentall !u!tainable $ro;t# #a! increa!ed !ub!tantiall " alt#ou$# from a lo; ba!e" !ince t#e approval of Strate$ 20200 *#e !#are 2in term! of number3 of 9S+ promotin$ rene;able and clean ener$ " ener$ efficienc " and !olid ;a!te mana$ement increa!ed from BI of total 9S+ approval! durin$ 2000= 200B to 4AI durin$ 200A=20120 9S+ #ave been t#e main c#annel to promote rene;able ener$ !ource!" accountin$ for DAI of related %&' inve!tment volume!0 BB0 9S+ al!o !upported re$ional inte$ration focu!in$ on trade cooperation and climate c#an$e financin$ t#rou$# t#e *rade Finance 9ro$ram" Suppl C#ain Finance" and t#e Climate 9ublic-9rivate 9artner!#ip Fund0 BA0 Infra!tructure accounted for about D0I of 9S+ commitment!0 Ran$in$ from telecommunication! to ener$ $eneration pro8ect!" t#e!e tran!action! made !ub!tantial contribution! to economic $ro;t# and developmentE t#e 1A infra!tructure tran!action! approved after 2000 ;it# independent evaluation ratin$! pa!!ed t#e 10I #urdle rate for economic viabilit " ;it# man #avin$ rate! of economic return e>ceedin$ 20I0 Some pro8ect! al!o directl promoted inclu!ion" particularl in telecommunication! 2'o> C3 and ;ater" ;#ile ener$ pro8ect! indirectl facilitated rural electrification0 %bout #alf of 9S+&-!upported infra!tructure pro8ect! #elped catal Ge additional private inve!tment in t#e re!pective !ector! and countrie! b demon!tratin$ commercial fea!ibilit of private !ector participation" and introducin$ ne; tec#nolo$ie! or financial !tructure! and ri!6-!#arin$ arran$ement!0

9ro8ect! !ee6in$ to contribute directl to environmentall !u!tainable $ro;t# #ave increa!ed !ub!tantiall

30

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


'o> C: *elecommunication! 9ro8ect in 'an$lade!# 'an$lade!# #ad ver poor telep#one !ervice in t#e mid-1AA0!" ;it# one of t#e lo;e!t telep#one-den!itie! in t#e ;orld 2le!! t#an one telep#one per 100 in#abitant!30 *#e !ituation ;a! ;or!e in rural 'an$lade!#" ;it# le!! t#an one telep#one per 1"000 in#abitant!0 *#e !ector participant! ;ere t#e $overnment-o;ned 'an$lade!# *ele$rap# and *elep#one 'oard" t;o rural !ervice provider! primaril offerin$ pa telep#one !ervice! in di!trict center!" and a mobile telep#one operator0 In 1AAD" t#e $overnment $ranted t#ree additional cellular !ervice licen!e!0 In 1AAB" t#e %!ian &evelopment 'an6 approved an e<uit inve!tment of -10D million and a !enior loan of up to -@000 million for one of t#e companie! to con!truct and operate a nation;ide cellular telep#one ! !tem t#at ;ould provide common cellular !ervice! in t#e main citie!" and villa$e pa telep#one !ervice! in rural area!0 In 2004" t#e %!ian &evelopment 'an6 approved anot#er loan of up to -2000 million for an e>pan!ion of t#e net;or60 *#e pro8ect !urpa!!ed all operatin$ and financial ob8ective!" ;it# an economic internal rate of return of @0I0 *#e pro8ect made a !ub!tantial contribution to t#e $ro;in$ telecommunication indu!tr " and increa!ed private participation in t#e !ector0 *#e pro8ect promoted inclu!ivene!! t#rou$# it! villa$e p#one pro$ram" b ;#ic# t#e compan provide! t#e cellular !ervice ;#ile an affiliate lea!e! p#one! to villa$e entrepreneur!" ;#o in turn !ell telep#one !ervice! to fello; villa$er!0 *#e benefit! #ave been t;o-fold" providin$ earnin$ opportunitie! for t#e rural poor ;#o !erve a! villa$e p#one operator! ;#ile e>pandin$ telep#one acce!! to people in rural area!0 *oda " about K00"000 villa$e p#one operator! are active in appro>imatel B@"000 of t#e rou$#l BK"000 villa$e! 2ACI30 *#e number of villa$e p#one operator! continue! to increa!e" but t#eir income! #ave been decrea!in$ a! a re!ult of lo;er call rate! and mar$in!" competition" and an increa!e in t#e number of people t#at o;n p#one!0 % !urve of villa$e p#one u!er! found t#at t#e pro$ram ;a! perceived to #ave $reatl improved t#eir liveli#ood!" earnin$ opportunitie!" and ;ell-bein$ b allo;in$ t#em to 2i3 $et better price! for t#eir produce and !upplie!Ea 2ii3 !ave time and mone b not #avin$ to travelE 2iii3 $et remittance detail! from famil member! abroadE and 2iv3 in<uire about #ealt#-related i!!ue!0b )o!t re!pondent! al!o !tated t#at p#one !ervice! $reatl improved t#eir !afet and !ecurit " contributed to povert reduction" and empo;ered ;omen0 %not#er initiative i! it! $ro;in$ net;or6 of communit information center!" ;#ic# offer #i$#-!peed voice" data" and ot#er communication !ervice! at lo; rate! to previou!l unconnected people0
Note:
a

Source:

+ne of t#e !upported compan (! value-added !ervice! i! t#e Cell'aGaar" a u!er-$enerated mar6et ;#ere bu er! and !eller! are able to trade ba!ic $ood! 2e0$0" rice" fi!#" motorc cle!" u!ed $ood!3 u!in$ t#eir mobile p#one!0 In 200D" t#e compan launc#ed it! 7ealt#:ine !ervice" a medical call center !taffed b licen!ed p# !ician! t#at $ive! t#e compan (! mobile p#one !ub!criber! an opportunit to !ee6 #ealt#related advice or con!ultation t#rou$# an interactive teleconference0 Independent Evaluation &epartment0

A00 Financial !ector tran!action! made up about one-t#ird of 9S+& tran!action!0 )an of t#e!e tran!action! did not contribute to !u!tainable $ro;t# or inclu!ion" and 1@ of t#e 2C po!t-2000 tran!action! ;it# independent evaluation ratin$! rated le!! t#an !ati!factor or un!ati!factor for development impact0 *#e actual inve!tment !trate$ie! of !ome 9S+&-!upported private e<uit fund! differed from t#e development ob8ective! !tated at inve!tment approval" and emplo ment effect! ;ere not optimiGed0 )an ot#er financial !ector tran!action! ;it# S)E development ob8ective! ;ere lar$el

(ri!ate Sector De!elo" ent


ineffective in improvin$ t#e availabilit of S)E finance" ;it# total credit to !mall bu!ine!!e! not $ro;in$ or e>pandin$ more !lo;l t#an credit to ot#er bu!ine!! !e$ment!0 A10 Importantl " !ome of t#e financial intermediarie! !upported b 9S+& ;it# t#e ob8ective of facilitatin$ acce!! to finance for S)E! or rural area! lac6ed !trate$ie!" product!" or ! !tem! conducive to lendin$ to t#e!e bu!ine!! !e$ment!" and !et no !pecific tar$et! for !uc# lendin$0 ' compari!on" mo!t direct inve!tment! in financial in!titution! contributed to mar6et development b furt#erin$ competition or improvin$ mar6et infra!tructure0 A20 999! #ave become an in!titutional priorit " a! reflected in t#e 2012 999 operational plan04A %&' #a! adopted it! fir!t tar$et! for 999 pro8ect! and created up!tream activitie! to promote 999!" ;#ic# are e>pandin$ in all re$ional department! 2alt#ou$# limited b *% re!ource con!traint!30 Some !ucce!! #a! been !een ;it# t#e adoption of 999 policie! and la;! and ;it# !tren$t#enin$ of 999 unit! in countrie!" mainl in )IC!" and !imilar approac#e! are bein$ introduced in le!! developed member countrie!0 7o;ever" t#i! #a! not tran!lated into e>pected level! of actual 999 tran!action!" mainl a! a re!ult of a lac6 of pro$re!! on underl in$ !ector reform! 2particularl t#o!e related to !ector unbundlin$ and tariff!3" re$ulator capacit con!traint!" financial !ector i!!ue!" and overall inve!tment climate concern!0 %lt#ou$# t#ere #a! been a #i$# level of !upport for infra!tructure 999!" t#ere #ave been fe; comparable effort! ;it# non-infra!tructure 999!0 A@0 Strate$ 2020 !et no !pecific tar$et! for !upport to improve t#e enablin$ environment for 9S&0 *#e 2000 9rivate Sector &evelopment Strate$ and t#e 200D revi!ed !trate$ic frame;or6 did not provide !ub!tantial $uidance on conceptual or operational approac#e! to !tren$t#enin$ t#e enablin$ environment0 9artl becau!e of t#i! lac6 of direction" %&' polic and in!titutional !upport for !tren$t#enin$ t#e enablin$ environment for private enterpri!e! #a! been !maller 2and #a! $ro;n le!!3 t#an did !upport for inve!tment0 %l!o" unli6e in t#e 999 area" %&' lac6! a corporate !upport !tructure to provide operational $uidance" promote internal coordination ;it# ot#er relevant communitie! of practice and bet;een t#e variou! operational and 6no;led$e department! ;or6in$ on 9S& topic!" and develop !taff !6ill! to a level commen!urate ;it# 9S& main!treamin$ ob8ective!0 A40 Some element! of t#e inve!tment climate t#at are critical to fo!terin$ 9S& #ave not received ade<uate attention0 For e>ample" !upport for education to prepare a <ualified ;or6force #a! been limited at le!! t#an @I of total lendin$0 4#ile !upport for infra!tructure #a! been #i$#" more could be done to addre!! $ap! in electricit !uppl " ;#ic# to$et#er ;it# $overnance-related i!!ue! are 6e concern! of private entrepreneur!0 Support for tran!port infra!tructure did not full reco$niGe it! relevance for 9S&" a! rural income $eneration" con!truction indu!tr or lo$i!tic! i!!ue!" and con!traint! to private !ector participation ;ere in!ufficientl addre!!ed0 AC0 Support for reform! to reduce unnece!!ar re$ulator tran!action co!t!" en#ance competition" improve t#e rule of la; and propert ri$#t!" and reduce corruption i! !mall but increa!in$0 Succe!! in t#e!e area! #a! been mi>ed" ;it# reform! related to bu!ine!! re$i!tration" ta> admini!tration" procurement ! !tem!" cu!tom! admini!tration" and ot#er trade facilitation mea!ure! !#o;in$ promi!e" alt#ou$# t#eir ultimate impact on bu!ine!! tran!action co!t! and ne; enterpri!e formation ;ill depend on ade<uate implementation0
4A

31

999! #ave #ave become an in!titutional priorit " #o;ever" t#i! #a! not tran!lated into e>pected level! of tran!action!

Some element! of t#e inve!tment climate #ave not received ade<uate attention

%&'0 20120 9ublic-9rivate 9artner!#ip +perational 9lan 2012-20200 )anila0

32
% !ound financial ! !tem i! important for 9S& and economic development

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


AD0 % !ound financial ! !tem i! important for 9S& and economic development in $eneral0 Given it! role in inclu!ive and private !ector-led $ro;t#" Strate$ 2020 identified financial !ector development a! a core area" but !et no !pecific <uantitative tar$et! for !ector operation!0 Since approval of Strate$ 2020" financial !ector operation! #ave declined from 11I of total %&' financin$ 2for !overei$n and non!overei$n operation!3 durin$ 200@=200K to BI durin$ 200B=2012" ;it# t#e !#are of 9S+ in total !ector operation! increa!in$ from @4I to D0I0C0 Rea!on! for t#e ab!olute and relative decline of financial !ector operation! under %&'(! public !ector ;indo; need to be furt#er inve!ti$ated" but are li6el to include t#e increa!e in 9S)-related operation! durin$ t#e 200B-2010 cri!e! period!" reduced client need! and demand" and a more re!tricted focu! for countr !trate$ie! and pro$ram! on fe;er !ector!0 AK0 %t t#e !ame time" pro8ect !ucce!! ratin$! for !overei$n and non-!overei$n financial !ector pro8ect! #ave been notabl belo; t#e %&' avera$e0 Support for financial !ector reform! #ad #i$#l uneven re!ult!0 In mo!t countrie!" !upport for capital mar6et reform! did not !i$nificantl improve enterpri!e acce!! to e>ternal e<uit or debt financin$" de!pite improvement! in t#e le$al and re$ulator frame;or6! for !ecuritie! mar6et!0 )ore effort i! re<uired to addre!! enforcement problem! and improve frame;or6! for corporate $overnance" financial di!clo!ure" and debt recover 0

'an6in$ !ector reform! contributed to improved !ector !oundne!!

AB0 %&'-!upported ban6in$ !ector reform! contributed to improved !ector !oundne!! and facilitated increa!e! in private !ector credit0 7o;ever" in !ome countrie!" intere!t rate mar$in!" and t#u! financin$ co!t! for entrepreneur!" remain #i$# due to macroeconomic uncertaint " lac6 of competition" lac6 of reliable credit and financial information on borro;er!" inade<uate ri!6 mana$ement !6ill! of ban6!" and" to a le!!er e>tent" continuin$ intere!t rate di!tortion!0 AA0 % 2012 evaluation on %&'(! microfinance operation! 2footnote @23 found operation! le!! t#an effective in ac#ievin$ re!ult!0 %&' !upport concentrated on developin$ t#e polic environment and addre!!in$ !uppl !ide con!traint!" ;it# le!! focu! on demand-!ide i!!ue! !uc# a! developin$ t#e capacit of t#e poor to acce!! and u!e financial !ervice!" and to ma6e microfinance more inclu!ive and effective for t#e poor0 %&' !upport for pro-poor innovative product! and deliver model! ;a! limited" ;it# little attention to t#e !ocial performance of microfinance operation!0 %! a re!ult" t#e penetration of microfinance amon$ t#e poor remain! lo;0 %! of end 2010" t#e avera$e penetration in t#e 21 countrie! ;it# %&' microfinance !upport ;a! 20I for t#o!e livin$ belo; -102C per da 0 Countr ca!e !tud !urve ! !#o;ed t#at fe;er t#an AI of microfinance client! lived on le!! t#an -102C per da " and fe;er t#an 22I lived on le!! t#an -2 per da 0

'0

Recommendation!

1000 %&'(! private !ector ;or6 can and !#ould ma6e $reater contribution! to t#e !trate$ic a$enda! of Strate$ 2020" in particular inclu!ive $ro;t#0 'a!ed on independent evaluation!" action! in t#e follo;in$ area! are critical" and %&' mi$#t con!ider updatin$ it! 9S& !trate$ to reflect t#e!e prioritie!0 1010 Effort! to improve t#e enablin$ environment for private !ector development are critical0 Support for bu!ine!! re$ulator " competition and $overnance reform! need! to be increa!ed and en#anced t#rou$# a $reater focu! on outcome! durin$ pro8ect
C0

Calculated !ector !#are! do not include financial !ector component! in multi!ector operation!0

(ri!ate Sector De!elo" ent


de!i$n" and ade<uate !upport for reform implementation0 %dditionall " !upport need! to al!o focu! on alleviatin$ bu!ine!! con!traint! for !mall" rural and female entrepreneur!0 999! can be furt#er facilitated t#rou$# more !upport for buildin$ t#e re<uired re$ulator capacit and implementin$ underl in$ !ector reform!" particularl ;it# re$ard to !ector unbundlin$ and tariff 2and !ub!id 3 ! !tem! t#at en#ance acce!! b t#e poor ;#ile reflectin$ true co!t!" and t#ereb minimiGin$ economic di!tortion! and t#e u!e of natural re!ource!0 1020 Financial !ector operation! need !tren$t#enin$" includin$ t#o!e !ee6in$ to en#ance S)E development b focu!in$ on addre!!in$ underl in$ i!!ue! t#at affect private !ector financin$ acce!! and co!t!" rat#er t#an financial intermediation-t pe pro8ect!0 *#i! re<uire! 2i3 continued %&' en$a$ement in polic dialo$ue on financial !ector reform" includin$ rectif in$ cau!e! of intere!t rate di!tortion!" !tren$t#enin$ financial mar6et competition and re$ulation" !tren$t#enin$ financial mar6et !upervi!ion and re$ulator enforcement" improvin$ frame;or6! for financial and corporate $overnance" and developin$ functionin$ !ecured tran!action and ban6ruptc re$ime!E and 2ii3 more !upport for improvin$ credit information and credit ri!6 mana$ement ! !tem!" and financial literac pro$ram!0 10@0 %&'(! private !ector ;or6 need! to do more to !upport inclu!ive $ro;t#0 9S+& need! to e>plore #o; it can be!t !upport companie! ;it# inclu!ive bu!ine!! model!" includin$ t#rou$# *% and appropriate financin$ mec#ani!m!0 In addition" 9S+& !#ould e>plore #o; t#e outreac# of !upported inve!tment! can be improved t#rou$# complementar mea!ure! b %&' or ot#er development partner!0 9olic dialo$ue b re$ional department! ;it# client $overnment! on reform! to remove barrier! to private inve!tment in !ocial infra!tructure and !ervice! ;ould #elp increa!e viable pro8ect opportunitie!0 1040 9S+& can al!o provide more !upport in underdeveloped re$ion! of )IC!" ;#ere mo!t of %!ia(! poor live0 In addition to recent improvement! in monitorin$ t#e direct emplo ment effect! of 9S+" !upported private e<uit fund! need !pecific !trate$ie! to optimiGe t#eir contribution! to emplo ment $eneration" if t#i! i! amon$ t#eir !tated development impact!0 10C0 %&' need! to !tren$t#en t#e coordination of it! 9S& !upport0 4#ile t#ere #a! been !ome improvement in collaboration bet;een re$ional department! and 9S+&" t#ere i! !till little ! ner$ bet;een %&'(! 9S+! and ot#er operation!0 Re$ional department! need to focu! enablin$ environment !upport on 6e area! of 9S+" and to become more involved in pro8ect development activitie!E ;#ile 9S+& need! to become more activel en$a$ed in 9S& and enablin$ environment ;or60 *#ere i! need to determine #o; !uc# cooperation can implemented" for e>ample t#rou$# or$aniGational c#an$e! and !taff incentive!0 Inve!tment !upport need! to be carefull !e<uenced ;it# enablin$ environment !upport" particularl for S)E development and 999!0 10D0 *#ere i! !ub!tantial room to improve t#e !cope" <ualit " and u!e of private !ector a!!e!!ment!" ;#ic# could al!o improve main!treamin$ of t#e 9S& a$enda acro!! %&' operation!E ! !tematic con!ideration and monitorin$ of potential private !ector contribution! and impact! in countr and !ector !trate$ie! and operation! can al!o #elp in t#i! re$ard0 10K0 *o improve t#e impact! of microfinance operation!" %&' need! to refine t#e microfinance development !trate$ to adopt ne; practice!" bu!ine!! model!" and product!" to !upport financial inclu!ion0 Effort! are needed to reduce demand-!ide

33

Financial !ector operation! need !tren$t#enin$

%&'P! private !ector ;or6 need! to do more to !upport inclu!ive $ro;t#

*#ere i! !ub!tantial room to improve private !ector a!!e!!ment!

34

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


con!traint! 2e0$0" financial literac of borro;er!" con!umer protection30 % $reater focu! on client! 2e0$0" b combinin$ acce!! to finance ;it# liveli#ood pro$ram!3 and u!e of financial innovation and tec#nolo$ie! ;ill en#ance effectivene!!0 4#en t#e polic environment i! in place" t#ere i! a need to focu! on mar6et infra!tructure development to en!ure a !tron$ and !u!tainable e>pan!ion of microfinance operation!0

C7%9*ER C

5no;led$e Solution!
10B0 *#e demand for and !uppl of 6no;led$e are bot# evolvin$ rapidl " ;#ile t#e mean! of appl in$ it t#rou$# ne; tec#nolo$ie! and net;or6! are e>pandin$0 *#e e>pandin$ 6no;led$e ba!e ;it#in countrie! complement! re$ional and $lobal e>perti!e" and re<uire! muc# $reater appreciation and better coordination of t#e!e multiple 6no;led$e !ource!0 10A0 Strate$ 2020 ;a! t#e fir!t %&' !trate$ to pa !pecial attention to t#e 6no;led$e a$enda and to reco$niGe 6no;led$e a! a catal !t for development0 *#e !trate$ committed %&' to a lar$er role in levera$in$ 6no;led$e !olution! for t#e re$ion" and called for action! t#at included: 2i3 !upportin$ a more robu!t bod of empirical 6no;led$e to re!olve critical ob!tacle! to development" 2ii3 identif in$ and pa!!in$ on be!t practice!" 2iii3 !upportin$ pilot pro8ect!" 2iv3 enric#in$ internal learnin$ from communitie! of practice 2Co9!3 and lon$-term !trate$ic partner!#ip!" and 2v3 di!tributin$ 6no;led$e in ;a ! t#at #ave bot# an immediate impact and catal tic force0

*#e demand for and !uppl of 6no;led$e are bot# evolvin$ rapidl

%0

%&'(! Re!pon!e

1100 %&' #a! ta6en !ome !trate$ic and or$aniGational !tep! to addre!!in$ t#e $ro;in$ demand from countrie! for a!!i!tance t#at e>tend! be ond financial and pro8ect !upport0 % 2012 evaluation of %&' 6no;led$e product! and !ervice! 259S3 found t#at pro$re!! #a! been made on t#e 6no;led$e a$enda in variou! area!" leadin$ to an overall po!itive a!!e!!ment of re!pon!ivene!!0 *#e evaluation found $ood 6no;led$e practice! amon$ !ome Co9! 2e0$0" tran!portation and ;ater3" re$ional department! 2e0$0" Sout#ea!t %!ia and Ea!t %!ia3" and re!ident mi!!ion! 2e0$0" t#e 9RC and India30 Effort! #ave al!o been made to improve !ome a!pect! of t#e enablin$ environment for 6no;led$e mana$ement" includin$ improvement! in information tec#nolo$ ! !tem! and ;eb!ite!0C1 1110 *#e evaluation found e>ample! of !ucce!! !torie! and e>ceptional" #i$#-<ualit 59S 2'o> D30 5no;led$e di!!emination #a! e>panded" ;it# !tead $ro;t# in 59S do;nload!" ;eb!ite traffic" and publication !ale!0 Since 200C" %&' #a! conducted periodic internal and e>ternal !urve ! to $at#er feedbac6 on it! 6no;led$e ;or60 1120 *#e evaluation found t#e implementation of %&'(! 200A=2011 5no;led$e )ana$ement %ction 9lan to be !ati!factor " but ;it# !ome $ap!0 *#e recent adoption of t#e 5no;led$e )ana$ement &irection! and %ction 9lan 2201@=201C3 provide!
C1

%&' #a! ta6en !ome !tep! to addre!!in$ $ro;in$ demand

5no;led$e di!!emination #a! e>panded

*#i! c#apter dra;! #eavil on findin$! and recommendation! from t#e 2012 evaluation: IE&0 20120 Special Evaluation Stud on 5no;led$e 9roduct! and Service!: 'uildin$ a Stron$er 5no;led$e In!titution0 )anila: %&'0

36

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


$uidance on !ome 2but not all3 i!!ue! and area!" includin$ a clearer definition of ;#at con!titute! a 6no;led$e !olution and #o; to prioritiGe and implement !uc# !olution!0

9ublication output #a! e>panded !i$nificantl and $ro;n more diver!e

11@0 %&'(! publication output #a! e>panded !i$nificantl and $ro;n more diver!e !ince 200B" in term! of format! and covera$e0 *#e number of fla$!#ip and 6no;led$e andJor re!earc# publication! produced b 6no;led$e and re$ional department! doubled durin$ 200K=2011 2Fi$ure 1030 %&'(! &epartment of E>ternal Relation! e!timate! t#at t#e total publication output 2includin$ all publication cate$orie!3 #a! $ro;n five-fold !ince 200K0 'o> D: E>ample! of /!eful 5no;led$e 9roduct! and Service! *#e 2012 evaluation on 59S identified a number of !tudie!" pro8ect!" and initiative! ;it# #i$# relevance" u!e and influence0 In Central and 4e!t %!ia" an e>ample ;a! t#e C%REC *ran!port and *rade Facilitation: 9artner!#ip for 9ro!perit !tud a ;#ic# $uided t#e re$ion(! !trate$ for tran!port" trade" and inte$ration more broadl 0 %&'(! ;or6 on S+E reform! t#rou$# t#e 9rivate Sector &evelopment Initiative in t#e 9acific ;a! reco$niGed a! influential" !upportin$ #i$#-level dialo$ue and learnin$ alon$!ide on$oin$ S+E reform! acro!! a number of countrie!0 %! an information tec#nolo$ e>ample" t#e %RIC ;eb!ite #a! proven to be an effective portal for !#arin$ 6no;led$e and facilitatin$ polic dialo$ue0 In 9RC" !upport for t#e eco-compen!ation a$enda pla ed a ma8or role in creatin$ and !#arin$ $ood practice! and !timulatin$ polic dialo$ue0 %&'(! lon$-term re$ional cooperation ;or6 in t#e Greater )e6on$ Subre$ion al!o provide! e>ample! of u!eful 6no;led$e ;or60 %&'(! Social 9rotection Inde> i! a uni<ue 6no;led$e product ;it# #i$# relevance to development polic in t#e re$ion0 *#e evaluation encoura$ed %&' to ma6e t#e!e !pecial e>ample! t#e norm rat#er t#an t#e e>ception" offerin$ !u$$e!tion! on #o; t#i! mi$#t be done" includin$ t#rou$# $reater focu! on client 6no;led$e need!" continued improvement! in enablin$ tec#nolo$ie!" and !tron$er control of publication <ualit 0
%&' L %!ian &evelopment 'an6" %RIC L %!ia Re$ional Information Center" C%REC L Central %!ia Re$ional Economic Cooperation" G)S L Greater )e6on$ Subre$ion" 59S L 6no;led$e product! and !ervice!" 9RC L t#e 9eople(! Republic of C#ina" S+E L !tate-o;ned enterpri!e0 a %&'0 200A0 C%REC *ran!port and *rade Facilitation: 9artner!#ip for 9ro!perit 0 )anila0 Source: IE&0 20120 Special Evaluation Stud on 5no;led$e 9roduct! and Service!: 'uildin$ a Stron$er 5no;led$e In!titution0 )anila: %&'0

% number of concern! and con!traint! need attention attention

1140 % number of concern! and con!traint! need attention0 4#ile %&'(! 59S output #a! $ro;n !ub!tantiall " a ;ide ran$e of 6no;led$e mana$ement approac#e! prevail ;it#in t#e or$aniGation ;it#out !ufficient co#erence" coordination" and con!ideration of ;#et#er t#e fulfill priorit need!0 *#i! #a! created a ri!6 to <ualit " a !en!e of confu!ion" and lac6 of clarit on t#e direction of 6no;led$e mana$ement0

+no$ledge Solutions 37
Fi$ure 10: %&' Fla$!#ip and 5no;led$e and Re!earc# Re!earc# 9ublication! b &epartment 2004= 2004=2011

%&' L %!ian &evelopment 'an6" C4R& L Central and 4e!t %!ia &epartment" &ER L &epartment of E>ternal Relation!" E%R& L Ea!t %!ia &epartment" ER& L Economic! and Re!earc# &epartment" +REI L +ffice of Re$ional Economic Inte$ration" 9%R& L 9acific &epartment" RS&& L Re$ional and Su!tainable &evelopment &epartment" S%R& L Sout# %!ia &epartment" SER& L Sout#ea!t %!ia &epartment0 Note: Fla$!#ip and 6no;led$e andJor re!earc# publication! are cate$orie! % and ' in %&'(! publication cla!!ification ! !tem" includin$ boo6!" brief!" fla$!#ip !erie! 2e0$0 annual fla$!#ip publication!3" 8ournal!" report!" !tand-alone fla$!#ip! 2i0e0 one-off fla$!#ip publication!" ;or6in$ paper!0 Source: IE&0 20120 Special Evaluation Stud on 5no;led$e 9roduct! and Service!: 'uildin$ a Stron$er 5no;led$e In!titution0 )anila: %&'0

11C0 *#e inade<uate #arne!!in$ and di!!emination of tacit 6no;led$e impede! %&' effort! to create a competitive advanta$e for it! 59S at t#e countr level0 *#e role of Co9! i! undoubtedl important" but t#eir performance varie! #i$#l 0 Identification of countr -level 6no;led$e need! i! a $ap0 )oreover" t#e ;or6 pro$ram and bud$et frame;or6 doe! not !#o; direct re!ource allocation! to;ard !pecific 6no;led$e activitie! 2be ond departmental bud$et allocation!3" and t#e pro8ect cla!!ification ! !tem doe! not capture 6no;led$e ;or60C2 In t#e re$ional department!" 6no;led$e ;or6 i! often $iven lo;er priorit relative to lendin$ ;or60 11D0 4#ile %&' i! becomin$ more 6no;led$e oriented" t#ere remain! a poor under!tandin$ of 6no;led$e mana$ement" !temmin$ lar$el from a lac6 of clarit and common a$reement on 6e concept! and term! and t#e re!pective 6no;led$e mana$ement role! of different or$aniGational unit!0 4ea6 $uidance a! ;ell a! ineffective coordination acro!! department! and acro!! 6no;led$e c#annel! 2bet;een #ead<uarter! and re!ident mi!!ion!3 are ot#er 6e con!traint!0 *#e proliferation of publication! reflect! $reater effort to $enerate and di!!eminate 6no;led$e" but t#e poor <ualit of !ome publication! po!e! ri!6! to %&'(! reputation0 *o #elp vi!ualiGe and clarif %&'(! 6no;led$e mana$ement ! !tem and ;#ere reform! and improvement! ma be tar$eted" t#e 2012 evaluation propo!ed t#e 6no;led$e mana$ement frame;or6 depicted in Fi$ure 110 *#e frame;or6 illu!trate! t#at %&'(! 6no;led$e mana$ement ! !tem compri!e! man di!tinct but dependent function! and proce!!e!0 Rai!in$ t#e overall effectivene!! of t#e ! !tem t#erefore re<uire! coordinated reform! and improvement! acro!! all t#e!e area!" ver!u! piecemeal and ot#er;i!e uncoordinated reform!0

5no;led$e ;or6 i! often $iven lo;er priorit relative to lendin$ ;or6 %&'P! 6no;led$e mana$ement ! !tem compri!e! man di!tinct but dependent function!

C2

% revi!ed pro8ect cla!!ification ! !tem propo!e! to add a ne; 6no;led$e mar6er for pro8ect!

38

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


Fi$ure 11: 5no;led$e )ana$ement Frame;or6

&)C L developin$ member countr " 5) L 6no;led$e mana$ement0 a Note!: In!titutional frame;or6 include! leader!#ip and !taff o;ner!#ip and bu -inE in!titutional !tructure!E incentive!E 5) policie!" !trate$ie!" and $uideline!E and 5) !taffin$ and e>pert!0 b Enablin$ tec#nolo$ie! include information tec#nolo$ infra!tructure and tool! for !tora$e" di!!emination" e>c#an$e" and collaboration0 Source: Independent Evaluation &epartment0

% ma8or concern relate! to #o; %&' #arne!!e! and levera$e! tacit 6no;led$e

11K0 % ma8or concern relate! to #o; %&' #arne!!e! and levera$e! tacit 6no;led$e and #o; ;ell !taff embed 6no;led$e in pro8ect de!i$n! and impart it in t#e cour!e of implementation0 4#ile !ome !taff #ave developed deep e>perti!e in !ome core bu!ine!! area!" t#ere i! concern t#at t#i! ric# e>perience i! not bein$ ade<uatel codified and !#ared acro!! different part! of t#e or$aniGation0 +ne of t#e $oal! of t#e 5no;led$e )ana$ement %ction 9lan t#at ;a! lar$el not ac#ieved i! t#e capturin$ of tacit 6no;led$e from departin$ !taff0 *#e 6no;led$e t#at i! or could be uni<ue to %&'H ;#ic# ;ould $ive it a !tron$ comparative advanta$eHi! 6no;led$e of ;#at ;or6! and ;#at doe!n(tE !taff $ain !uc# 6no;led$e eac# da in t#e field" a! t#e de!i$n and monitor t#e implementation of pro8ect!0 11B0 *ec#nical a!!i!tance i! an important tool for %&'" but it i! not $iven attention commen!urate ;it# it! potential0 Evaluation! #ave rai!ed concern! on t#e u!e of *% for 6no;led$e0C@ *#e relevance of *% i! increa!in$ a! %&'(! 6no;led$e role continue! to e>pand and a! client demand for 6no;led$e and capacit development !upport continue! to diver!if 0 4#ile ca!e !tudie! !#o; e>ample! of !ucce!!ful *% u!e" in in!tance! ;#ere %&' #a! provided continued" lon$-term !upport" evaluation! al!o find lin$erin$ c#allen$e!0 For e>ample" re$ional *% i! an important public $ood provided b %&'" but it i! not ;ell coordinated and inte$rated ;it# ot#er %&' pro$ram!0 *#e !ame applie! to man *% output! ori$inatin$ from %&'(! 6no;led$e department!0 Countrie! are often in!ufficientl involved in *% de!i$n and implementation" ;#ic# reduce!
C@

IE&0 200K0 Special Evaluation Stud : 9erformance of *ec#nical %!!i!tance0 )anila: %&'0 IE&0 Fort#comin$0 *#ematic Evaluation Stud : Role of *ec#nical %!!i!tance in %&'0 )anila: %&'0

+no$ledge Solutions 39
o;ner!#ip and !u!tainabilit 0 *% completion report! var in <ualit and are not u!ed effectivel to capture and !#are 6no;led$e0 11A0 %&'(! current model for proce!!in$ and admini!terin$ pro8ect! $ive! little !upport to implementation 2di!cu!!ed furt#er in C#apter D3" lac6! continuit " and i! not ;ell inte$rated ;it# %&' $oal! re$ardin$ 6no;led$e0 *eam! rel increa!in$l on con!ultant!" ;#o often cannot impart in!titutional 6no;led$e ;#en de!i$nin$ and !upportin$ pro8ect implementation0 Con!ultant! al!o lac6 t#e incentive to e>tract relevant le!!on! and incorporate t#em into %&'(! 6no;led$e ba!e0 4#ile t#e re!ource! and !taffin$ for 6no;led$e mana$ement #ave more t#an doubled 2from -@0 million in 200A to -DA million in 2012" ba!ed on bud$et allocation! to t#e 6no;led$e department!3" operational !taff appear to lac6 re!ource! to devote to !uc# operation!lin6ed 6no;led$e ;or60

*eam! rel increa!in$l on con!ultant!" ;#o often cannot impart in!titutional 6no;led$e

'0

Recommendation!

1200 :eadin$ 6no;led$e in!titution! around t#e ;orld are movin$ a;a from a #uband-!po6e" one-;a di!!emination model to;ard! a more interactive" open !ource" 6no;led$e co-creation model" includin$ more emp#a!i! on coordination" u!in$ local 6no;led$e and Sout#=Sout# learnin$0 *#i! evolution brin$! a !i$nificant opportunit to better levera$e 6no;led$e to rai!e development outcome!0 1210 %&' reco$niGe! t#at it! relevance and re!pon!ivene!! to client!" and it! abilit to !upport a triple bottom line a$enda" ;ill depend increa!in$l on it! effectivene!! a! a 6no;led$e in!titution0 Increa!in$ t#e development impact of %&'(! 6no;led$e ;or6 re<uire! a better coordinated and inte$rated approac# t#at addre!!e! ;ea6ne!! in t#e entire 6no;led$e mana$ement ! !tem 2Fi$ure 1130 1220 Evaluation findin$! !u$$e!t t#at %&' !#ould !tren$t#en: 2i3 identification of 6no;led$e need!" amon$ bot# internal and e>ternal client!E 2ii3 $eneration of #i$#<ualit " cuttin$-ed$e" and in-demand 6no;led$e product! 2e0$0 t#rou$# !tron$er <ualit control mec#ani!m!3E 2iii3 capturin$ and !#arin$ of embedded and tacit 6no;led$e acro!! %&' department! and countrie!E 2iv3 inte$ration of 6no;led$e ;or6 into countr !trate$ie! and pro8ect c cle!" a! !ome re$ional department! #ave be$un to underta6e ;it# $ood !ucce!! 2e0$0" t#rou$# countr 6no;led$e plan!3E 2v3 t#e role of re!ident mi!!ion! in t#e 6no;led$e c cleE 2vi3 internal coordination" ;it# clearer delineation amon$ 6no;led$e department!E and 2vii3 incentive ! !tem!" ;it# better reco$nition and re;ard! for !tand-out 6no;led$e ;or60 Continued improvement! in enablin$ tec#nolo$ie! are al!o critical" a! are effort! to better monitor t#e u!e of 2and client !ati!faction ;it#3 %&' 59S0 12@0 Greater attention to t#e 6no;led$e need! nece!!ar 0 *#e value of t;o-;a 6no;led$e tran!fer 8u!tification for %&'(! continued pre!ence in )IC! influence t#e #ave on re$ional and public $ood!" lo;er-income countrie!0 of t#e $ro;in$ )IC clientele i! #a! been #i$#li$#ted b )IC!0 % i! t#e potential 6no;led$e and ;#ic# %&' can #elp c#annel to

%&' reco$niGe! t#at it! relevance ;ill depend increa!in$l on it! effectivene!! a! a 6no;led$e in!titution

1240 %&' need! to develop !i$nature 6no;led$e area! and !tren$t#en $eneration" coordination and collaboration on t#e!e0 %&' can !trive to be at t#e forefront in area! of critical importance to client! and t#e re$ion0 Importantl " to remain relevant %&' !#ould not limit it! !i$nature area! to t#e !ector! in ;#ic# it provide! financin$0 %&' can be an intellectual leader in ot#er area!E for e>ample" in advocatin$ for re$ional public $ood!" a! it relate! to defore!tation 2para B430 %! ot#er or$aniGation! 2e0$0" development partner!" t#in6 tan6!" univer!itie!" and non$overnment or$aniGation!3

Greater attention to t#e 6no;led$e need! of )IC clientele i! nece!!ar

40

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


e>pand t#eir 6no;led$e ;or6" %&' need! to improve it! coordination and collaboration ;it# t#em0

)ore attention !#ould be $iven to t#e u!e and effectivene!! of %&' *%

12C0 )ore attention !#ould be $iven to t#e u!e and effectivene!! of %&' *%" includin$ t#e introduction of reimbur!able *% arran$ement!" and dedicated tru!t fund! for underta6in$ and deepenin$ competence in !i$nature 6no;led$e area! ;it# #i$# potential for !olvin$ t#e re$ion(! mo!t difficult development c#allen$e!0 Greater effort i! needed to en!ure #i$#er-<ualit *% de!i$n! and completion report!0 *% can re!pond muc# more to demand" and t#ereb focu! more !#arpl on t#e mo!t critical problem! faced b countrie!0

C7%9*ER D

7arne!!in$ Re!ource! for 'etter +utcome!


12D0 /nder Strate$ 2020" %&' committed to: 2i3 improvin$ t#e co#erence of !trate$ie! and policie! in !upport of Strate$ 2020E 2ii3 en#ancin$ t#e #uman re!ource! and !6ill! mi> in a ran$e of field!" includin$ infra!tructure" environment and private !ector operation!E 2iii3 improvin$ t#e or$aniGational !tructure" includin$ to: fo!ter profe!!ional e>cellence and promote ! ner$ie! amon$ operation!" and decentraliGe deci!ion-ma6in$ to re!ident mi!!ion!E and 2iv3 increa!in$ corporate re!pon!ivene!! to countrie! b lo;erin$ tran!action co!t! for pro8ect preparation and implementation and reducin$ documentation re<uirement!0

12K0 In addition" a corporate re!ult! frame;or6 ;a! introduced to monitor pro$re!! a$ain!t t#e $oal! !et out in Strate$ 2020" and a mec#ani!m ;a! put in place t#rou$# t#e &evelopment Effectivene!! Revie; to monitor performance annuall and dra; up action plan! ;#ere re<uired0 12B0 4it# t#e!e reform! Strate$ 2020 intended to tran!form %&' and lift it! performance" t#ereb enablin$ it to more effectivel re!pond to t#e re$ion(! ma8or development c#allen$e!0 4#ile %&' #a! ta6en !ome !tep! to implement t#e!e c#an$e!" t#e full effect!Hand t#e intended in!titutional tran!formationH#ave et to be realiGed0 *#e in!titutional tran!formation ;ill not occur ;it#out !tron$er demand for re!ult! from %&' leader!#ip0

Strate$ 2020 intended to tran!form %&' and lift it! performance

%0

%&'(! Re!pon!e

12A0 Strate$ and polic co#erence0 In line ;it# Strate$ 2020(! call for improved !trate$ic and polic co#erence" %&' adopted !ome C0 ne; directional document! 2policie!" plan!" $uideline!" etc03 from 200B=201@ to !upport and operationaliGe Strate$ 2020 2%ppendi> 230 *#e document! $ive direction on variou! element! of Strate$ 2020: !trate$ic a$enda!" driver! of c#an$e" t#e five core and ot#er operational area!" a! ;ell a! in!titutional and or$aniGational tran!formation0 7o;ever" in !ome important area!" t#e formulation of clear operational $uidance ;a! !ub!tantiall dela ed 2!uc# a! in t#e ca!e of inclu!ive $ro;t#3" or not underta6en at all0 For e>ample" alt#ou$# a 200K evaluation #i$#li$#ted t#e need for a decentraliGation !trate$ "C4 no
C4

%&' adopted ne; directional document! to !upport and operationaliGe Strate$ 2020

IE&0 200K0 Special Evaluation Stud : Re!ident )i!!ion 9olic and Related +peration!: &eliverin$ Service! to Client!0 )anila: %&'0

42

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


clear $uidance #a! been i!!ued0 :i6e;i!e" )IC and 9S& !trate$ie! #ave not been updated after Strate$ 2020" de!pite t#e emp#a!i! Strate$ 2020 placed on t#e!e topic!0

%&' #a! ac#ieved !taffin$ e>pan!ion" but concern! on t#e overall !6ill! mi> remain

1@00 Staffin$0 %&' #a! ac#ieved !taffin$ e>pan!ion" and !taff repre!ent a $reat !tren$t#" but concern! on t#e overall !6ill! mi> remain0 Follo;in$ t#e adoption of Strate$ 2020 in 200B" %&' under;ent a $eneral capital increa!e in 200A" leadin$ to a !i$nificantl increa!ed lendin$ pro$ram0CC *#e $eneral capital increa!e ;a! accompanied b a 'oard deci!ion to add C00 ne; !taff member! bet;een 2010 and 2012" ;#ic# %&' ac#ieved0 *#e addition ;a! !pread acro!! cate$orie! 21B0 international !taff member!" 1K0 national !taff member!" and 1C0 admini!trative !taff member!3E location! 2@D0 in #ead<uarter! and 140 in re!ident mi!!ion!3E and !ector!0 )uc# of t#e !taff increa!e came at lo;er !taff $rade! due to internal promotion! at #i$#er $rade!0 1@10 % revie; of t#e ;or6force e>pan!ion indicated t#at nearl #alf 24BI3 of t#e additional !taff member! 2t#i! tall include! bot# tec#nical and non-tec#nical !upport !taff3 ;ent into ,priorit !ector! and t#eme!. in t#e operation! department! and re!ident mi!!ion!" to !upport !taff capacit in pro8ect admini!tration and portfolio mana$ement" !afe$uard! compliance" $ender and development" and !ocial development0CD 7o;ever" durin$ con!ultation! ;it# %&' Co9! for t#i! report 2%ppendi> 43" Co9 member! identified !6ill !#orta$e! and $ap! acro!! a number of critical area!" includin$ in core area! of Strate$ 20200 Furt#er" !everal Co9! e>pre!!ed fru!tration over ;#at t#e perceive a! a de-prioritiGation and !tead de-!6illin$ of e>perti!e in t#eir area! in recent ear!0 1@20 *#e allocation of !taff ;it#in t#e or$aniGation i! a related concern0 4#ile t#e !taff increa!e re!pond! to con!i!tent evaluation me!!a$e! t#at %&' pa more attention to pro8ect implementation and !upervi!ion" bot# in tec#nical term! and in a!!urin$ due dili$ence and $ood $overnance" t#e additional !taff member! ;ere !cattered acro!! variou! department! and divi!ion!0 Fi$ure 12 provide! a ba!ic illu!tration of #o; international !taff 2b 8ob titleE !ee note under Fi$ure 123 are !cattered acro!! or$aniGational unit! and core operational area!0 +nl four !ector !pecialiGation! #ave 10 international !taff member! or more in one department 2an indicator of a $ood critical ma!! of e>perti!e30 % critical concentration of tec#nical e>perti!e in area! of operation i! e!!ential to en!ure <ualit pro8ect! t#at deliver outcome! and !u!tainabilit 0

%&'(! or$aniGational !tructure fra$ment! !6ill!

1@@0 *#e Co9! con!titute an informal approac# to 6no;led$e !#arin$" but t#eir u!e to en!ure !#arin$ and co#erence of approac#e! and 6no;led$e i! a c#allen$e0 *#i! i!!ue ;a! #i$#li$#ted in t#e 2012 6no;led$e evaluation 2footnote 203" ;#ic# !tated t#at %&'(! current or$aniGational !tructure fra$ment! !ector and t#ematic !6ill! in multiple unit! and team! acro!! re$ional department!" and pre!ent! a formidable c#allen$e to effective and efficient 6no;led$e mana$ement and !#arin$ acro!! t#e in!titution0 *#i! concern ;a! al!o voiced durin$ con!ultation! ;it# Co9! 2%ppendi> 430

CC CD

+peration! durin$ 200B=2012 repre!ented a KCI increa!e over 200@=200K0 %&'0 201@0 Revie; of Implementation of @-Fear 4or6force 9lan 2010=20120 )anila0

,arnessing Resources %or Better -utco es 43


Fi$ure 12: International Staff 4it# a Nob *itle Indicatin$ a Sector SpecialiGation 0 E0er!y $0 -01r$str2#t2re Tr$0s)ort W$ter +r3$0 E04"ro0&e0t $0 %l"&$te %h$0!e Re!"o0$l ,"0$0#"$l Se#tor 5 3 3 3 10 10 9 6 7 4 4 3 9 4 7 2 3 10 2 20 11 12 3 8 8 2 2 3 5 2 3 5 6 30 5 7 3 2 40 9 8 50

2 4 2 3 2 10 13 3 9

E 2#$t"o0 1 2 1 2 4 11 RS** 5RESAR* %WR* EAR* SER* .AR* RM

'9)S& L 'ud$et" 9er!onnel" and )ana$ement S !tem! &epartmentE C4R& L Central and 4e!t %!ia &epartmentE E%R& L Ea!t %!ia &epartmentE +REIL +ffice of Re$ional Economic Inte$rationE 9%R& L 9acific &epartmentE R) L re!ident mi!!ionE RS&& L Re$ional and Su!tainable &evelopment &epartmentE S%R& L Sout# %!ia &epartmentE SER& L Sout#ea!t %!ia &epartment0 Note: *#e c#art i! provided for illu!trative purpo!e! onl 0 *#e c#art !#o;! di!tribution of 2CB international !taff member!" !trictl b 8ob title" u!in$ a ro!ter provided b '9)S& for !taffin$ compo!ition a! of @1 +ctober 201@0 Staff member! ;ere !eparated into 1A cate$orie! b 8ob title" includin$ cate$orie! reflectin$ %&'(! five core operational area!0 %dvi!or! and #ead!" director! and deput director! ;ere placed in t#eir o;n cate$orie!0 In ca!e! ;#ere a po!ition #ad a furt#er !pecialt " !uc# a! a tran!port economi!t or an urban development !peciali!t 2;ater !uppl and !anitation3" it ;a! placed in t#e more !pecific cate$or 0 +perational !taff t#at #ave a !ector !pecialiGation but ;#o!e 8ob title doe! not indicate t#i! are e>cluded from t#i! illu!tration0 Source: IE& anal !i! ba!ed on '9)S& !taff ro!ter a! of @1 +ctober 201@0

1@40 +r$aniGational !tructure0 %&'(! current !tructure ;it# five re$ional department! i! intended to improve t#e countr focu!" but #a! led to a di!per!al of 6no;led$e and !6ill!0 *#i! ma e>plain ;# pro8ect mana$er! rel increa!in$l on con!ultant! for pro8ect ;or60 *#i! $ro;in$ reliance on con!ultant! #a! co!t!" includin$ for in!titutional 6no;led$e and !taff learnin$" a! #i$#li$#ted in t#e 2012 6no;led$e evaluation0CK 1@C0 *#e or$aniGational !tructure #a! been e>panded ;it# t#e addition of t;o vice pre!ident!0 *#e po!ition of vice pre!ident for private !ector operation! and co-financin$ i! intended to increa!e attention to 9S+" but #o; and ;#et#er t#i! ;ill improve coordination bet;een !overei$n and non-!overei$n operation! remain! unclear0 *#e 6no;led$e mana$ement and !u!tainable development vice pre!idenc a! !i$nificantl e>panded" but buildin$" deliverin$ and !#arin$ 6no;led$e acro!! t#e man location! in %&' ;#ere 6no;led$e i! and can be delivered and !#ared remain! a c#allen$e" a! doe! coordination bet;een 6no;led$e and operation! department!0 1@D0 &ecentraliGation0 *#ere #a! been !i$nificant pro$re!! in locatin$ !taff member! 2and fundin$3 ;it#in re!ident mi!!ion!0 7alf of t#e !taff member! in %&' re$ional
CK

% bac6$round anal !i! of %&' con!ultant utiliGation data" conducted b IE& a! part of t#e 2012 6no;led$e evaluation" !#o;ed t#at %&'(! annual procurement of con!ultant! 2b per!on-mont#" for all cate$orie! of con!ultant3 increa!ed b D4I durin$ 2002=20110

44
*#e increa!e in !taff at t#e re!ident mi!!ion! #a! not been accompanied b a corre!pondin$ tran!fer of re!pon!ibilitie! and aut#orit

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


department! are no; ba!ed ;it#in re!ident mi!!ion!" ;it# benefit! t#at include increa!ed client contact and countr 6no;led$e0 *#i! i! all pro$re!!0 %t t#e !ame time" problem! remain ;it# t#e t pe of decentraliGation and devolution pur!ued0 *#e increa!e in !taff number! at t#e re!ident mi!!ion! #a! not been accompanied b a corre!pondin$ tran!fer of re!pon!ibilitie! and deci!ion-ma6in$ aut#orit 0 *#e proportion of t#e portfolio admini!tered b re!ident mi!!ion! #a! in fact declined !ince 200B" droppin$ !teadil from C10@I in 200B to @C02I in 2012 2Fi$ure 1@30CB *#e proportion of loan!" $rant! and *% pro8ect! admini!tered b re!ident mi!!ion! ro!e to @4I in 200A" and !ub!e<uentl dropped to @0I in 20120CA In t#e !ame period" t#e e>pen!e! at re!ident mi!!ion! #ave increa!ed b DAI0 Fi$ure 1@: 9ortfolio %dmini!tered b 7ead<uarter! 7ead<uarter! and Re!ident )i!!ion

K0 D0 C0 40 @0 20 10 0

D0
C10@ 4K0@ C001 400A 4D04 1B02 K0A B0B 110C 100A 140B 140B 2100 2A0@ 2002 @B0B

C0
@C02

9ortfolio 2- billion3

@0 20 10 0
2012

200K

200B

200A

Fear

2010

2011

7? 9ortfolio

R) 9ortfolio

R)J%&' *otal 2I3

%&' L %!ian &evelopment 'an6" 7? L #ead<uarter!" R) L re!ident mi!!ion0 Source: Independent Evaluation &epartment0 201@0 Corporate Evaluation Stud : &ecentraliGationH9ro$re!! and +perational 9erformance0 )anila0

Empo;erin$ re!ident mi!!ion! ;it# $reater tec#nical capacit and aut#orit ;ould move %&' to t#e ne>t p#a!e of decentraliGation

1@K0 *#e ob8ective of increa!in$ re!pon!ivene!! b locatin$ countr director!Hand more recentl deput countr director!Hin re!ident mi!!ion! i! undermined b t#e limited dele$ation of operational re!pon!ibilit and deci!ion-ma6in$ aut#orit from re$ional department #ead! to countr director!0 Empo;erin$ re!ident mi!!ion! ;it# $reater tec#nical capacit to underta6e core bu!ine!! activitie!" operational re!pon!ibilitie!" and deci!ion-ma6in$ aut#orit ;ould move %&' to t#e ne>t p#a!e of decentraliGation0 Increa!in$ *% bud$et under t#e di!cretion of Countr &irector! ;ould #elp0 %n important area ;#ere t#e role of re!ident mi!!ion! can be en#anced i! in 6no;led$e mana$ement" in particular t#e identification of countr 6no;led$e need! and potential 6no;led$e !ource! 2local t#in6 tan6!" non$overnment or$aniGation!3" and in 6no;led$e tran!fer and !#arin$ ;it#in and acro!! countrie!0 % differentiated approac# to dele$ation of re!pon!ibilitie! i! needed" ba!ed on t#e !pecific development conte>t!" demand!" and prioritie! of lo;-income countrie!" fra$ile and conflict-affected

CB

CA

From Nune 200A ;#en Central and 4e!t Re$ional &epartment 2C4R&3 introduced t#e 8oint-venture approac#" it! portfolio data are reported a! #ead<uarter!-admini!tered0 Corrected for t#i! c#an$e" t#ere ;ould be a !mall increa!e in t#e re!ident mi!!ion portfolio of C4R&0 7o;ever t#i! ;ould be !mall and t#e overall trend of t#e $rap# ;ould not c#an$e becau!e t#e increa!e in C4R& portfolio con!tituted a !mall part 2le!! t#an CI3 of t#e total %&' portfolio0 IE&0 201@0 Corporate Evaluation Stud : &ecentraliGation: 9ro$re!! and +perational 9erformance0 )anila: %&'0

9ercent

2101

40

,arnessing Resources %or Better -utco es 45


!ituation! 2FC%S3" and )IC!0 *#i! ;ould be #elped b increa!ed *% bud$et! t#at can be allocated at t#e di!cretion of t#e countr director!0 1@B0 Finall " for decentraliGation to be effective" t#e co!t! and benefit! need to be better <uantified and monitored0 %n e>pandin$ re!ident mi!!ion net;or6 #a! added !i$nificantl to t#e bud$et0 Re!ident mi!!ion! no; account for 1K0DI of t#e or$aniGation(! total bud$et 2footnote CA3" and over #alf of t#e operational bud$et devoted to portfolio mana$ement" pro8ect proce!!in$" and countr and re$ional !trate$ and pro$rammin$0D0 'ut t#e co!t-effectivene!! and net benefit! of decentraliGation #ave et to be a!!e!!ed" in part becau!e of t#e lac6 of a time recordin$ ! !tem0 It i! time to ! !tematicall trac6 co!t! and benefit! of re!ource allocation to and empo;erment of re!ident mi!!ion!0

*#e co!tco!teffectivene!! and net benefit! of decentraliGation decentraliGation #ave et to be a!!e!!ed

'0

Countr 9ro$ram! and Selectivit

1@A0 Selectivit ;a! a drivin$ principle in t#e de!i$n of Strate$ 2020" and t#e re!ultin$ prioritiGation of core operational area! ;a! lar$el ba!ed on t#e ar$ument t#at %&' !#ould focu! on ;#at it doe! be!t0 *#i! ;a! captured in t#e operational $oal t#at five core operational area! ;ould compri!e B0I of total approval! b 20120 *#e actual di!tribution over 200A=2012 amounted to a cro;din$ out of mo!t area! of operation! ot#er t#an infra!tructure0 Independent Evaluation #a! maintained t#at countr pro$ram! ou$#t to be countr -driven 2i0e0" t#e could opt to mainl pur!ue ot#er intervention!" complementin$ corporate core area! of operation!30 *#e B0I tar$et i! a corporate tar$et t#at doe! not need to be applied ri$idl acro!! all countrie!0 4#ile infra!tructure #a! al;a ! been a main tar$et of %&' operation!" Independent Evaluation #a! ar$ued t#at t#e concentration of operation! in t#i! area ma need to be complemented b ot#er operation! to ac#ieve broader development outcome!0D1 For e>ample" t#e pur!uit of additional mea!ure! or operation! to reac# t#e poor t#rou$# cro!!-!ector outcome! ma increa!e inclu!ivene!! and #elp #uman development0 1400 Furt#er" !electivit need! to favor area! ;#ere private mar6et! and t#e private !ector ;ill not focu!0 %l!o" a! reco$niGed in Strate$ 2020" partner!#ip! are a 6e complement to !electivit in operation!0 %rea! t#at receive le!! operational focu!" but ;#ic# are nonet#ele!! critical for development outcome!" mu!t receive additional effort! from %&' to cro;d-in ot#er partner!0 Counter to t#e e>pectation! !et fort# in Strate$ 2020" t#e recent )&G evaluation found t#at partner!#ip! in #ealt#" education" and $ender #ave not blo!!omed a! anticipated 2footnote 1@30 *#i! i!!ue i! al!o #i$#li$#ted in IE&(! 2012 %nnual Evaluation Revie; 2%ER3" ;#ic# !tate! t#at t#e de$ree to ;#ic# !trate$ic alliance! and partner!#ip! #ave been built #a! been mi>ed0D2 %&'(! !elective en$a$ement at t#e countr level" a! captured in C9S" ou$#t to be driven b a countr (! de!ired development outcome!" includin$ 6no;led$e need!" and b partner!#ip opportunitie!0

9artner!#ip! in #ealt#" education" and $ender #ave not blo!!omed a! anticipated

D0 D1

'a!ed on anal !i! of bud$et data for 20120 IE&0 201@0 %nnual Evaluation Revie;0 )anila: %&'0 D2 IE&0 20120 %nnual Evaluation Revie;0 )anila: %&'0

46

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


'o> K: Reorientin$ *eam and +r$aniGational Culture %&'(! development effectivene!! re!ult! from it! abilit to deliver value and !olution! t#rou$# it! countr and re$ional pro$ram!Hand it! con!tituent lendin$ and 6no;led$e activitie!0 %&' team! t#at ;or6 directl ;it# client! and partner! lie at t#e core of t#i! model of value deliver 0 *#u!" team compo!ition" leader!#ip" incentive! and t#e overall or$aniGational culture fundamentall influence %&'(! performance and development effectivene!!0 *o improve it! performance" %&' need! to re-orient it! !taff" team!" and or$aniGational culture to;ard! ac#ievin$ e>cellence0 *#ree ;a ! to do t#i! can be con!idered0 Fir!t" !tron$er incentive!" reco$nition" and re;ard! can be placed on t#e deliver of !ucce!!ful 2and #i$#l !ucce!!ful3 pro8ect! and t#e ac#ievement of development outcome!0 *#i! contra!t! ;it# ;#at i! ;idel perceived to be an or$aniGational culture t#at incentiviGe! !taff to focu! on pro8ect approval! and deliver of output!" ;it# ;ea6 accountabilit for re!ult!0 It i! e!!ential t#at %&' more inten!el focu! it! ener$ " attention" and incentive ! !tem! on ac#ievin$ outcome! in pro8ect! and countr pro$ram!0 Staff" team!" and mana$er! need to be #eld more accountable for re!ult!H po!itive or ne$ative0 Second" far more attention !#ould be $iven to !tren$t#enin$ pro8ect mana$ement0 Stron$er !upport and !upervi!ion durin$ pro8ect implementation i! critical in !#apin$ pro8ect outcome!0 *#e lac6 of continuit in pro8ect leader!#ip" ;it# t#e avera$e tenure of a pro8ect mana$er a! lo; a! 10B ear!" ;arrant! $reater !crutin from mana$ement0 %llocation and t#e u!e of !ufficient fund! and time for !upervi!ion durin$ implementation i! t#e !econd-mo!t important rea!on 2after ;ea6 local capacit 3 t#at e>plain! ;# pro8ect! are rated le!! t#an !ucce!!ful0 *#e 2012 %nnual Evaluation Revie;a noted t#at over one-t#ird of 9CR! completed in 2011 and 2010 cited !upervi!ion problem!0 *#i! i! a lon$!tandin$ problem" and %&' )ana$ement i! ;ell overdue in ta6in$ tan$ible !tep! to addre!! it0 Finall " furt#er !tren$t#enin$ %&'(! 6no;led$e orientation and embeddin$ $ood 6no;led$e mana$ement practice! into operation! are crucial for t#e future relevance of %&'0 For t#i!" tacit 6no;led$e embedded in pro8ect! need! to be better di!!eminated to !taff and client!0 %&' team! need improved acce!! to t#e be!t of %&' 6no;led$e" and t#e be!t practice! of development partner! and t#e $lobal communit E pro8ect team! al!o need to !tren$t#en t#eir contribution! to %&' 6no;led$e and or$aniGational learnin$0
%&' L %!ian &evelopment 'an6" 9CR L pro8ect completion report0 a IE&0 20120 %nnual Evaluation Revie;0 )anila: %&'0 Source: Independent Evaluation &epartment

4#ile t#ere C0 9ro$ram" 9ro8ect" 9ro8ect" and %&' 9erformance #ave been operational 1410 4#ile t#ere #ave been a number of operational improvement!" performance in improvement!" deliverin$ pro8ect outcome! remained !ta$nant durin$ 1AAB=2012" ;it# DCI of pro8ect! rated effective or #i$#l effective0 9erformance #a! been mo!t di!parate in performance in lo;er )IC!" ;it# !ome countrie! performin$ far belo; avera$e0 9ro8ect! in FC%S deliverin$ 2!everal are )IC!3 #ave fared ;or!e on a$$re$ate" ;it# onl 41I rated !ucce!!ful in outcome! t#e 2000!" a !mall improvement from @BI in t#e 1AA0!0 Importantl " acro!! all remained borro;in$ countrie!" t#e criteria mo!t relevant to impactHdevelopment outcome! and !ta$nant

,arnessing Resources %or Better -utco es 47


!u!tainabilit Hare con!i!tentl rated t#e lo;e!t in mo!t evaluation!0 *#e 2011 evaluation on )ana$in$ for &evelopment Re!ult! al!o identified a di!connect bet;een t#e deliver of output! and t#e ac#ievement of outcome!0D@ *#i! findin$ ;a! later !upplemented b evaluation! t#at called for more complementarit bet;een output! of different t pe! to arrive at a po!itive development outcome0 1420 *#e 201@ %ER found t#at t#e !ucce!! rate of !overei$n operation! #a! remained !ta$nant over t#e ear!" !tandin$ at DKI in t#e 2000! 2footnote D13" !imilar to ;#at ;a! recorded in t#e 1AA0!0 Even in !ector! and countrie! ;#ere overall !ucce!! ratin$! are relativel $ood" t#ere can be particular !u!tainabilit i!!ue!0 In t#e operation! evaluated b IE& in pro8ect performance evaluation report! and pro8ect completion report 29CR3 validation" onl 4AI of operation! are bot# effective and !u!tainable" ;#ile 2KI are li6el to be neit#er !u!tainable nor effective 2Fi$ure 1430 Fi$ure 14: Su!tainabilit and Effectivene!! Ratin$!

Even in !ector! and countrie! countrie! ;#ere overall !ucce!! ratin$! are $ood" t#ere can be particular !u!tainabilit i!!ue!

Note:

*#e four upper ri$#t <uadrant! indicate t#e percenta$e of operation! t#at pa!! t#e t#re!#old for effectivene!! and !u!tainabilit E t#e !um of t#e percenta$e! i! 4AI but appear! a! C0I due to roundin$0 Source: Independent Evaluation &epartment 2IE&3 &ataba!eE and IE&0 201@0 %nnual Evaluation Revie; 201@0 )anila: %!ian &evelopment 'an60

14@0 9ro$ram and pro8ect performance i! lar$el dependent on $ood pro8ect de!i$n b %&' and client!" $ood pro8ect implementation b client!" and $ood !upervi!ion b %&'0 +peration! department! #ave a lon$ ;a to $o in t#i! re$ard0 *#e 2010 &evelopment Effectivene!! Revie; reported t#at 2AI of 9CR! completed in 200B=2010 indicated pro8ect implementation problem!E 24I indicated pro8ect !upervi!ion i!!ue!
D@

9erformance i! dependent on pro8ect de!i$n" implementation" and !upervi!ion

IE&0 20110 Special Evaluation Stud : )ana$in$ for &evelopment Re!ult!0 )anila: %&'0

48
%&' bu!ine!! proce!!e! ma #ave been compre!!ed too muc# after !treamlinin$ in 2010

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


2!taff turnover" in!ufficient field mi!!ion! and !o on3E and 21I indicated pro8ect de!i$n i!!ue!0D4 *#e 2012 %ER found t#at @KI of 2011 and 2010 9CR! #ad noted pro8ect !upervi!ion i!!ue! 2footnote D230 9roblem! al!o per!i!t in pro8ect de!i$n0 %&'(! 2012 ?%E a!!e!!ment rated ?%E lo;er t#an in t#e 2010 e>erci!e" ;it# a mean !core of 20A 2on a !cale of 1 to 43" compared to t#e t#re!#old of 20K0 %! in ot#er a!!e!!ment!" t#e ratin$! ;ere lo;e!t for development outcome! and impact!" a! ;ell a! ac#ievabilit and !u!tainabilit 0 %t t#e countr level" %&' performance ;a! found to be le!! t#an !ucce!!ful in C of t#e 10 countr a!!i!tance pro$ram evaluation! and C9S validation! completed bet;een 2010 and 201@0DC IE& al!o receive! a ;orr in$ number of concern! rai!ed b !taff in operation! re$ardin$ t#e !#ortne!! of t#e mandated 1- ear duration pro8ect proce!!in$ p#a!e" !u$$e!tin$ t#at %&' bu!ine!! proce!!e! ma #ave been compre!!ed too muc# after t#eir !treamlinin$ in 20100 1440 *#e comple>it of t#e c#allen$e! facin$ t#e re$ion ;ill place a premium on innovation and ri!6 ta6in$0 % crucial <ue!tion for %&' i! #o; it can encoura$e innovation and ne; !olution! rat#er t#an re;ard t#e continuation of previou! practice! and pro8ect!" even if t#o!e #ad $ood pro8ect ratin$!0 In all of t#i!" Independent Evaluation #a! a 6e role to pla " bot# in en!urin$ ri$or and encoura$in$ improved outcome!0 It ;ould be ;ort#;#ile for evaluative approac#e! to be continuall updated and improved to enable Independent Evaluation to better !upport t#e !trate$ic a$enda0 9ro8ect ratin$! mu!t reflect d namic condition! and encoura$e t#e initiation of ne; and promi!in$ approac#e!0

&0

Recommendation!

14C0 Strate$ 2020 called for in!titutional tran!formation to rai!e %&'(! performance" effectivene!!" and impact!0 4#ile !ome or$aniGational reform! #ave been underta6en !ince 200B" t#i! remain! an unfini!#ed" and in !ome re!pect! unclear" a$enda0 Nevert#ele!!" t#e re$ion and it! development c#allen$e! are rapidl c#an$in$0 *o 6eep up ;it# t#i! c#an$e and to ma6e a more con!e<uential contribution" %&' it!elf mu!t continue to c#an$e0 'u!ine!! a! u!ual i! not an option0 Si$nificantl increa!in$ t#e proportion of !ucce!!ful pro8ect! and pro$ram!" and improvin$ deliver on outcome!" re<uire! furt#er in!titutional and bu!ine!! proce!! reform!0

%&'(! !elective en$a$ement at t#e countr level need! to be driven b a countr (! de!ired outcome!" rat#er t#an uniform corporate tar$et!

14D0 *o improve t#e relevance" re!pon!ivene!!" and re!ult! of %&'(! operation! it! !elective en$a$ement at t#e countr level need! to be driven b a countr (! de!ired development outcome!" includin$ 6no;led$e need!" and b opportunitie! for partner!#ip!" rat#er t#an uniform corporate tar$et! t#at are !et b %&' on a re$ional ba!i!0 %n important !tep ;ould be to move be ond focu!in$ on individual pro8ect! de!i$ned and implemented b a !in$le divi!ion" and move to;ard co#erent countr pro$ram! t#at ta6e advanta$e of lin6a$e! and ! ner$ acro!! !ector and t#ematic intervention!" ;it# $reater emp#a!i! on t#e de!ired outcome! envi!a$ed under t#e t#ree Strate$ 2020 a$enda!0 In li$#t of t#e above" Independent Evaluation recommend! t#at %&' recon!ider t#e need for an B0I corporate tar$et for core area! of operation!0 14K0 Staffin$ and !tructure need more careful attention0 It i! imperative t#at %&' maintain a critical ma!! of !6ill! in 6e operational area! and department!" and addre!!
D4 DC

%&'0 20100 &evelopment Effectivene!! Revie;0 )anila0 IE&0 201@0 %nnual Evaluation Revie;0 )anila: %&'E and !ub!e<uent countr evaluation!0

a!!i!tance pro$ram

,arnessing Resources %or Better -utco es 49


t#e current fra$mentation of !6ill!0 4#ile infra!tructure remain! a clear priorit " it ;ould #elp %&'(! effectivene!! to develop ne; competencie! in ot#er relevant area!0 %&' need! to adopt a more d namic per!pective to #uman re!ource mana$ement" en!ure t#at it emplo ! appropriate talent" and matc#e! po!ition! and people in a ;a t#at deliver! better re!ult!0 % revie; of t#e in!titution(! !tructure and !taff di!tribution ;ould be timel to addre!! t#e!e i!!ue! and en!ure t#at t#e or$aniGation function! !uc# t#at t#e ;#ole e>ceed! t#e !um of it! part!0 14B0 9ro8ect! are t#e e!!ential in!trument! b ;#ic# %&' contribute! to development0 *#e in!titution mu!t ma6e ever effort to ac#ieve t#e lon$-!tandin$ $oal of B0I !ucce!!ful pro8ect!0 *#e $reate!t effort needed i! on t#e criteria t#at are mo!t relevant to impact: outcome! and !u!tainabilit 0 Evaluation! at countr and !ector level! !u$$e!t a number of action! to improve t#e lin6 bet;een output! and outcome!: reali!tic a!!e!!ment of in!titutional capacit " ri$orou! anal !i! of t#e lin6a$e! at de!i$n !ta$e" active mana$ement of t#e nece!!ar complementar activitie! durin$ implementation" better monitorin$ of output!" and better monitorin$ and mea!urement of emer$in$ outcome!0DD 14A0 %&'(! o;n performance in en!urin$ better ?%E and improved implementation !upport i! 6e 0 Improvin$ it! performance ;ill re<uire %&' to deplo it! !6ill! and 6no;led$e in !tron$ team! t#at ;or6 ;it# client! t#rou$#out t#e pro8ect c cle" from pro8ect proce!!in$ to pro8ect !upervi!ion0 *eam! mu!t remain ;it# pro8ect!" !#are and build 6no;led$e alon$ t#e ;a " and be accountable for outcome!0 1C00 *#e in!titution can do more to capture t#e potential $ain! of decentraliGation0 Fir!t" t#e decentraliGation model need! to be driven and differentiated b t#e !pecific! of t#e countr pro$ram0 IE& recommend! t#at re$ional department! ta6e a differentiated approac# to decentraliGin$ operation! to meet t#e diver!e re$ional development conte>t!" demand!" and prioritie! of lo;-income countrie!" FC%S" and )IC!0 Second" empo;erin$ countr director! b dele$atin$ $reater operational aut#orit Hand accountabilit for re!ult!H!#ould be a priorit " particularl in countrie! ;it# lar$e pro$ram!0 *#ird" effective u!e of t#e tec#nical and local 6no;led$e po!!e!!ed b national !taff i! critical0 Fourt#" re!ident mi!!ion! are ;ell placed to a!!e!! t#e demand for 6no;led$e !ervice!" to identif local !ource! of 6no;led$e" and to pla a more active role in 6no;led$e !#arin$ and interaction0 Finall " t#e net benefit! of decentraliGation need to be better <uantifiedE one ;a to facilitate t#i! i! t#rou$# a time recordin$ ! !tem0 1C10 *o deliver on it! $reat promi!e" %&' need! to #arne!! all it! re!ource!Hacro!! #ead<uarter! and re!ident mi!!ion!" public and private !ector!" countr ;or6 and t#ematic ;or6" and international and national !taff0 %&' leader!#ip mu!t drive and !erve a! role model! in embeddin$ c#an$e! in t#e or$aniGation(! culture" includin$: 2i3 accountabilit for outcome! rat#er t#an output!E 2ii3 team deliver E 2iii3 collaboration acro!! boundarie!E 2iv3 active partner!#ip! t#at build ! ner$ie!E 2v3 under!tandin$ 6no;led$e demand" $eneratin$ #i$# <ualit 6no;led$e" and !#arin$ it for effective u!eE and 2vi3 balancin$ innovation ;it# ri!60 )uc# of t#i! ;ould need to be reflected in performance evaluation" reco$nition and re;ard ! !tem!0 Independent Evaluation !#ould contribute b improvin$ it! contribution to or$aniGational learnin$" and encoura$in$ innovation and initiation of ne; and promi!in$ approac#e!0

Evaluation! at countr and !ector level! !u$$e!t a number of action! to improve t#e lin6 bet;een output! and outcome!

*o deliver on it! $reat promi!e" %&' need! to #arne!! all it! re!ource!

DD

IE&0 20110 Special Evaluation Stud : %!ian &evelopment Fund +peration!0 )anila: %&'0

%ppendi>e!

%99EN&IR 1: %&'(S E1+:1ING S*R%*EGIC :%N&SC%9E


Strate$ic" t#ematic" and operational prioritie! a! articulated in #i$#-level %&' corporate !trate$ie! from 1AAA to pre!ent
9rioritie! Strate$ic 9illar!" 9rioritie!" %$enda! 9RS 21AAA3 @ Element!J9illar! 9ro-poor Su!tainable Economic Gro;t# Social &evelopment Good Governance :*SF and )*S I 220013 @ Core Strate$ic %rea! Su!tainable Economic Gro;t# Inclu!ive Social &evelopment Governance for Effective 9olicie! and In!titution! En#anced 9RS 220043 @ Strate$ic 9illar! 9ro-poor Su!tainable Economic Gro;t# Inclu!ive Social &evelopment Good Governance )*S II 2200D3 C Strate$ic 9rioritie! Catal Gin$ Inve!tment Stren$t#enin$ Inclu!ivene!! 9romotin$ Re$ional Cooperation and Inte$ration )ana$in$ t#e Environment Improvin$ Governance and 9reventin$ Corruption 2none !pecified3 Strate$ 2020 2200B3 @ Strate$ic %$enda! Inclu!ive Gro;t# Environmentall Su!tainable Gro;t# Re$ional Inte$ration

Cro!!Cro!!-Cuttin$ *#eme!" 9rioritie!" &river!

4 9rioritie! Good Governance 9rivate Sector Gender 2;omen3 Environmental Su!tainabilit @ Sector 9rioritie! %$riculture and Rural &evelopment Social Sector! Infra!tructure and Finance

@ Strate$ic *#eme! 9rivate Sector &evelopment Re$ional Cooperation and Inte$ration Environmental Su!tainabilit 2none !pecified3

Sector" +perational 9rioritie!

C *#ematic 9rioritie! Gender E<ualit Environmental Su!tainabilit 9rivate Sector &evelopment Re$ional Cooperation &evelopment Capacit 2none !pecified3

C &river! of C#an$e 9rivate Sector &evelopment Good Governance Gender E<uit 5no;led$e Solution! 9artner!#ip! C Core +perational %rea! Infra!tructure Environment Re$ional Cooperation and Inte$ration Finance Sector Education +t#er area! 7ealt# %$riculture &i!a!ter and Emer$enc %!!i!tance

D 9riorit Sector! 2Group 13 Road *ran!port Ener$ /rban Infra!tructure Rural Infra!tructure Education Finance Sector

%&' L %!ian &evelopment 'an6" :*SF L :on$-*erm Strate$ic Frame;or6" )*S L medium-term !trate$ie!" 9RS L 9overt Reduction Strate$ 0 Source: %&' !trate$ document!0

%99EN&IR 2: )%N+R %&' 9+:ICIES" 9:%NS" %N& G/I&E:INES %&+9*E& 'EGINNING IN 200B
Strate$ 2020 SectorJ*#emeJ%rea @ Strate$ic %$enda! Inclu!ive Gro;t# Environmentall Su!tainable Gro;t# Re$ional Inte$ration C &river! of C#an$e 9S& and 9S+ Good Governance and Capacit &evelopment Fear: *itle 201@: Guideline! on Inclu!ive Economic Gro;t# in t#e C9S 2!ee Environment belo;3 2!ee RCI belo;3

2012: 9ublic=9rivate 9artner!#ip +perational 9lan 2012=2020 2012: Re!ult!-'a!ed 9ublic Sector )ana$ement: % Rapid %!!e!!ment Guide 2012: Inte$rit 9rinciple! and Guideline! 2011: 9ractical Guide to Capacit &evelopment in a Sector Conte>t 2011: Revi!ed Guideline! for Implementin$ G%C%9 II 2010: Revi!ed Capacit &evelopment %ction 9lan 200B: Guideline! for Implementin$ G%C%9 II Gender E<uit 201@: Gender E<ualit and 4omenP! Empo;erment0 +perational 9lan 2201@= 20203 2012: Guideline! for Gender )ain!treamin$ Cate$orie! of %&' 9ro8ect! 5no;led$e Solution! 201@: 5no;led$e )ana$ement &irection! and %ction 9lan 2201@=201C3: Supportin$ Finance QQ 200A: 5no;led$e )ana$ement %ction 9lan 2200A=20113 9artner!#ip!a 200A: Cooperation %rran$ement! for &evelopment 9artner!#ip! C Core +perational +perational %rea! 2plu! @ ot#er!3 Infra!tructure 201@: Guideline! for Climate 9roofin$ Inve!tment in t#e Ener$ Sector 2tran!port" ener$ " 201@: /rban +perational 9lan 2012=2020 urban" ;ater and 2012: Implementation of Su!tainable *ran!port Initiative: )ain!treamin$ !anitation" ot#er!3 Road Safet in %&' +peration! %ction 9lan 2011: 4ater +perational 9lan 2011=2020 2011: Guideline! for Climate 9roofin$ Inve!tment in *ran!port Sector: Road Infra!tructure 2010: Su!tainable *ran!port Initiative 200A: Ener$ 9olic Environment 201@: Environment +perational &irection! 201@=2020 2010: %ddre!!in$ Climate C#an$e in %!iaJ9acific: 9rioritie! for %ction 200A: Safe$uard 9olic Statement Re$ional Cooperation 2012: % Strate$ic Frame;or6 for t#e C%REC 9ro$ram 2011=2020 and Inte$rationb 2012: G)S Re$ional Inve!tment Frame;or6 201@=201Kc 2011: G)S Economic Cooperation 9ro$ram Strate$ic Frame;or6 22012=20223 2011: Re$ional Cooperation Strate$ : Sout# %!ia 2011=201C 200A: %&'(! 9acific %pproac# 2010=2014 Finance Sector &evelop 2011: Financial Sector +perational 9lan Education 2010: Education b 2020H% Sector +peration! 9lan 200B: Education and S6ill!: Strate$ie! for %ccelerated &evelopment +t#er! 2014: Inte$rated &i!a!ter Ri!6 )ana$ement +perational 9lan 2in preparation3 2#ealt#" a$riculture" 201@: +perational 9lan for %NR Sector: 9romotin$ Food Securit in %!ia and di!a!ter and emer$enc t#e 9acific 2014=2020 2in preparation3 a!!i!tance3 201@: Social 9rotection +perational 9lan 201@=2020 2&raft3

Ma.or ADB (olicies, (lans, and )uidelines Ado"ted Beginning in 200/


2012: Guideline! for Climate 9roofin$ Inve!tment in %$riculture" Rural &evelopment" Food Securit 2011: Strate$ic &irection! 9aper on 7I1J%I&S 2011=201C 200A: +perational 9lan for Su!tainable Food Securit 200B: %ction 9lan for Implementin$ %&' &i!a!ter and Emer$enc %!!i!t0 9olic 200B: 9o!itionin$ %&' &i!a!terJEmer$enc %!!i!tance 9olic in C#an$in$ Re$ional Environment 200B: +perational 9lan for Improvin$ 7ealt# %cce!! and +utcome! under S2020 )ember Countr Groupin$! Graduated &)C!" )IC!" 201@: +perational 9lan for En#ancin$ %&'P! Effectivene!! in FC%S :IC!" FC%S In!titutionalJ+r$aniGational *ran!formation 201@: %&' Revi!ed Re!ult! Frame;or6 201@=201D 201@: Information S !tem! and *ec#nolo$ Strate$ III 2012: %ccountabilit )ec#ani!m 9olic 2011: 9ublic Communication! 9olic 2011: +ur 9eople Strate$ 2010: Streamlined 'u!ine!! 9roce!!e! 200A: Revi!ed 9ro8ect Cla!!ification S !tem 200A: %&' %ction 9lan on )ana$in$ for &evelopment Re!ult! 200A=2011 200B: %&F Re!ult! Frame;or6

53

%&' L %!ian &evelopment 'an6" %&F L %!ian &evelopment Fund" %NR L a$riculture and natural re!ource!" C%REC L Central %!ia Re$ional Economic Cooperation" C9S L countr partner!#ip !trate$ " &)C L developin$ member countrie!" G%C%9 II L Second Governance and %nticorruption %ction 9lan" G)S L Greater )e6on$ Subre$ion" FC%S L fra$ile and conflict-affected !ituation!" :IC L lo; income countr " )IC L middle income countr " 9S& L private !ector development" 9S+ L private !ector operation" RCI L re$ional cooperation and inte$ration0 Note: *#i! table e>clude! !tudie!" mo!t $uide!J$uidance note!" polic paper!" !taff in!truction!" and +peration! )anual revi!ion!Jaddition!0 a *#e %&' Strate$ and 9olic &epartment li!t! a total of @@ partner!#ip a$reement! of variou! form! 2letter! of intent" memoranda of under!tandin$" partner!#ip frame;or6!" etc03 dated Nanuar 200B to +ctober 20120 b E>clude! numerou! re$ional and !ubre$ional cooperation !trate$ie!" pro$ram! and operation! bu!ine!! plan!0 c *#e frame;or6 cover! labor mi$ration" urban development" ener$ " and tran!port and related !ervice!0 Source: Independent Evaluation &epartment0

%99EN&IR @: S/))%RF +F )ESS%GES FR+) ER*ERN%: S*%5E7+:&ERS


Independent Evaluation &epartment ob!ervation! from re$ional )id-*erm Revie; con!ultation! #eld in Cambodia" Fi8i" India" 5 r$ G Republic" and t#e 9#ilippine!" or$aniGed b Strate$ 2020 a$enda!" operational focu!" and in!titutional effectivene!!0 %0 *#ree Strate$ic %$enda! 2i3 Stren$t#en pur!uit of t#e t#ree !trate$ic a$enda! t#rou$# a more balanced operational focu!" improved in!titutional effectivene!!" and a muc# !tron$er focu! on outcome!E povert reduction and inclu!ivene!! !#ould remain at t#e center of t#e !trate$ic and operational focu! of t#e %!ian &evelopment 'an6 2%&'3E promote inclu!ivene!! more effectivel b broadenin$ t#e portfolio and refocu!in$ on t#e poor and vulnerable and mar$inaliGed re$ion!E increa!e !upport for environmental !u!tainabilit and #elp developin$ member countrie! addre!! and adapt to t#e $ro;in$ climate c#allen$eE and continue to emp#a!iGe re$ional cooperation and inte$ration and e>pand t#i! ;or6 into more area!0

2ii3 2iii3 2iv3

'0

+perational Focu! 2i3 2ii3 2iii3 2iv3 )aintain an emp#a!i! on infra!tructure but improve it! !trate$ic impact! t#rou$# $reater inclu!ivene!! and !u!tainabilit E re!pond better to uni<ue c#allen$e! facin$ middle-income countrie! and fra$ile and conflict-affected !tate! t#rou$# better dia$no!tic!" 6no;led$e ;or6" and coordinationE refocu! on en#ancin$ $overnance t#rou$# lon$-term !upport for public !ector mana$ement and capacit development" in particular at t#e !ector levelE improve t#e inclu!ivene!! and !u!tainabilit impact! of private !ector operation! t#rou$# !tron$er en$a$ement" better 6no;led$e ;or6" and $reater effort! in frontier countrie! and re$ion!E and adopt a more countr -centric approac# to !electivit and a more ver!atile portfolio to improve re!pon!ivene!!0

2v3

C0

In!titutional Effectivene!! 2i3 Empo;er re!ident mi!!ion! t#rou$# a $reater dele$ation of portfolio aut#orit t#at ;ill allo; re!ident mi!!ion! to better !erve client $overnment! and more effectivel en$a$e ;it# development partner!E increa!e t#e impact of t#e %&' 6no;led$e ;or6 t#rou$# a !#arper focu! on countr 6no;led$e need!" better coordination" and $reater focu! on innovation and !#arin$E en!ure %&'(! re!ource ba!e remain! ade<uate t#rou$# better levera$in$ and innovationE improve t#e levera$in$ of partner!#ip! t#rou$# more up!tream dialo$ue" plannin$" and coordination" and t#rou$# !tron$er en$a$ement ;it# civil !ociet E place $reater focu! on #i$#-impact communit -driven pro8ect!" !ector-ba!ed approac#e!" and ac#ievin$ !ector outcome!E ma6e doin$ bu!ine!! ;it# %&' ea!ier t#rou$# continued bu!ine!! proce!! reform!E and in!till a !tron$er focu! on re!ult! and outcome! acro!! t#e in!titution to rai!e %&'(! contribution to development effectivene!!0

2ii3 2iii3 2iv3 2v3 2vi3 2vii3

%99EN&IR 4: S/))%RF +F )ESS%GES FR+) IN*ERN%: S*%5E7+:&ERS


+b!ervation! from internal con!ultation! ;it# member! of 10 2out of 143 %!ian &evelopment 'an6 2%&'3 Communitie! of 9ractice 2Co9!30 10 Focu! and !electivit 0 % prominent concern e>pre!!ed b member! focu!ed on t#e de$ree of !electivit under Strate$ 2020" ;it# !everal member! !tatin$ t#at %&' #a! ta6en !electivit too farH !ometime! at t#e e>pen!e of countr re!pon!ivene!!0 % common ob!ervation ;a! t#at t#e implementation of Strate$ 2020 #ad been muc# more re!trictive t#an called for b t#e !trate$ 0 % related point rai!ed ;a! t#at allocatin$ a portion of t#e portfolio to !elect !ector! ma not al;a ! produce approval!E t#i! can re!ult from variou! factor!" includin$ t#at !ome developin$ member countrie! prefer not to borro; for certain !ector! 2e0$0" education3" or becau!e %&' ma not be en$a$in$ in dialo$ue ;it# countrie! re$ardin$ t#eir need! in certain !ector!0 Several $roup! felt t#at de!ired countr outcome! !#ould #ave $reater ;ei$#t in determinin$ !electivit 0 20 Environmental !u!tainabilit and climate c#an$e0 c#an$e0 Numerou! member! from variou! Co9! 2e0$0" ;ater" tran!port" environment" and ener$ 3 tied t#eir re!pective area! of ;or6 directl to t#e c#allen$e of environmental !u!tainabilit 0 )ember! voiced !tron$ concern! re$ardin$ t#e $ro;in$ t#reat of climate c#an$e and t#e need for a more concerted re!pon!e b countrie! and %&'0 )ember! pointed to !everal area! ;#ere %&' #a! done ;ell in incorporatin$ environmental !u!tainabilit 2e0$0" clean ener$ 3" and #i$#li$#ted ot#er area! ;#ere more can be done 2e0$0" !u!tainable tran!port30 )ember! !tated t#at countr demand for cleaner and ,$reener. ener$ " tran!port" and urbaniGation ;a! on t#e ri!e" ;arrantin$ an ade<uate re!pon!e from %&'" includin$ in t#e form of it! !trate$ic focu!" !taffin$ and e>perti!e" and re!ource!0 Several member! !u$$e!ted t#at !upportin$ t#e environmental !u!tainabilit a$enda more effectivel call! for a broader focu! and recon!ideration of !ome non-core area!" !uc# a! fore!tr and fi!#erie!0 @0 Inclu!ivene!! nclu!ivene!!0 ene!!0 )uc# li6e environmental !u!tainabilit " t#e i!!ue of inclu!ivene!! cut acro!! man of t#e di!cu!!ion! ;it# Co9!0 )ember! felt t#at Strate$ 2020(! prioritiGation of inclu!ive $ro;t# ;a! #i$#l appropriate" and ;ould become even more relevant0 )ember! !u$$e!ted t#at %&' can !upport inclu!ivene!! more effectivel t#rou$# multiple avenue!" includin$ !upport for $ender e<uit " a $reater focu! on non-income ine<ualit " and a !tron$er pu!# for rural development and a$riculture0 %t t#e !ame time" !ome member! ;ere unclear about #o; t#e inclu!ive $ro;t# a$enda ;a! to be implemented0 40 Infra!tructure operation!0 operation!0 *#ere ;a! $eneral a$reement t#at infra!tructure !#ould remain a core bu!ine!! of %&' and t#at 6eepin$ a focu! on infra!tructure #a! !erved %&' ;ell0 Several member! felt t#at %&'(! infra!tructure inve!tment! pa inade<uate attention to inclu!ivene!!0 Some e>pre!!ed t#at even ;it#in infra!tructure t#ere ma be too narro; a focu!" pointin$ to t#e need for $reater focu! on maritime and air tran!port" multi-modal infra!tructure" and tran!port corridor! 2;it# a ma8or unmet need for re$ional infra!tructure30 )ember! al!o emp#a!iGed t#e need to complement inve!tment in infra!tructure ;it# capacit and in!titution buildin$0 C0 Staff !6ill! and or$aniGational de!i$n0 de!i$n0 &e!pite t#e !taff e>pan!ion under Strate$ 2020" member! e>pre!!ed !tron$ concern over !6ill !#orta$e! and $ap! acro!! a number of critical area!" includin$ in core area! of Strate$ 20200 Several Co9! voiced concern over ;#at t#e perceive a! a deprioritiGation and !tead de-!6illin$ of e>perti!e in t#eir re!pective area!0 )ember! e>pre!!ed fear t#at t#i! i! re!ultin$ in %&' no lon$er #avin$ a critical ma!! of e>pert! in !ome important area!" even t#o!e area! ;#ere %&' #a! #ad a lon$!tandin$ operational focu! 2e0$0" ener$ $enerationJdi!tribution30 )ember! li!ted a number of ne; !6ill area! ;#ere t#e al!o felt %&' need! to e>pand" !uc# a! in

56

Inclusion, Resilience, Change: ADB's Strategy 2020 at Mid-Ter


cuttin$-ed$e tran!port and ener$ " trade facilitation" and re$ulator and in!titutional e>perti!e0 % related concern i! #o; !6ill! are !pread out acro!! %&'" ;it# !ome member! de!cribin$ t#e current !ituation a! fra$mented" bot# acro!! and even ;it#in department!0 +ne $roup di!cu!!ed t#e need for !tron$ anc#or! for core !6ill area!0 Several member! indicated t#at %&'(! pool of #ard" tec#nical !6ill! !eemed to be diluted over time b more $eneral e>perti!e0 D0 *eam;or6" innovation" and incentive!0 incentive!0 )ember! felt t#at !ilo! ;it#in %&' compromi!e team;or6 and affect effort! to build inclu!ion into pro8ect!0 )ember! e>pre!!ed a need for $reater reco$nition and re;ard! for team;or6" but ;it# t#e a!!urance t#at not onl team leader! but al!o team member! are $iven due reco$nition and re;ard0 +n 6no;led$e and tec#nical a!!i!tance" member! voiced concern t#at 6no;led$e ;or6 remain! a lo; priorit for operational !taff" in lar$e part due to ;ea6 incentive!0 Furt#ermore" member! commented t#at Strate$ 2020 provide! di!incentive! for innovation0 Several member! !tated t#at t#e or$aniGational culture di!coura$e! ri!6 ta6in$ 2t#e term ri!6 aver!ion ;a! commonl u!ed30 K0 Governance" public mana$ement" and capacit development0 development0 )ember! felt t#at $overnance and capacit development remain fundamental to ac#ievin$ better !ector outcome! and contributin$ to inclu!ive $ro;t#0 Sector a!!e!!ment! and ri!6 a!!e!!ment and mana$ement plan! need to be better inte$rated at t#e dia$no!tic andJor de!i$n !ta$e0 )ember! al!o !u$$e!ted t#at $overnance be captured a! a driver of c#an$e at t#e outcome level" ;it# po!!ible indicator! includin$ co!t-effective !ervice deliver " increa!ed accountabilit " and en#anced citiGen participation0 )ember! of !everal Co9! pointed to countr $overnance and capacit 2e0$0" in environmental mana$ement3 a! fundamental to ac#ievin$ better outcome!" includin$ better re!ult! from %&'-!upported operation!0