ADB may allot 'special' funding to better engage fragile states

Money changers in the streets Afghanistan, one of the fragile and conflict-affected countries in Asia and the Pacific. The Asian Development Bank wants to put more money into helping these countries. Photo by: ADB

The Asian Development Bank plans to inject more money to help fragile and conflict-affected states in the Asia-Pacific region through a “special allotment” of about $3 million per nation.

The money would be added to member countries’ individual allotments — in this case, from the Asian Development Fund, which caters to the region’s poorest nations, according to Patrick Safran, ADB’s focal point for fragile and conflict-affected situations.

“It should be on a grant basis as it is under the ADF coffers,” he told Devex, suggesting that the proposal may be finalized in November during a meeting of ADF donors.

ADB and its multilateral counterparts in Africa and elsewhere have been working with the World Bank and other partners to streamline their work in fragile and conflict-affected states. The World Bank and African Development Bank already have fixed financial allotment for these nations, although last year, ADB became the first multilateral development bank to release an operational plan on how to engage FCA countries, Safran explained.

Currently, more than a dozen countries in the Asia-Pacific region are considered to be fragile or conflict-affected, including Kiribati, the Marshall Islands, Micronesia, Nauru, Palau, Papua New Guinea, Solomon Islands, Tuvalu, Vanuatu, Timor-Leste and Afghanistan.

The $3 million special allotment is one of three options ADB officials are considering to make the bank’s support “less volatile” and to assure these nations that they will have access to a “dependable, meaningful minimum flow of assistance,” Safran said.

In its operational plan published last year, ADB acknowledged the need for a concrete source of funding for FCA nations because they “face added costs” due to instability and capacity gaps. ADB earmarked only about $81 million for the Pacific region for 2007-2011, for instance — an insufficient amount to ensure sustainable development, the bank pointed out.

The two other proposals that are being considered include boosting the capital allotment for all FCA countries in the region through “set-aside” funding, and creating a pool facility to finance institutional capacity-building programs that could potentially involve other development stakeholders, including the private sector, through cofinancing.

Those proposals may be put on hold, though, if the plan pushed by President Takehiko Nakao to merge the bank’s two major funds — one of which is the ADF — is pushed through.

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About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a former Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. He previously covered Philippine and international business and economic news, sports and politics.