MANILA — After a multiyear process and several rounds of stakeholder consultations, the Asian Development Bank today published its much-anticipated strategic plan through 2030.
The document highlights the bank’s operational priorities and planned actions to meet the changing needs of its developing member countries. While a number of ADB’s borrowing members have transitioned to middle-income status in the past decade, poverty and inequality remain challenges for the fast-growing region — which is home to 326 million people living below $1.90 a day, and more than 900 million people living below $3.20 a day, according to ADB data.
In recognition of an “unfinished poverty agenda” in the region, ADB is aligning its strategy with global development agreements and frameworks, including the Sustainable Development Goals, the Paris Agreement on climate change, and the Sendai Framework for Disaster Risk Reduction. Under this new strategy, which is updated from the bank’s 2008 strategy to 2020, ADB aims to achieve a “prosperous, inclusive, resilient, and sustainable Asia and the Pacific.”
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ADB has mentioned or discussed much of the strategy during meetings and conferences over the past few years, including themes such as promotion of advanced technologies, strengthening its role as a knowledge institution, an increasing focus on regional trends such as urbanization and aging, the promotion of better procurement systems, continued expansion of its private sector operations, and increases in climate finance and support for the social sectors.
Yet the strategy provides more detail on what makes these areas important for the bank going forward, and helps mobilize and institutionalize bank support for each of them.
For example, health and social protection, along with quality job generation, education, and training — including lifelong learning and upskilling for middle- and old-aged workers — are considered important elements of the bank’s plan to address poverty and inequality. Historically, the bank’s support for the social sectors has been modest compared to its hard infrastructure spending, but reviews of previous strategies, and other bank performance assessments, emphasized investments in social sectors are necessary and recommended that the bank increase support to meet ADB’s vision for inclusiveness.
“In the previous strategy, Strategy 2020, the health sector was not regarded as a priority sector,” ADB President Takehiko Nakao told Devex in an exclusive interview following the launch of the strategy on Thursday. “But when I visited countries there [were] so many requests — from leaders to ministers — for ADB support in certain areas. In Mongolia, when I visited there in 2013, I had a lot of requests for continued support to women’s health, including hospitals. When I visited Uzbekistan, the president himself mentioned the importance of supporting rural health networks. In Indonesia, we support noncommunicable disease programs like obesity. And in Pacific island countries, because of obesity issues [there].”
The bank is also scaling up support for climate change and environmental sustainability. It plans to have 75 percent of committed operations supporting climate change mitigation and adaptation by 2030, and reach $80 billion in climate finance by the same year. Over the 12-year period covered by Strategy 2030, climate finance should reach approximately $7 billion per year.
The bank also plans to prioritize investments in projects aimed at lowering greenhouse gas emissions, particularly as a means to support developing member countries in meeting their nationally determined contributions under the Paris accord. This is an area developing member countries have specifically requested ADB assistance in during strategy consultations.
ADB clients and stakeholders are watching how ADB will operationalize its plans to scale up environmental sustainability. The ADB Independent Evaluation Department noted in its reviews that while ADB projects tagged as supporting environmentally sustainable growth increased significantly — from less than 10 percent in 2004 to 57 percent in the period 2013-2015 — the extent of projects’ actual environmental benefits varied.
“The operations tagged as ESG [Environmentally Sustainable Growth] in recent years may be more modest in their environmental effects than the simple initial tagging at the approval stage seems to portray,” according to the IED’s 2018 Annual Evaluation Review.
Civil society organizations are among those waiting to see how Strategy 2030 will impact actual operations on the ground in developing Asian countries. In an interview with Devex in May, during the 51st ADB annual meeting, some CSOs raised issues about aspects of the strategy — still a draft at the time — such as the disconnect between the bank’s commitment to the Paris climate agreement versus its lack of commitment to phasing out coal, or its commitment to environmental sustainability, but continued financial support to environmentally damaging geothermal projects in Indonesia.
They were also concerned about the bank’s growing private sector work, which is set to expand further under the new strategy and reach one-third of ADB operations by 2024. The expansion of the bank’s private sector work is seen by the bank as a means to support ADB’s operational priorities. The private sector can mobilize additional resources, including for infrastructure, and contribute to job creation, drive innovation, and address existing market gaps.
Following board approval, the bank will be developing operational plans for the priority areas identified in the strategy “to articulate the strategic focus, specific areas of engagement, approaches, and broad skills requirements.” Drafts of operational plans could be available toward the end of the year, according to ADB President Nakao.
Work on gender
The new strategy aims to build on the bank’s efforts to narrow gender gaps. “Accelerating progress in gender equality” is one of the seven operational areas ADB will focus on, according to the strategy. By 2030, the bank will target mainstreaming gender equality to at least 75 percent of ADB committed operations, as well as target support in five key areas:
1. Women’s economic empowerment, through education and training for employment; and expanding their access to finance and supporting policy and institutional reforms for entrepreneurship opportunities.
2. Gender equality in human development, through specific investments in the social sectors, such as supporting girls in pursuing science and technology courses, engineering and mathematics; and addressing women and girls unmet reproductive health needs.
3. Explore measures that would support women’s participation in decision making and leadership.
4. Reduce women’s “time poverty,” essentially in managing livelihood and domestic work; and considering their safety and mobility in designing urban and rural infrastructure.
5. Build their resilience to external shocks, such as climate change, disasters, economic, and food crises.
The strategy mentions plans to expand the bank’s talent pool and hire experts in new priority areas. It also discusses increasing private sector operations staff in resident missions as it expands its nonsovereign, private sector work in member countries and territories, and in other sectors, such as education and health.
With the finalization of its Strategy 2030 fast approaching, Asian Development Bank staff shouldn’t get too cozy in their respective sectors and departments, according to Tomoyuki Kimura, ADB director general of strategy, policy, and review department.
There was no mention on whether the bank plans to specifically hire more gender specialists as staff or long-term gender consultants, which the IED said is missing in several ADB resident missions. Nakao told Devex that ADB is planning gradual staff increases which will focus on building diversity within the bank and the right skill sets to execute Strategy 2030.
A differentiated approach
The bank plans to geographically expand its private sector operations work to include “challenging markets” such as fragile and conflict-affected states, which will be a particular priority of ADB. Under the new strategy, it plans to prioritize support for the “poorest and most vulnerable countries” in Asia-Pacific.
But ADB’s approach will be different for each group of countries, depending on their level of development and country needs. In fragile and conflict-affected states, the bank plans to focus its support on institutional development and governance reforms, essential infrastructure, social services, and targeted social assistance. It also plans to tailor its processes to the realities on the ground and strengthen collaboration with other development players, including CSOs, to ensure its country strategy and operations are “fragility and conflict sensitive.”
Much of this is likely to extend to ADB developing member countries that are small island developing states. Seven out of the nine ADB developing member countries classified as fragile and conflict-affected states are SIDS. Given their vulnerabilities to climate change and disasters, the bank’s focus on SIDS will also include climate change adaptation, environmental sustainability, and disaster risk management.
For upper-middle-income countries, the bank says it will be “selective,” and look for areas where it can add value.
“The sharing of experiences, best practices, and innovation will be increasingly more important elements of ADB’s engagement with UMICs than its lending volume, especially in critical areas such as regional public goods, climate change, urbanization, RCI [Regional Cooperation and Integration], and emerging social issues such as aging,” according to the strategy.
This is similar to the bank’s current relationship with China, which has raised particular interest from different groups given its level of development and economic growth. This year, China announced the establishment of its own international development cooperation agency, and is currently host to the Asian Infrastructure Investment Bank, which has been touted as competitor to ADB.
“Of course there are differences in views among our membership. Some countries regard some upper-middle-income countries [as not] need[ing] our support,” Nakao said. “But at this point, we still believe that supporting countries like China make sense, because there are still issues [to address including] poverty reduction, income inequalities, climate change and the environment, and so on.”
Watch this space for Devex’s exclusive interview with ADB President Takehiko Nakao on the bank’s Strategy 2030.