The Asian Development Bank finally released on Thursday the much-awaited midterm review of its so-called “Strategy 2020,” the bank’s development blueprint for Asia-Pacific — and the institution’s own role in the region.
In the review, ADB President Takehiko Nakao stressed that the dynamic and rapid changes taking place in the world’s most populous region call for an equal transformation of the bank so it will become more “relevant, responsive, and effective.”
Those reforms and realignments — according to the final document approved by the board of governors — will apply to how the Manila-based institution conducts programs in Asia-Pacific’s evolving development landscape, and address priority challenges like inequality (economic and social opportunities), lack of investment in infrastructure, climate change, and disaster resilience.
ADB will also strive to cope better with other issues, such as the bittersweet transition of many developing member countries to middle-income nation status, even if they still suffer high unemployment, ageing populations and environmental hazards.
So is this move the way to go for the bank, and what are the risks?
For an international development expert, a change in attitude and acknowledgement of what needs to be done reflects ADB’s awareness of how its role has changed over time.
“If ADB does not evolve [in] its approach to development, that ‘D’ in ADB may well come to stand for dinosaur. And we know what happened to the dinosaurs,” Curtis Chin, former U.S. ambassador to the bank, told Devex.
Upgrade needed
Asia-Pacific is at a development cossroads, with many of its economies growing at breakneck speed and health care reach expanding, although this progress is yet to trickle down to the impoverished masses.
In the midterm review, ADB said that eradicating extreme poverty in the region could technically be possible by the mid-2020s based on the poverty threshold of $1.25 a day — but even the bank itself admitted that’s a skewed measure as that threshold “is insufficient for poor populations of developing member countries to even subsist.”
This, according to Chin, should be addressed as a priority along with development effectiveness and within that, the excessive reliance on statistics for monitoring and evaluation.
“Unless ADB can address fundamental problems that plague many development agencies, including outdated human resource systems and a reliance on measuring quantities of assistance and lending levels as a metric for success, it will continue to shrink in importance,” he said.
And it will not be alone, for adapting to the new times is something other multilateral institutions have been doing for some time now.
For instance, just 2 weeks ago the World Bank — which many in the international development community view as constantly setting the pace for ADB in its reform policies — concluded after its annual spring meetings that absorbing new ideas is absolutely crucial to transforming itself and reach its ultimate goal of eradicating extreme poverty by 2030.
10 strategic priorities
Overall, the midterm review concludes that the bank’s ongoing Strategy 2020 “remains valid and relevant in its broad strategic directions to address the development challenges of a transforming Asia-Pacific region” but a significant boost is still needed.
In order to become the region’s development leader, ADB laid out ten strategic priorities that will mainly focus on sharpening and rebalancing the bank’s operations, particularly on strengthening responsiveness to the changing business environment as well as increasing capacity and effectiveness.
The priorities are:
1. Poverty reduction and inclusive economic growth with ADB expanding education operations from 3 percent to 6-10 percent, and health care from 2 percent to 3-5 percent of its annual financial assistance budget, as well as supporting inclusive business, social protection and governance.
2. Environment and climate change under the banner initiative of allowing developing member countries to gain more access to global and regional “green” funds.
3. Regional cooperation and integration with connectivity programs, both hard and soft, including transportation and communication which is also the theme of this year’s ADB Annual Meeting in Astana, Kazakhstan. Part of the support is through policy reforms on trade facilitation and disease prevention.
4. Infrastructure development to address the dire need of the region for as much as $800 billion in investments for much-needed upgrades, annually.
5. Middle-income countries focusing on their changing development needs as they transition from one status to another, including for instance improving their business climate.
6. Private sector engagement to increase to about half of the bank’s entire operations.
7. Knowledge solutions to make ADB not just a lending bank, but a knowledge bank as well. This will include implementing the “One ADB” approach for all departments to work together in providing knowledge solutions.
8. Financial resources and partnerships to bridge Asia-Pacific’s huge development finance gap.
9. Delivering value for money to complement the partnerships approach, so every development dollar yields the maximum positive result for the beneficiaries.
10. Organizing to meet new challenges will provide ADB and its staff to become a “dynamic, agile, and innovative institution” that remains relevant and up to the task in a changing development environment in the region.
What do you think? Is this the right path for the bank, or should the institution adopt different policies to increase its relevance in Asia-Pacific? Please let us know your views by leaving a comment below, joining our LinkedIn discussion or sending us an email to news@devex.com.
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