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Improving ADB’s Effectiveness
ADB Review [ June 2005 ]

PRC Ministry of Finance: ADB’s challenge is to bring high-profile commitments to the ground level

By Zhu Guangyao
Director General
International Department, Ministry of Finance, People’s Republic of China

In collaboration with its development partners, the Asian Development Bank (ADB) is now committed to enhanced development effectiveness through harmonization, alignment, and managing for development results.

While this is encouraging, the challenge for ADB is to bring these high-profile commitments to the ground level in its developing member countries (DMCs).

Sustainable development can only be achieved when DMCs own and lead the process. In the past, dialogue between ADB and its DMCs, particularly small countries, has sometimes been asymmetric, with ADB preferences and priorities taking precedence over DMC development programs.

Now we have entered an era of equal partnership based on reciprocity and country ownership. As such, DMCs must themselves define the development priorities that underlie a country’s development programs.

ADB’s identification of poverty reduction as its overarching objective in 1999 helped the institution focus its operations in a largely positive direction. However, the priority given to poverty reduction also created certain distortions, especially in identifying the poverty components and impact of specific projects.

The key issue is how to correctly understand poverty reduction. We strongly believe that efforts for poverty reduction should not just be defined as giving financial support to the poor. Poverty reduction efforts should include improving investment climates, and developing infrastructure, as well as strengthening capacity building.

ROAD PROJECT Comprehensive development is the most effective way for developing countries to fight poverty

Comprehensive development is the most effective way for developing countries to fight poverty. ADB should design its strategy in this context.

ADB’s support of participatory processes has allowed the voices of its stakeholders to be heard. However, ADB should also recognize the costs and risks associated with participation, particularly if consultative processes are not properly handled. Concerns include the time taken for this process (it can be time-consuming), the costs involved, and the need to ensure that participation is truly representative of stakeholders. Participation selectivity should be considered.

ADB’s assistance from its ordinary capital resources is important for mobilizing financial resources from the private sector and supporting enabling policy and regulatory environments for the private sector. In other words, ADB’s private sector operations are complementary to what is going on in the private sector rather than a substitute for such activities.

Given the tremendous economic growth in some DMCs, it is important that their best practices be distilled and disseminated widely throughout the region. In this regard, ADB can play an important role, particularly in effectively sharing knowledge with its DMCs. ADB has the potential to serve as a “transmission belt” that facilitates cooperation.

While we believe that measurements, valuation, and monitoring are all important for us to understand the impact of development, due attention should be given to managing for results—doing the right things and doing things right in DMCs. We should first pay more attention on how to achieve greater results, and then on how to measure and report them.

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