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New Development Partnership
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In March 2005, delegates from more than 100 developed and developing countries and major international agencies endorsed the Paris Declaration on Aid Effectiveness* at the Second High-Level Forum on Aid Effectiveness. As cochair of the session at which the declaration was adopted, and as new President of the Asian Development Bank (ADB), I was inspired by the breadth and depth of the consensus and by the soundness of the five partnership commitments: ownership, alignment, harmonization, managing for results, and mutual accountability.
These commitments provide the road map for enhancing development effectiveness and helping our developing member countries (DMCs) achieve the Millennium Development Goals (MDGs).
We have now entered a new era of development reflecting the ever-changing global and regional economy. Today’s increased interdependence of national economies and accelerating regional integration have contributed to major reductions in poverty in Asia and the Pacific over the last decade. However, almost two thirds of the world’s poor still live in the region, with inequality persisting both within and across countries. To achieve inclusive development—and to attain the income and nonincome MDGs—we must work collaboratively to improve our development effectiveness.
Since the Paris Forum, I have reflected on the application of the declaration in ADB and our DMCs. I am pleased that ADB has already adopted a number of organizational and procedural changes that support the five partnership commitments. These include a major reorganization, new business processes, performance-based allocation of concessional resources, and stronger resident missions, to mention but a few.
Yet much remains to be done. The Paris Declaration is about transforming words into action, and about measuring and monitoring the results we achieve together. Further, achieving those results will allow us to attain our shared objective of reducing poverty and meeting the MDGs by 2015.
Partner countries exercise effective leadership over their development policies and strategies and coordinate development actions.
The Paris Declaration is about transforming words into action, and about measuring and monitoring the results we achieve together
Country ownership continues to be a key strategic operating principle for ADB. We support this by aligning our country strategies and programs with nationally owned poverty reduction strategies; delivering assistance programs consistent with DMC priorities and using existing country systems and procedures whenever possible; and supporting sustainable capacity development at the country level, including developing human resources and strengthening institutions.
However, implementing true country ownership and promoting country leadership are challenging for several reasons. In many countries, already strained government agencies face multiple and complex donor requirements and poorly integrated donor programs. The limited capacities of many DMC governments often lead development agencies to rely on stand-alone project implementation units—an unsustainable model of development. These concerns were clearly voiced at the Paris Forum and are reflected in the commitments in the Paris Declaration.
ADB is working hard to alleviate these constraints in our DMCs through systematic and sustainable capacity development. The Review of the Poverty Reduction Strategy highlighted the fundamental link between country ownership and capacity development, including designating capacity development as a thematic priority in ADB’s operations. While ADB has always assisted in building capacity, this has generally been done within the context of specific project designs. The difference now is that we treat sustainable capacity development as an integral and strategic component of our country strategies and programs (CSPs). Over time, this approach will empower our DMCs to take full ownership of their national development agendas and exercise more far-reaching country leadership in the fight against poverty.
Donors base their overall support on partner countries’ national development strategies, institutions, and procedures.
ADB is committed to aligning its operations with nationally owned poverty reduction strategies. Our CSPs, which are increasingly results oriented, are prepared in close partnership with our DMCs. We are now developing more flexible approaches that better align ADB’s planning and processing cycles with those of our DMCs. As an institution, we recognize the importance of collaborating with other development partners to ensure that our individual and collective programs are closely aligned with country priorities.
ADB recognizes and appreciates variation in country-owned development objectives and the tremendous diversity that exists among our DMCs. Strategies, approaches, and modalities that work well in low-income countries may be less relevant and effective in middle-income countries. In this regard, the Partnership Framework for Middle Income and Ordinary Capital Resource Countries aims to better align ADB’s products and services with countrydefined priorities and systems. Such improved alignment, combined with close collaboration with development partners, will strengthen ADB’s relevance and effectiveness in countries that are home to over three quarters of the poor people in Asia and the Pacific.
Donors’ actions are more harmonized, transparent, and collectively effective.
Harmonizing operational policies, procedures, and approaches reduces transaction costs for donors and developing countries. ADB collaborates with partners on key economic, sector, and thematic work and increasingly uses harmonized approaches in developing results-oriented CSPs. In many countries, ADB works closely with the World Bank and other institutions on joint poverty analyses, financial sector assessments, portfolio reviews, and public expenditure reviews.
We will continue to enhance ADB’s development effectiveness by deepening our commitment to an organizational culture and mind-set focusing on results
Harmonizing business processes across development partners enhances development effectiveness, reduces transaction costs, and promotes transparency. In this vein, ADB’s Innovation and Efficiency Initiative aims to improve the efficiency, quality, and relevance of ADB activities in such areas as procurement, safeguards, and operational risk management.
Managing resources and improving decisionmaking for results.
At the project level, implementing the Project Performance Management System Action Plan is further improving project quality at entry. We continue to enhance project frameworks, track development objectives during project implementation, and provide technical assistance and training to DMCs to improve their capacity to monitor results.
At the country level, ADB helps build sustainable capacities such as data collection, reporting, and statistical analysis. The Cooperation Fund in Support of Managing for Development Results, funded by the governments of Canada and the Netherlands (and soon to be joined by a contribution from Norway), provides grant funding for capacity development in DMCs. The first results-oriented CSP, in Nepal, featured results-based sector plans and clear linkages between sector goals and objectives. Similar results-based CSPs are being developed in Bangladesh, Fiji Islands, Indonesia, Philippines, and Viet Nam.
ADB is also actively engaged in the global partnership for development effectiveness. ADB was prominently involved in the Second International Roundtable on Development Results, which led to the Marrakech Memorandum and Core Principles and Action Plan. ADB has organized regional workshops on harmonization, alignment, and managing for development results and cosponsored the March forum in Paris. ADB is also providing key inputs to the Global Monitoring Report and other international initiatives, including collaborating with partners to develop better indicators and reliable monitoring and evaluation systems.
Donors and partners are accountable for development results.
ADB accepts responsibility for using its resources wisely and understands the importance of mutual accountability. We have taken several concrete steps to increase our accountability to stakeholders. The creation of an independent Operations Evaluation Department has made ADB’s evaluation function more objective and credible. ADB’s accountability mechanism has been significantly improved, with two separate but complementary functions—consultation and compliance review—providing a sound method for addressing stakeholder concerns. The process of preparing ADB’s new Public Communications Policy is itself improving our transparency and accountability, as reflected in extensive consultations with civil society organizations and other groups.
At the institutional level, we are enhancing our results orientation and building internal capacities. ADB’s new Human Resources Strategy will upgrade staff resources and skills mix, integrate training and mentoring programs, and clarify institutional responsibilities. Incentive structures will be revised to encourage the highquality analysis and monitoring required for development effectiveness. Finally, ADB’s knowledge management activities are capturing best practices, transferring them to DMCs, and helping adapt those best practices to country-specific settings.
As we move forward after the Annual Meeting in Istanbul, ADB will continue to expand its role as a key advocate for regional interests on the global stage, while simultaneously translating the global development agenda into a regional context. In line with ADB’s Charter mandate, we will assume an enhanced role in promoting regional cooperation and economic integration in Asia and the Pacific. We will build and sustain our partnerships, including expanding joint analytic work, country programming, portfolio reviews, and monitoring and evaluation. We will share knowledge with one another and ensure that we transfer that knowledge to partner countries.
We will continue to enhance ADB’s development effectiveness by deepening our commitment to an organizational culture and mind-set focusing on results. This represents a new way of doing business that is being integrated into ADB operations. This process is essential for ADB to become a more effective organization that has a concrete and measurable impact on reducing poverty in Asia and the Pacific.
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