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p. 2 of 13 BACK | NEXT I. Development Challenges for the Asia and Pacific Region A. Long-Term Challenges and ADB’s Response B. Medium-Term Challenges II. ADB’S Medium-Term Strategy (2001-2005) IV. The Strategy and the Planning, Programming, and Budget Process

Medium-Term Strategy : I. Development Challenges for the Asia and Pacific Region

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A. Long-Term Challenges and ADB’s Response

1. Poverty reduction, the overarching goal of the Asian Development Bank ADB),¹ remains the most significant development challenge for the Asia and Pacific region. While the region achieved unprecedented growth and development over the past three decades, it is home to almost two thirds of the world’s poor.² The majority of the poor live in South Asia and the People’s Republic of China (PRC); substantial numbers live in Southeast Asia. Many people in the Central Asian republics have slipped into poverty during the transition of their countries to market economies, and the island countries in the Pacific continue to experience deteriorating economies and increased vulnerability due to conflict and external economic shocks. Poverty-reducing efforts in the Asia and Pacific region, therefore, remain central to the fight against global poverty.

2. Achievement of the international development goals (IDGs) by 2015 substantially depends on the Asia and Pacific region aggressively addressing these goals.³ The IDGs deal with decreasing extreme poverty by one half, with broadening access to, and achieving gender equality in, education and health services, and with improving the environment. While the Asia and Pacific region has made progress in achieving the IDGs, progress has been uneven. South Asia lags substantially behind the rest of the region on all the indicators. Other parts of Asia, particularly East Asia, have been particularly successful in addressing absolute poverty but more needs to be done to effectively address some of the other IDG indicators. Environmental deterioration and degradation, in particular, remain a major concern across the region. An approach that comprehensively addresses these multidimensional goals is necessary. Such an approach requires major economic and social progress, and robust, sustainable economic growth. This will provide the resources necessary to address the IDGs at the country level.

3. ADB’s long-term strategic framework (LTSF) addresses the major long-term development challenges of the region.⁴ The LTSF defines the basic elements of a long-term strategic agenda for ADB to address these challenges, and broad operating principles for implementing this agenda. It identifies three core areas of intervention in support of poverty reduction: (i) sustainable economic growth, (ii) inclusive social development, and (iii) governance for effective policies and institutions. These core areas are considered necessary for achieving the IDGs. (Appendix 1 provides data on the IDGs for ADB's developing member countries [DMCs]). To broaden and deepen the impact of the core areas, three crosscutting themes are identified: (i) promoting the role of the private sector in development, (ii) supporting regional cooperation and integration for development, and (iii) addressing environmental sustainability. The LTSF specifies four operating principles to ensure selectivity and focus of ADB’s interventions at the country level, and to enhance the development impact and effectiveness of ADB’s support to its DMCs: (i) ensure country leadership and ownership of the development agenda, (ii) take a long-term approach to development assistance, (iii) enhance strategic alliances and partnerships, and (iv) measure development impact.

4. The LTSF covers 15 years (2001-2015); and will be implemented through a set of three medium-term strategies (MTSs), each covering a five-year period. Each MTS will (i) set priorities for ADB’s operations based on the strategic agenda specified in the LTSF, (ii) be geared to the most immediate and pressing development needs of the region, and (iii) provide an opportunity for adjustments to the LTSF in response to changing circumstances and evolving organizational capabilities. This first MTS addresses the medium-term needs and challenges for the region for 2001-2005.

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