Catalog

25. Country ownership and leadership of the development agenda requires each DMC to have a poverty reduction agenda based on a national poverty reduction strategy (NPRS) that is fully owned and supported by the DMC. The assistance of ADB and other development partners will be based on the NPRS in each country. ADB will assist individual DMCs to prepare the NPRS where necessary. In line with the focus of the MTS, ADB activities in support of the NPRS will be defined and agreed to in the partnership agreements with each DMC and outlined in the CSP. To enhance ownership, the CSP cycles for all DMCs will be aligned progressively with their respective medium-term planning and public investment cycle, and by 2004 all CSPs will be prepared in parallel with these for each DMC.

26. More generally, ensuring country ownership and leadership requires continuing dialogue and consultation between ADB and all key stakeholders in the DMCs. The resident missions will take the lead role in this dialogue. Policy dialogue and greater interaction with the DMCs will be part of the core competencies of the resident missions and will be defined as one of their main functions. This will require staff time and requisite staff skills.

27. As a general principle, ADB will take a long-term approach to its involvement with the DMCs. This requires a stronger institutional commitment by ADB to particular areas of focus within countries (e.g., sectors and issues), and greater selectivity in ADB interventions. It also implies greater in-depth knowledge by ADB of both sector issues and country circumstances; and an organizational capacity to learn over time, both from experience and as circumstances evolve. Activities included in the CSP will reflect careful selection and a comprehensive program of support that includes a combination of activities ensuring long-term commitment, rather than individual, stand-alone loans and TA. Emphasis on country performance and the success of this comprehensive approach will be reinforced through intensive portfolio evaluation reviews regularly undertaken by the Operations Evaluations Department (OED).

28. An effective long-term approach in a particular sector must reflect sequencing of activities based on the priorities identified for each DMC. A strategy matrix (Appendix 2) can be used as an organizing tool to logically break down each priority area, e.g., provision of economic infrastructure, into core activities and to identify linkages among activities, e.g., associated need for strengthening particular institutions. Such assessment will require substantial up-front analysis through economic and sector work (ESW) and policy dialogue. This is where key strategic assessments (poverty, governance, and private sector) for each country become particularly important. In the case of countries with access to the Asian Development Fund resources, the performance-based allocation (PBA) assessments will also become increasingly important in identifying and prioritizing key long-term issues for ADB assistance.

29. The implementation of long-term assistance approaches will be executed through the CSP process. Starting from 2002 all new CSPs need to present a more focused country strategy with clear priorities, and a sequencing of assistance activities. Interventions will focus on a limited number of sectors/subsectors that have a strong impact on poverty reduction and development, and where ADB has the capability, experience, and a comparative advantage. The most successful long-term approaches can lead to programmatic forms of assistance such as sector-wide approaches (SWAPs). For both the development partner and recipient government, SWAP can have significant benefits, provided accountability issues are addressed and adequate safeguards are met.¹⁷ ADB together with the concerned DMC will work to achieve a limited number of pilot SWAPs in selected countries by 2005. To this end, in 2002 ADB will need to determine, together with selected DMCs, which SWAPs to tentatively target for implementation. Apart from SWAPs, long-term approaches will involve assistance modalities blending TAs, project and program loans, and regional TAs. Where appropriate, flexible program cluster loans and other program lending modalities will be developed to better support a longer-term approach to development assistance.

30. As a regional multilateral development institution, ADB has a unique mandate to support development in Asia and the Pacific. However, the challenges of development go well beyond the resources and capabilities of any single institution. Therefore ADB’s effectiveness will also be a function of its abilities to develop alliances and partnerships that leverage resources for development in the region. At one extreme are programmatic approaches that will require that all development partners in a given sector work closely together. In general, the more efficient use of development assistance over the medium term will require ADB to develop much stronger linkages with other development partners, e.g., other multilateral development banks, International Monetary Fund, United Nations institutions, bilateral assistance agencies, and nongovernment organizations (NGOs) operating in the field. Developing partnerships with the private sector to involve them in broader and deeper ways in the development process will also be necessary.

31. In general, partnerships in development assistance must start with the formulation of the NPRS, and under the leadership of the DMCs. Building on this, relations with other development partners must be clearly spelled out in the CSP, identifying areas where ADB will take a long-term leadership role based on its particular capabilities and experience, as well as areas where it will play a complementary role. Partnerships will also drive all ESW to avoid duplication and overlap. All ESW must be identified up front during CSP preparation. Within this overall context, ADB will expand its partnership agenda with both traditional partners, e.g., United Nations Development Programme (UNDP) and World Bank, and include new types of partners that can assist in implementing its strategy, e.g., NGOs,¹⁸ foundations, community-based organizations, and the private sector. At the broader institutional level, relationships with agencies such as the World Bank, UNDP, and International Labour Organization will build on formal memorandums of understanding and develop joint institution-wide programs and action plans in addition to cooperation at the country level.¹⁹ Agreements with partners will also relate to funding mechanisms (e.g., trust funds). The Strategy and Policy Department (SPD) will promote the partnership agenda and report annually on progress and activities. Resident missions will play an enhanced role in supporting partnerships at the country level; this will be reflected in the country's areas of core competencies and performance evaluation. Box 1 summarizes the various steps involved in implementing the MTS.