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p. 3 of 25 BACK | NEXT Introduction Background Evolution of resident missions Current responsibilities and functions Current organization, staffing, and costs Achievements and constraints The need for change Practices of other multilateral development banks Policy framework Organizational and resource issues Recommendation

Resident Mission Policy : Background

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Evolution of resident missions

ADB opened its first RM² in Bangladesh³ on 20 July 1982 on an experimental basis. An interim review of its operations in 1984 concluded that (i) within its limited capacity, the RM had made a useful contribution to ADB's operations and activities in Bangladesh; and (ii) drawing from this experience, the establishment of field offices could improve ADB operations. This conclusion validated the RM concept and provided the basis for future expansion. Following a review of ADB operations in the South Pacific DMCs, ADB's Board of Directors approved the opening of the South Pacific Regional Mission on 24 January 1984.⁴ In 1986, the Board approved a policy paper⁵ that set out criteria for establishing RMs. The formal criteria are that the DMC in which an RM is to be opened should

1. receive over 10 percent of ADB's annual lending, and
2. have a loan portfolio with over 10 percent of ADB's ongoing loans by value and number.

The policy paper recognized that smaller borrowing countries may not meet these criteria and that there may be special circumstances when an RM needs to be opened even when the criteria are not fully met. The most important of such circumstances involve problems in project implementation. A poor disbursement ratio (25 per-cent below ADB average) was considered to be an appropriate indi-cation of such problems, but was not the only special circumstance possible. Others include (i) enhancement of policy dialogue through close government contact; (ii) aid coordination, especially participation in consultative meetings; (iii) the need to help ensure counter-part funding; (iv) special needs of transitional economies; (v) the need to explain ADB procedures to governments; and (vi) better identification of cofinancing opportunities.

Following approval of the policy paper, over the next six years the Board approved the establishment of RMs in four DMCs. Three RMs were opened in larger borrowing countries that fully met the volume criteria: Indonesia in 1987, Pakistan in 1989, and India in 1992. Although Nepal did not fully meet the criteria, an RM was established in 1989 in view of special circumstances. Thereafter, seven new RMs were established.⁶ None met the formal criteria, rather each was justified on the basis of special needs and country circumstances. Another response to specific country needs has been the fielding of extended missions.⁷ By early 2000, ADB will have 12 operational RMs⁸ with country-specific assignments, a regional mission in Vanuatu for the South Pacific DMCs, and three extended missions⁹ administering specific projects and programs.

Clearly, the criteria established in 1986 proved too narrow to meet ADB’s expanding role and activities in the field. The special circumstances identified in the 1986 Board paper are now the norm rather than the exception; in the current operational environment, ADB’s approach to establishing RMs needs to be revised.

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