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Resident Mission Policy : Policy framework
Scope and responsibility for functionsThis section discusses the scope and location of work to be undertaken for each of the standard and specific functions and assesses the relative advantages and disadvantages of undertaking these functions at RMs and headquarters. In some cases, pilot testing on a selective basis is proposed. The purposes of pilot testing are to (i) examine different options for accomplishing ADB’s business; (ii) assess feasibility and constraints for each option; (iii) assess the impact on quality, efficiency, and responsiveness of these options; (iv) identify any needed changes in business processes; and (v) identify financial implications. Government, civil society, and private sector relations; the ability to build enduring relationships with key DMC agencies and players; and outreach to stakeholders in the development process (such as nongovernment organizations, chambers of commerce, and advocacy and public interest groups) clearly are the comparative advantage of RMs, which are closest to them and can maintain better and more regular contact than can headquarters missions. RMs will therefore take the lead in this area. Policy dialogue is defined to mean working with the government and relevant DMC agencies to improve the strategic and policy framework across a wide range of development issues. Policy dialogue will clearly be a dialogue between partners in development, and should not be perceived as synonymous with policy prescription. Policy dialogue can be conducted at a number of levels, depending upon the country and operational circumstances. This is an area where both the RM and headquarters have a significant role to play. Country-level macroeconomic policy dialogue, and sector-level policy dialogue that relates to programming and government relations can be undertaken by both headquarters and RMs, depending on the importance of the topic, the RM’s capacity, as well as the DMC’s preferences. Project-related policy dialogue, and associated sector-specific dialogue will continue to be led by mission leaders and headquarters departments for all projects processed at headquarters. For ADB’s products and services to be relevant and responsive to the growing needs of a DMC, it must have accurate and up-to-date information on the latest economic, development, and political events. Reporting regularly on such events is an important RM function. With more and more external aid activity being coordinated within DMCs, aid coordination will be a major area of RM effort. While some aid coordination will continue through headquarters, in general it will be led by RMs, which will take a proactive role. ADB could consider taking a lead role in organizing the consultative group of aid agencies for selected DMCs. Where there is the capacity to act as the lead aid agency, the RM will do so. Where this is not the case, the RM will strive to provide positive support to other agencies’ efforts in the sector. In the area of external relations and information dissemination, the lead at the country level will be taken by the RM, which is best placed to judge the approach, the media, and the issues to address. Too often, ADB is not known beyond the small circle of government and funding agencies. This restricts its ability to influence development and reduces its outreach in DMCs. At the same time, proactively projecting the DMC’s and ADB’s work is essential to build support for development assistance and to provide the wider global audience with a stronger direct involvement in the region and with ADB. Increasingly, international media organizations have bureaus in DMCs, and RMs must be able to work effectively with them. Because the advantages of local knowledge and expertise are major reasons for establishing RMs in each DMC, RMs will assume additional responsibility for country-level economic and sector work and other analytical work where staff skills permit. While macroeconomic and structural reform work may require the greater expertise, data, and cross-country experience of headquarters, RMs will provide greater inputs by undertaking specific assignments in these areas. Individual RMs and headquarters will agree upon an allocation of economic and sector work that incorporates the skills and local knowledge of RM staff, and avoids duplication of effort. Country programming refers to the planning and scheduling of ADB’s operations in a DMC. Country programming has a country rather than sector or project focus, and seeks to harmonize ADB's overall strategic objectives with the DMC's development priorities. This involves developing extensive knowledge of the country, understanding its development needs, assessing strengths and weaknesses in the development process, identifying specific development priorities and sectors, and matching these with ADB's available resources and capacities. The instruments by which this objective is achieved include the country operational strategy, the country economic review, the country assistance plan, and discussions regarding specific annual programs. Country programming relies for sector knowledge on inputs from projects departments, and the findings of portfolio reviews. Country programming is currently undertaken by programs divisions, subject to overall supervision by programs directors and Management. RMs provide inputs to this process, but the degree of RM involvement varies widely. Given greater local knowledge, proximity to key DMC stakehold-ers, and quicker feedback, RMs seem to have a comparative advantage in programming. Having control over programming will also give RMs much greater credibility and the capacity to respond more quickly to DMC issues. Necessary sector knowledge, where not available in the RM, can be provided by involving headquarters sector staff, as is done for country programming missions. In principle, therefore, programming could be advantageously shifted to RMs. However, there are some possible disadvantages. Country programs are finalized in the context of overall priorities and resources regionwide and ADB-wide, through a complex iterative process of consultation between departments concerned. While RMs can be included in this process, there would be higher transaction costs. Secondly, programming involves considerable prioritization, and headquarters missions may be better placed to make unpopular choices. Third, shifting programming to the RMs could disconnect the country program from the rest of ADB at the strategic as well as operational level, and reduce program and country knowledge available as inputs to headquarters. Finally, there is the support provided by programs divisions to project and TA processing, such as inputs to project design and preparation, conducting loan negotiations, Management and Board briefings, and involvement in procurement matters. These business processes would need review. Notwithstanding these concerns, country programming is an area in which RM involvement must be increased if they are to undertake their new strategic role. As a first step, for all RMs, involvement in programming will be increased by having RM staff (i) included as members of the country team and country programming mission, (ii) attend key headquarters-based discussions on the program (management review meeting and informal Board discussions), and (iii) act as the primary government contact for any changes in the program. However, basic responsibility would remain with headquarters programs divisions. In addition, the transfer of responsibility for country programming to RMs under the overall supervision of the programs directors will be pilot tested in selected DMCs. Loan and TA processing is a major function. RM involvement in the project cycle will be increased and will start at a very early, upstream phase. This will build ownership and bring the advantages of local expertise to bear in project design. RM staff will join all the relevant missions as members rather than just providing support. However, there are some constraints in going beyond such greater involvement to shifting complete responsibility for project processing to the RMs. One major constraint is ADB’s current approval and procedural systems. Because the extensive process of interdepartmental coordination, review, and approvals (including management review meeting, staff review committee, and Board briefings) will still be needed, it may not be cost effective to have mission leaders constantly moving to headquarters. The South Pacific RM’s experi-ence with project processing demonstrated that because of this constraint, it is a time-consuming and complex exercise. It may therefore be necessary to simplify some of the current business processes for such delegated project processing to work. A second issue is the availability of qualified sector staff in RMs to process projects. Staff posted to RMs are unlikely to have the sector expertise needed for all projects in the pipeline. Given ADB's small size and the limited number of specialist staff in each area, it will not be possible to assign staff to RMs for project processing, unless they also undertake other RM work. Nevertheless, some projects can be taken up by RMs, such as projects that are relatively simple, do not have complex technical or policy issues to resolve, and are consonant with RM staff expertise. These will be taken up as test cases. Therefore, it is proposed that project processing continue to be the responsibility of headquarters, but that RM-based processing be pilot tested for selected projects. Given the local presence, knowledge, and proximity of RMs to the executing agencies, portfolio management and project administration are clearly areas where RM activities can be expanded. Port-folio management refers to managing the implementation performance of all ADB-approved loans and TAs in a DMC. Project administration can be defined as all the activities connected with the implementation and initial operations of projects financed by ADB. These include monitoring of project implementation, compliance with covenants, review of financial statements, procurement, and disbursement. As with other functions, the extent of RM activity in this area will be determined on a country basis. (As indicated on page 35, to ensure adequate control, procurement and disbursement functions will not be delegated to RMs beyond the existing arrangements). Some issues may need to be resolved: RMs may not have the necessary staff in each sector, and there may be insufficient experienced staff at headquarters to be sent to all RMs to undertake such work, even if they are assisted by competent local staff. If all project administration is done at RMs, there may be very little feedback and connection between project implementation and the preparation of new projects. It may be difficult to delegate complex and sensitive program loans. While there is some validity to these points, the clear advantages of being where the project is being implemented outweigh them, and as far as practicable, projects will be delegated to RMs. The informal guidelines on the criteria for delegating projects to RMs will be updated and formalized. On the basis of such revised guidelines, the maximum number of projects will be delegated to RMs. In addition, the scope for delegating administration of all projects in a DMC to its RM will be pilot tested in selected RMs. In such cases, except for control and oversight functions and perhaps some program loans, the RM will have the full responsibility for managing all ongoing projects. Some RMs are already leading the annual country portfolio review missions, where the close involvement of RMs with executing agencies provides ADB with intimate knowledge of implementation problems, as well as of government procedures and requirements. Where possible, more RMs will lead this activity. Where this is not possible, the RM will participate fully and actively in the mission.
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