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p. 5 of 7 BACK | NEXT I. Introduction II. Reasons for Updating III. Process and Guiding Principles Adopted for Updating IV. Updated Sector and Theme Classification V. Implementation Arrangements VI. Next Steps Appendixes

Updating Sector and Theme Classification at the Asian Development Bank

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V. Implementation Arrangements

A. Scope of Activities Subject to Sector and Thematic Classification

19. All operational activities¯projects for both public and private sectors¯supported by ADB will be required to indicate the theme and sector classification. “Operational activities” cover policy-based programs financed by loans, investment projects financed by loan resources or grants (including pilot testing of innovations), equity and guarantee operations, technical assistance activities (loan or grant financed) as well as economic, sector, thematic work financed by ADB TA funds or trust fund grants. Sector and thematic classification will be indicated in (i) project concept papers appended to the country strategy and programs (CSP) and their updates (CSPU); (ii) report and recommendation of the President (RRP) on proposals for loans, equity, and guarantee operations; and (iii) TA papers.

B. Timing of Application and Mechanisms to Ensure Accuracy and Consistency

20. Sector and thematic classification will be assigned to each project as soon as the project is identified. The project team leader classifies pipeline projects, and records it in the project concept paper. Classification can be changed during project design and processing. The internal quality assurance mechanism (i.e. intra and inter-departmental reviews) reviews the accuracy and consistency of the classification (para. 21). Upon project approval, ADB locks the sector and thematic classification for the project. The theme and sector assignment for the project remains constant until project completion, unless the project undergoes a formal change of project objectives or scope or both.

21. The department head of the unit responsible for designing and implementing a particular project is accountable for ensuring the accuracy of the theme and sector assignment for that project. The Poverty Reduction and Social Development Division in the Regional and Sustainable Development Department (RSDD) is responsible for ensuring consistency of the theme and sector assignment across regional and knowledge departments.

C. Entry and Management of Classification Information

22. The sector and theme classification for each pipeline project is registered in the Project Processing and Information System (PPIS), an internal system that tracks information on the pipeline projects. Upon project approval, classification information in the PPIS is transferred to the systems covering ongoing projects, such as the Loan Finance and Information System (LFIS), Technical Assistance Information System (TAIS), Project Performance Management System (PPMS), and Technical Assistance Performance Management System (TPR). This mechanism permits ADB to use the information for monitoring, analyzing, and reporting not only on resource allocation, but also on outputs, outcomes, and impacts yielded by the operations supported by ADB.

D. Historical Reclassification of the Sector Assignment

23. ADB is currently reclassifying sector assignments of the past projects dating back to its inception. This is to permit accurate and consistent reporting on the historical, current, and future sectoral distribution of ADB operations. This work will be completed within 2004. Historical reclassification will not cover thematic classification as themes are specific to the strategic objectives of ADB at a given period.

E. Custodian of Sector and Thematic Classification

24. The updating exercise was coordinated by the Strategy and Policy Department. As of 1 May 2004, RSDD has custodianship of the updated sector and thematic classification. RSDD will coordinate future refinements and updating of the sector and thematic classification, including periodic updating of the definitions.

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