Catalog

1. Donor Coordination

33. Donors reaffirmed the need for development partnerships, including much closer and sustained donor coordination. Partnerships should be fundamentally concerned with (i) promoting DMC leadership in and ownership of development policies and programs, (ii) performance-based allocation of concessional resources, and (iii) the effective delivery of assistance. In this context, Donors affirmed that problems of coordination in the Region have intensified as the number of aid donors, development institutions, aid programs, and projects has increased. Donors are concerned that poor coordination between agencies not only leads to waste, but puts a heavy burden on the limited managerial capacities of DMC governments. Donors reaffirmed that ADB should be one of the organizations in the Region taking a lead in donor coordination, both at headquarters and through resident missions and building development partnerships, including with the DMCs. Donors recommended ADB take the lead in strengthened donor coordination in DMCs in situations where ADB has a comparative advantage to do so and when requested by the Government, and to play an active role in donor coordination in situations where it does not take the lead role.

34. Donors concluded that today the international development community is working with many more partners to meet demands for greater efficiency; respond to more pluralistic and decentralized political systems; and recognize the importance of a dynamic private sector, local ownership, and participation by civil society. Defining development needs and planning and implementing programs and projects should be done through partnerships, with government (national, state, and municipal) providing leadership and involving civil society in all its forms including NGOs, the private sector, and development agencies. Consultation should take place as early as possible in the ADB’s country strategic planning process and project cycle, particularly with those impacted by ADB programs and projects, and ADB should look for innovative opportunities to harness civil society expertise. Such partnerships may also be needed at the regional and global levels to supply public goods required to overcome specific barriers to development.

35. Donors recognized that partnership approaches to development can be time-consuming, especially in the beginning. However, they agreed that development agencies such as ADB, should consider this as an investment towards achieving sustainable development. Donors recommended that ADB ensure that practical steps are taken, including staff training, to put partnership principles into practice.

2. The Comprehensive Development Framework (CDF) and Poverty Reduction Strategies

36. Donors reaffirmed the importance of the concept of Comprehensive Development Framework, or CDF, seeing this as an effective set of principles for development partnerships to promote and support measurable performance in DMCs and to achieve poverty reduction. The CDF seeks a better balance in policy-making and development investment planning by highlighting the interdependence of all elements of development—social, structural, human, governance, environmental, economic, and financial. Donors reaffirmed that the CDF approach must be led by DMCs with the participation of civil society and the private sector—and with the support of multilateral and bilateral organizations.

37. The CDF is based on the following principles:

1. ownership by the country: the country, not assistance agencies, determines the goals, phasing, timing, and sequencing of its development programs;

2. partnership: with government, civil society, assistance agencies, and the private sector in defining development needs and implementing programs;

3. a long-term vision of needs and solutions: built on national consultations, which can engender sustained national support; and

4. structural and social concerns: treated equally and at the same time with macroeconomic and financial concerns.

38. Donors agreed that the CDF approach is meant to be a compass, not a blueprint. How the principles are put into practice will vary from country to country depending on their needs and priorities. Donors reaffirmed that the CDF aims to give all stakeholders in a country’s development the information that provides a basis for each to contribute according to its comparative advantage. The arrangements for inter-agency coordination and division of labor will be unique to each. These arrangements must not undermine the country’s ownership and decision-making, and they must facilitate the participation of all major stakeholders. Each agency will remain individually accountable, according to its own standards, for carrying out its agreed contributions. Donors also reaffirmed that the CDF approach is concerned with much more than aid coordination. The broader framework of the CDF can allow participants (including ADB) to think more strategically about the sequencing of policies, programs, and projects and about the pacing of reforms. It can encourage a better balance between sectors and greater transparency in tradeoffs between economic and social needs. Further, with better alignment of strategies and greater selectivity for each participant in the development effort, more can be done with available resources; in that context CDF should promote and incorporate performance-based allocation of scarce resources for development. Costs to the DMC also can be reduced when aid agencies harmonize their work. In addition, because the CDF approach emphasizes giving voice to the poor, resources will go where they are most needed.

39. Donors agreed that to overcome the fragmentation of development efforts, it is essential that all development partners working in a DMC should support a locally led poverty reduction strategy. In response to a request of the G7 at the Cologne Summit in June 1999, and in the context of the enhanced HIPC Initiative, the World Bank and IMF have developed the concept of poverty reduction strategy papers (PRSPs) formulated under the leadership of the DMCs; PRSPs are to provide the context for financial assistance to low-income countries.⁶ PRSPs are to be prepared in accordance with CDF principles. They are to

1. be country-owned, designed in a participatory fashion,
2. be comprehensive, be based on a medium- and long-term perspective,
3. include appropriate monitoring indicators, and
4. form the basis for building partnerships with multilateral and bilateral agencies.

40. Donors agreed that although poverty reduction strategies are country-owned documents, they need to be supported by all relevant stakeholders and a country’s development partners. These partnerships can help build capacity to devise a successful poverty reduction strategy that promotes and addresses good governance and includes broad participation from all elements of society. They also provide a common framework for donor assistance programs. A comprehensive poverty reduction strategy will allow Donors to plan their aid commitments and to lend their expertise to government and civil society, based on the country’s own strategy. Finally, coordinated participation by the entire donor community will help track progress toward the international development goals.

41. Donors consider CDF and preparation of poverty reduction strategies as joint processes involving the developing countries, including all relevant stakeholders and Donors, with ADB playing an important role, and when called upon by the Government, to provide the lead supporting role (among development partners) to the Government. Donors recommended ADB incorporate the CDF principles into its strategic planning and integrate the analysis, results and recommendations of the DMC’s poverty reduction strategy, and where appropriate the technical analysis of other development partners, into the design of ADB’s country strategy, and to use the CDF principles for promoting development in the Region. Donors also recommended that ADB participate fully in the process of formulating comprehensive national poverty reduction strategies in ADF borrowers. Donors emphasized that ADB, in partnership with other development agencies, will best serve its borrowers by providing sound direction based on an appropriate policy and operational framework. Where government ownership and commitment are strong, ADB should plan an appropriate lending and non-lending program. Where ownership and commitment are lacking, ADB’s involvement should be scaled back and focused on non-lending services.