Catalog

1. Operational Business Processes

101. Donors noted that ADB recently completed a review of its operational business processes. Donors noted, with concern, that this review suggested that current processes do not result in the desired level of “quality at entry” for key products: country operational strategy (COS), country assistance plan (CAP), Technical Assistance (TAs), and loans. This reduces the potential development impact of ADB’s assistance. Donors noted that ADB is taking an integrated approach to operational business processes. Country planning, programming, and TA and loan processing will be treated as one continuous integrated process and redesign will focus on three key areas: (i) ADB’s procedures for accountability, review, and approval; (ii) improvement of economic and sector work; and (iii) improvement of the quality and efficiency of country planning, programming, and TA and loan processing. There will be one single country strategy and program document (CSP). It will be prepared every five years and updated each year in between. The CSP will relate ADB’s strategic development objectives, detailed economic and sector work, and DMC strategies into a focused strategy for ADB assistance. ADB will concentrate on fewer sectors, with a longer-term horizon for assistance of 10-15 years. The CSP and its updates will be prepared with effective participation of DMC stakeholders including civil society, other development partners, as well as the views of the Board of Directors and will be endorsed through a formal meeting of the Board. The CSP will reflect findings from the relevant assessments and sector analyses including poverty analyses (and PRSPs, where these exist), public expenditure reviews—including assessment of fiscal choices and nonproductive expenditures—and private sector development strategies. Where ADB has not done such work, it should reflect the work of other institutions, as appropriate. Donors endorsed actions required to support the introduction of the revised processes (Appendix 8).

102. Donors took note of Management’s decision that the overall objective is to make changes in operational business processes effective latest by 1 January 2001. Donors went on to emphasize that two key areas of operational importance are (i) revised country programming processes and (ii) revised loan/TA preparation processes, and noted, with approval, that ADB has commenced revision of the relevant guidelines for staff and expect them to be finalized and distributed to staff by 1 October 2000 followed by workshops in the last quarter of the year to familiarize staff with the new procedures. These revisions should recognize the planned implementation of an ADF performance-based allocation system and governance action plan. Donors recommended that all relevant actions (Appendix 8) be completed in a timely manner for application in ADF VIII.

2. Improving Project Quality and Portfolio Management

103. Donors recommended that ADB continue to improve its procedures and practices for project quality and portfolio management, identify key areas of weakness, make specific recommendations to the Board, and undertake corrective measures as a matter of priority. In this context, Donors considered that in 1998-1999, a working group reviewed ADB’s experience in portfolio restructuring and spring-cleaning. Donors noted that, as a direct result of the findings and conclusions of the working group, new activities are being undertaken to improve project quality and portfolio management. The aim is to foster a proactive approach and to place the quality of portfolio performance at the forefront of ADB’s dialogue with DMCs. Donors also noted that a team has been established to prepare a portfolio management action plan (PMAP). Donors endorsed that the action plan will (i) improve the planning of future operations in DMCs, and the allocation of resources; (ii) highlight areas within ADB that need improvement; (iii) link portfolio performance to sectors and overall development in DMCs; (iv) focus Management’s attention on projects, sectors, and countries with severe performance problems; and (v) make systems for managing ADB’s portfolio more effective. Donors also endorsed Management’s decision to use the “project at risk” concept as the basic measure of portfolio performance. The “project at risk” concept comprises a system of reporting on projects at risk of not meeting their objectives. This risk can be due to a project not meeting criteria on implementation progress and/or development objectives having performance factors associated with unsatisfactory outcomes. Donors concluded that the concept would harmonize ADB’s approach with that of the World Bank, InterAmerican Development Bank, and the African Development Bank.