Catalog

Annual Report 2002

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Message from the Chairman of the Board of Directors

For the Asian Development Bank (ADB), 2002 was an eventful year. ADB went through a major reorganization in 2002, which overall proceeded as scheduled without disrupting ADB operations. As a result of the reorganization, ADB operations now have a greater country focus, and our development efforts are enhancing stakeholder ownership and participation. ADB is now better positioned to work more closely with its developing member countries (DMCs) in identifying their development needs and priorities, and in assisting them in their efforts to reduce poverty. We are in the process of reviewing the implementation of the reorganization to ensure that its objectives are fully achieved.

Another highlight in 2002 was ADB’s proactive assistance for postconflict reconstruction and rehabilitation, underscored by the resumption of our assistance to Afghanistan. Early last year, ADB played a pivotal role with the Afghan authorities and other development partners in assessing the initial needs of Afghanistan. ADB provided capacity-building technical assistance grants and supported a road rehabilitation project financed by the Japan Fund for Poverty Reduction. The United Kingdom’s grant fund to clear Afghanistan’s arrears with ADB lifted the final barrier for ADB to resume its lending operations. In response to urgent needs in Afghanistan and neighboring countries, Spain made a substantial additional contribution to the Asian Development Fund VIII. With these financial contributions and with the cooperation of other member countries, ADB provided a highly concessional loan of $150 million for the Postconflict Multisector Program—the first loan to Afghanistan by an international financial institution since lending was suspended in 1979. The total amount of ADB’s assistance to Afghanistan for 2002 was close to $200 million. Our Resident Mission in Kabul is now in full operation, and we will continue to work together with the Government and the people of Afghanistan, as well as other development partners, to build a brighter future.

Even before a ceasefire was agreed in February 2002 and before the peace process commenced after almost 2 decades of civil strife, ADB was assisting Sri Lanka, including the conflict areas in the north and east. Immediately after the ceasefire, I visited a conflict-stricken area in northern Sri Lanka near Vavuniya and talked with many people at a refugee camp, a district hospital, and a girls’ high school, from whom I learned how difficult life is for the affected people. To support the peace process and rehabilitation efforts, I once again visited several areas in Sri Lanka in March 2003, including Kilinochchi in the north where I met members of the Liberation Tigers of Tamil Eelam to discuss how to promote the peace process and further the rehabilitation efforts. In cooperation with other development partners, ADB will continue to be Sri Lanka’s partner in development, and support the country’s efforts to rebuild its economy and ensure enduring peace.

ADB also achieved important milestones in our efforts to promote regional and subregional cooperation among the DMCs, particularly in the Greater Mekong Subregion (GMS), South Asia, and Central Asia. ADB played an active role in organizing the first GMS Summit Meeting in November 2002, attended by the leaders of all six countries along the Mekong River to commemorate the 10th anniversary of the GMS program. ADB also hosted the first Ministerial Conference on Central Asia Economic Cooperation in March for the Central Asia Regional Economic Cooperation program, and helped organize the Finalization Meeting of the Country Advisors’ group in October for the South Asia Subregional Economic Cooperation initiative. Also in 2002, ADB started supporting a subregional cooperation initiative for a gas pipeline project connecting Turkmenistan, Afghanistan, and Pakistan.

In 2002, there were also several achievements in the area of policy and strategy formulation. New policies were adopted, including education and environment policies, that reflect the latest thinking in these areas. We continued our efforts to strengthen the effectiveness of our assistance. We also accelerated the pace of the harmonization exercises with other development partners, to reduce the transaction cost of assistance to our DMCs and to work together toward attaining the Millennium Development Goals.

The global political and economic situation is uncertain and unpredictable. Behind these very visible and pressing short-term difficulties, the underlying problems continue to be poverty, deprivation, and inequality. The challenge for ADB and its DMCs is to continue to address these fundamental problems in this uncertain environment by flexibly managing macroeconomic policy, creating an enabling business environment, and broadening and deepening our efforts to reduce poverty.

Through the major development summits and conferences, including the International Conference on Financing for Development in Monterrey and the World Summit on Sustainable Development in Johannesburg, the international community has been able to agree on much of what needs to be done. The agenda is known, but it will take all of us working together to make a difference. We need to make good on our commitments to improve governance, to provide greater financing for development, and to increase trade access. Our development efforts need to be carefully focused if they are to bring tangible benefits to the poor and socially vulnerable groups. This means reorienting our work to focus on achieving results and maximizing development impacts by defining monitorable indicators and outcomes, as well as strengthening our evaluation function.

Strengthening partnerships through better communications, transparency, and dialogue with all stakeholder groups is essential for meeting these challenges. We forged many such partnerships in 2002—at the global, regional, organizational, and individual levels.

ADB itself is a partnership of 61 members, and its membership is based on trust and confidence among governments and civil society. The membership keeps growing every year, and in 2002 ADB welcomed two new members: Portugal and Timor-Leste. Through our partnerships, ADB has a tremendous opportunity to forge the broad-based strategic initiatives needed to achieve peace and prosperity in the decades to come. An increasing number of member countries now provide ADB with grant funds to support sector, thematic, or country-specific projects as well as technical assistance and soft components of loans.

ADB signed new poverty partnership agreements in 2002 with six Asian and four Pacific island DMCs, bringing to 17 the total number signed by the end of the year. These partnership agreements are based on long-standing relationships between ADB and each DMC, and serve as important foundations for ADB’s country-specific strategies and programs.

The three pillars of ADB’s Poverty Reduction Strategy—pro-poor, sustainable economic growth; social development; and good governance—provide a solid basis for partnerships to reduce poverty in Asia and the Pacific. It is our common vision, our shared strategic objective, that makes the partnerships ADB forms so meaningful. These partnerships help ADB move closer to realizing our vision of an Asia and Pacific region free of poverty.

ADB’s continuous efforts to promote the private sector in development, to mainstream gender in its operations, to improve its internal governance and transparency—including the ongoing review of ADB’s Inspection Function—and to strengthen its cooperation with nongovernment organizations add further strength to ADB’s alliances as well as to its development effectiveness. It is also the alliances we have formed with our member countries, development partners, civil society, and individuals that bring us closer to understanding the nature and structure of poverty, and the development needs of all people across Asia and the Pacific. And it is these alliances that strengthen our resolve to make a difference.

Our greatest challenge continues to be the poverty that blights the lives of so many in the Asia and Pacific region. Our greatest strength in the fight to overcome poverty are the partnerships we have forged to meet that challenge. Partnerships are at the heart of ADB. By working together, we can truly make a difference for the people of developing Asia and the Pacific.