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Annual Report 2002
Operational Priorities and PerformanceWhen the Asian Development Bank (ADB) rededicated itself to reducing poverty in the Asia and Pacific region, it adopted a strategy for reaching this objective. Fighting Poverty in Asia and the Pacific: The Poverty Reduction Strategy provided the direction for all new operations and activities. That was 3 years ago. Between then and end-2002, ADB adopted the framework for implementing the strategy in the medium and long term, and supported detailed poverty analyses and intensive stakeholder consultations to provide the database from which to target changes. Poverty reduction issues and targets were agreed upon and integrated into new country strategies and programs and project-level interventions. ADB reclassified its lending, strengthened its operations, and reorganized itself. As part of the reorganization, ADB created a new department—Regional and Sustainable Development Department (RSDD)—to maintain quality and technical excellence across ADB, and to ensure ADB’s policies and guidelines are applied consistently in all its developing member countries (DMCs). In 2002, the Poverty Reduction Strategy continued to guide ADB’s work as detailed poverty analyses were completed and several poverty partnership agreements (PPAs) between DMC governments and ADB were signed (see boxes below). Also in 2002, ADB joined the international community in adopting a framework for measuring development progress, assessed the implementation process outlined in the strategy, and reviewed the initial results. These developments, as well as ADB’s priorities and implementation performance, are examined in this chapter. Poverty Partnership Agreements The poverty partnership agreement (PPA)—the mechanism by which ADB and its developing member countries (DMCs) measure and address poverty—describes a DMC’s macroeconomic, structural, and social conditions, and outlines a long-term set of goals, policies, and programs for reducing poverty. Ten DMCs—Cambodia, Cook Islands, Maldives, Marshall Islands, Federated States of Micronesia, Pakistan, Sri Lanka, Tajikistan, Tonga, and Viet Nam—signed PPAs with ADB in 2002. Each PPA concluded to date summarizes the respective government’s main vision and strategy for poverty reduction, the role of ADB in assisting that process, the modalities that such assistance will take, and the medium- and long-term goals and targets for poverty reduction that ADB and the government will jointly monitor and assess. For more on PPAs, see http://www.adb.org/Poverty/pdf/partnership.pdf. The commitment to review and update a PPA comes from DMCs, which take ownership of the process and program. Reviewing the First PPA Mongolia was the first ADB developing member country (DMC) to formalize a partnership to reduce poverty. Since March 2000, ADB has conducted two reviews of how the agreement has been implemented. For more on Mongolia’s strategy, see http://www.adb.org/Documents/CSPs/MON/2002/. The reviews helped in updating and refining ADB’s strategy and operational program for Mongolia and provided data for the Government’s poverty reduction strategy paper (PRSP), finalized in 2002. The first review, conducted in April 2001, highlighted the coexistence of the income and nonincome aspects of poverty and emphasized the importance of providing essential services to the poor. It also recognized the need for country-adapted targets for achieving the Millennium Development Goals (MDGs). The review pointed out that the MDGs used 1990 as the base year, the year when Mongolia began its transition and when poverty was not considered a phenomenon. The review recommended adjusting the targets used for Mongolia to take this into account. ADB provided technical assistance to help the Government develop more realistic measures of progress against the MDGs. The Government followed recommendations to maintain and increase its commitment to basic physical and social infrastructure by targeting investments in social services and social protection programs. Monitoring progress The second review, conducted in March 2002, indicated that Mongolia had made progress in achieving the MDGs: infant and child mortality had been reduced, health care had improved, and school enrollment had increased. The second review also highlighted the importance of economic growth and employment in reducing poverty. Consistent with the conclusions in the Government’s draft PRSP and with concerns expressed at the Consultative Group meeting held in Mongolia in July 2002, the second review noted that although access of the poor to essential services had improved, income poverty had remained almost unchanged. The poverty incidence of 36% was almost the same level as in 1995. Concluding that social sector investment alone could not provide a long-term solution to the problem of unemployment-related poverty, the review emphasized the importance of private sector participation in economic growth and employment.
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