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Annual Report 2002 : Operational Priorities and Performance
ADB's policy framework for reducing povertyThe strategies and policies that guide ADB’s efforts at reducing poverty in the Asia and Pacific region were in place in 2002. The Long-Term Strategic Framework (LTSF) 2001–2015 focuses on achieving sustainable economic growth, inclusive social development, and good governance, providing a 15-year plan for ADB’s all-out assault on poverty. The LTSF presents several fundamental operating principles for reducing poverty: ensuring DMC ownership of their poverty reduction programs, enhancing strategic partnerships, and measuring development impact (see http://www.adb.org/Documents/Policies/LTSF). The Medium-Term Strategy (MTS) 2001–2005 guides ADB’s activities in its DMCs. Designed to enhance the development impact of ADB assistance, the MTS advocates ADB’s strong commitment to addressing the institutional and policy issues that support its priorities (see http://www.adb.org/Documents/Policies/MTS/2001/). ADB’s programming and planning processes reflect the MDGs. The MDGs, along with country-specific poverty indicators, have been reflected in national poverty strategies and have been incorporated into the PPAs and country strategies and programs (CSPs) and CSP updates. ADB is working with its development partners to achieve the MDGs, and is establishing mechanisms for monitoring progress. In 2002, ADB joined the UN ESCAP (Economic and Social Commission for Asia and the Pacific) in developing MDG indicators for Asia and the Pacific. Measuring development effectivenessBoth the LTSF and the MTS also highlighted the importance of measuring the
impact of development, noting that the ability to identify, measure, and report
impact in a timely manner is fundamental to the process of reducing poverty.
Participation and accountability are promoted when development goals and benchmarks
are articulated and when results are regularly monitored. In 2002, ADB continued
to harmonize its relevant practices and procedures with those of other multilateral
development banks (see http:// The success of ADB’s operations is not gauged solely by its projects and programs, but rather on the outcomes achieved in terms of development effectiveness and sustainability. To ensure that ADB’s scarce resources effectively contribute to sustainable development and poverty reduction in its DMCs, ADB adopted in 2001, and began implementing in 2002, its performance-based allocation (PBA) policy for Asian Development Fund (ADF) resources. The PBA system is premised on the understanding that efficient and equitable resource allocation requires an assessment of performance, needs, and absorptive capacity of the recipient DMC. Country performance is evaluated in terms of policy adoption and implementation, not merely outcomes. Needs are measured by per capita gross national product and population size. The PBA system evaluates the effectiveness of the policies and institutional frameworks in place (divided into policies and framework on sustainable economic growth, socially inclusive development, and governance and public sector management), and the quality of portfolio performance. Annual performance assessments were reflected in the allocations in the CSPs in 2002. However, performance criteria, indicators, and guidelines for performance assessment will continue to be refined and improved. For more on the PBA system, see http://www.adb.org/Documents/Policies/ Measuring Development Impact Measuring development impact is fundamental to the process of reducing poverty. In 2002, ADB conducted two studies to assess how the development impact of the Poverty Reduction Strategy was being monitored. In the first study, ADB examined the efficacy of its loan classification system in tracking whether the typology of loans approved in 2001 had addressed ADB’s target of channeling at least 40% of lending resources to poverty interventions. Concluding that the system did not accurately reflect the range of support for poverty interventions, the study highlighted the need for a more refined methodology for linking assessment to probable results, and provided the groundwork for further improving the monitoring system. The second study reviewed how the Poverty Reduction Strategy had been implemented in developing member countries (DMCs) receiving Asian Development Fund assistance. Preliminary results indicate that although process-outputs are discernible, time and sustained effort are needed for greater development impacts. National poverty reduction strategies need to be integrated into the respective DMCs’ broader macroeconomic framework and development program. Poverty definitions, measurements, and monitoring systems are being included in target-driven development planning, but the institutions collecting and evaluating the data need to be strengthened if performance indicators are to be meaningful. Although links are evident among poverty reduction targets, the Millennium Development Goals, and ADB’s assistance pipeline, these could be improved. Ongoing efforts are being directed at incorporating better baseline data with indicators that can monitor objectives. For more on ADB’s studies, see http://www.adb.org.
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