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Annual Report 2004

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Message from the Chairman of the Board of Directors

Of the many momentous events of 2004, the most tragic was the massive tsunami in the Indian Ocean in the final week of the year. The toll in lost lives and property was staggering and will never be fully recorded. Overnight more than 2 million were added to the 1.9 billion poor in the region who live on less than $2 a day. Although our best efforts can never compensate the survivors for their pain, suffering, and loss of beloved family members and friends, the Asian Development Bank (ADB) and its partners are determined to replace devastation and despair with hope and confidence in the future while continuing to pursue our vision of freeing all of Asia and the Pacific from poverty.

Immediately following the disaster, ADB and its partners, the World Bank, the Islamic Development Bank, the United Nations, and the Japan Bank for International Cooperation, sent teams of experts to assess the extent of damage and to develop plans for rehabilitation and reconstruction. ADB's financial contribution was initially set at $325 million. In the months following the tsunami, ADB substantially increased its financial commitment and continued to work with its partners to address recovery needs in India, Indonesia, Maldives, and Sri Lanka. ADB established the Asian Tsunami Fund comprising $600 million in grant resources for reconstruction efforts and identified a further $175 million in funding from ongoing projects and programs.

The challenges facing ADB and its partners in these tsunami-affected countries are unprecedented. It is not simply a question of replacing infrastructure. Restoring the livelihoods of some of the world's poorest will be an equally complex task.

ADB's response to the tsunami was guided by the new Disaster and Emergency Assistance Policy. Approved in 2004, it emphasizes that rehabilitation after disasters involves more than infrastructure and stresses that capacity building and institutional strength to address disasters both before and after they occur must be central to ADB's assistance.

The tsunami response served to demonstrate ADB's capacity to act swiftly and effectively in times of crisis. This was also evident in our response to the avian flu outbreak in partnership with the World Health Organization, the Food and Agriculture Organization and other agencies and in our proactive approach to post-conflict reconstruction activities in Afghanistan, Sri Lanka, and Timor-Leste.

Several initiatives adopted in 2004 will allow ADB to continue to enhance its development effectiveness. ADB refined its poverty reduction strategy to achieve greater results. Integral to this is ADB's commitment to managing for development results. The reform agenda inaugurated in 2004 is grounded in the managing for development results framework and commits ADB to key reform initiatives to reinforce its capabilities to help its developing member countries achieve results.

The year also saw notable progress in other areas. The new accountability mechanism became fully operational, and the Operations Evaluation Department began reporting directly to the Board of Directors. The successful replenishment of the Asian Development Fund provided $7 billion in concessional resources to assist the poorest developing member countries reduce poverty over the next 4 years.

Other achievements of note included the adoption of the knowledge management framework, the approval of a new information systems and technology strategy, the review and revision of several other major strategies, the development of a public communications policy, and the approval of a new human resource strategy.

These and many other initiatives help ensure that ADB is an effective, dynamic development partner that is better able to assist its developing members meet the challenges of an ever-changing world. With the support and commitment of the staff and that of all our members and partners, it is my privilege to continue ADB's work in support of peace and prosperity for all in Asia and the Pacific.

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