S
SAM Samoa SASEC South Asia Subregional Economic Cooperation SDP (See
Sector Development Program.)
SDR special drawing rights Sector Development Program A sector development program (SDP) enables ADB to combine (under appropriate circumstances) program, sector, or project lending and technical assistance under a single assistance window to address underlying sector (or subsector) needs in a comprehensive fashion. The SDP does not represent a new lending instrument, but combines existing modalities for more effective use. The main objectives are to foster an integrated approach to sector needs, including physical investment, policy reform, and capacity building, and to enhance ADB’s leverage for promoting necessary policy and institutional reforms. The SDP provides ADB with the flexibility to offer a mix of investment, policy-based assistance, and technical assistance specifically suited to country and sector circumstances.
The use of SDPs may be considered where a sector requires both investment lending and policy reform, and where the latter is unlikely to be achieved, in full and on time, without the support of an additional policy-based program lending component. While project and sector loans frequently include policy conditionalities and should seek to induce reform to the extent possible, SDPs can provide specific policy-based assistance in addition to the investment funding. This may be especially useful where a reform program entails significant economic, fiscal, or social costs. The counterpart funds accruing to the government under the program lending component can be used to cover some of these costs. A typical example is restructuring state-owned enterprises, which often involves substantial up-front costs to compensate for redundant labor and clear outstanding liabilities. Another example is reducing import tariffs, which involves loss of fiscal revenue and may cause hardship to sectors affected by import competition. Policy reforms that could warrant program lending support also include reducing subsidies or raising user charges, which—although they involve no financial costs to the government—are often politically difficult to implement. By making investment lending conditional on suitable policy reform, supplemented where needed by a program lending component to help defray short-term costs of adjustment or overcome the resistance of affected groups, ADB may play a catalytic role in enabling a government to proceed with necessary policy reforms.
(See also Lending; and Program Lending)
Sector Lending Sector loans assist in the development of a specific sector or subsector in a developing member country (DMC) by financing a part of the investment need of a DMC in that sector or subsector. A sector loan would be more suitable than a project loan if, under the loan, many subprojects in a single sector or subsector are to be financed.
Sector loans are normally provided to well-established and experienced institutions, and to sectors or subsectors where the policy framework is sound. If the criteria for sector lending are not adequately met, ADB may consider providing technical assistance for project preparation, a sector study, or institution building prior to or together with providing a sector loan. Where necessary, sector loans may also seek to improve sector policies.
(See also Lending; Program Lending; and Regional Assistance Plan)
Sectors and Subsectors ADB’s lending and technical assistance activities are classified according to the following sectors and subsectors.
Agriculture and Natural Resources Agricultural Support Services
Fertilizer Production
Fisheries
Forestry
Industrial Crops and Agro-Industry
Irrigation and Rural Development
Livestock Energy Electric Power
Energy-Others
Fuel Minerals
Natural Gas
Refinery Financial Capital Market Development
Development Finance Institution
Privatization Industry and Nonfuel Minerals Industry (Nonagriculture)
Nonfuel Minerals Social Infrastructure Education
Health and Population
Urban Development and Housing
Water Supply and Sanitation Transport and Communications Airports and Civil Aviation
Ports and Shipping
Railways
Roads and Road Transport
Telecommunications
(See also Lending; Policy Agenda; Program Lending;
Sector Development Program; and
Sector Lending)
Seminar Activities ADB regularly holds seminars and workshops to enhance the implementation capabilities of executing agencies. In addition, in-house seminars are also held to improve the skills of ADB staff dealing with project processing and administration, and other emerging areas such as environment and natural resource management.
Among the major regular seminars are business opportunities seminars to apprise contractors, manufacturers, suppliers, and consultants of opportunities available under ADB financing and of the requirements in preparing acceptable bid proposals.
(See also Annual Meeting; Business Information; Central Operations Services Office; Disbursements; Publications; and Technical Assistance) Sexual Harassment Prevention Program ADB adopted a policy on preventing sexual harassment because of its commitment to maintain mutual respect, safety, and tolerance in the workplace. Many nations, including ADB’s host nation, the Philippines, have laws prohibiting sexual harassment at work. This policy encourages managers, supervisors, and mission leaders to prevent harassment by establishing a climate of mutual respect among their staff. If problems occur, the emphasis is on assisting staff to resolve them confidentially and informally, while providing a formal process if the problems cannot be resolved. Several staff members have volunteered and been trained to help other staff members experiencing problems. SIN Singapore SLRM (See
Sri Lanka Resident Mission.)
SOCD Social Development Division Social Dimensions of Development In contrast to the sectoral focus of ADB’s loan and technical assistance activities, social development is a concern within ADB, extending across all ADB’s operations and sectors. Social development is based on a framework of issues that apply to the entire range of ADB’s policies and procedures and at each step in ADB’s operational cycles.
Despite the relatively high and sustained rates of economic growth that have been achieved in the region, poverty is a persistent problem in many developing member countries (DMCs), and thus one of ADB’s major concerns with social development. ADB also holds that development must address and equally benefit all people. Concerns of women also need to be incorporated on part of those men. Within ADB, the Social Development Division of the Office of Environment and Social Development is the focal point for social dimensions activities within ADB.
ADB requires social dimensions to be incorporated into ADB projects. The process starts with the initial social assessment that scopes whether and which social dimensions need to be studied through a full-fledged social analysis. This may call for a qualitative analysis of the
laws and regulations as they affect the progress of the poor, women, and vulnerable groups; social and economic pressures in favor of particular population groups and subgroups, and geographical areas; and ability of different groups to organize and undertake sustained development activities.
Quantitative assessments may involve, for example, analyzing data regarding resource allocation to different sectors, targeting specific geographic areas and population groups in such allocations, allocating public service personnel to different geographical areas, determining the incidence of taxation on different segments of the population, or analyzing budget from gender or social development point of view.
Examples of social dimension concerns that ADB addresses are poverty reduction, protection of vulnerable groups, people’s participation, gender and development, and avoidance or mitigation of adverse effects of development, especially for groups that are vulnerable and do not have the capacity to absorb adverse effects. Social dimensions are an important consideration in formulating development policies and strategies, including ADB’s specific operational strategies, and in translating policies and strategies into operational programs, including the design, implementation, monitoring, and evaluation of specific development projects and programs.
Several key social dimensions of development follow.
Gender and Development
Gender and development addresses the promotion of policies and activities that help women develop their full potential, improve their productivity, increase their contribution to the economy, and share in the benefits and rewards of development as equal partners with men. Poverty Reduction
Concern for poverty reduction includes assistance targeted directly to support productive activities that generate and expand opportunities for employment and income. Poverty is also addressed by improving the access of the poor to basic social services such as health, education, and family planning; and expanding the availability of these services. Protection of Vulnerable Groups
Vulnerable groups include children, the aged, indigenous peoples and cultural minorities, squatters and illegal settlers, disabled persons, immigrants, and peoples at the lowest levels of social structures. Members of vulnerable groups often are poor and not able to absorb the economic, social, and environmental shocks that growth and development often bring. Their concerns need to be integrated to the development planning. In some cases, it may be necessary to provide targeted assistance such as special compensation mechanisms or social safety nets for vulnerable groups that are affected adversely by development interventions and policy reforms. Public Participation
Participation is a process through which stakeholders can influence development and share control over initiatives that affect them. Participation supports the interaction of stakeholders in a more equitable and collaborative manner. Specific approaches to participation will depend on the nature of a development intervention and the stakeholders involved. (See also Country Operational Strategy Study; Office of Environment and Social Development; Priorities; and Recruitment) Social Infrastructure The development of social infrastructure is an important operational priority of ADB. Social infrastructure provides the enabling foundation for future economic growth. It improves people’s general welfare and satisfies the basic needs of the vulnerable and the poor. The development goals of developing member countries (DMCs) are met by ADB investments in education, health, population and nutrition, water supply and sanitation, urban development and housing, and tourism. These investments directly reflect ADB’s strategic development and operating objectives. ADB’s specific objectives in social infrastructure subsectors follow.
(See also Sectors and Subsectors)
Education
The private and social rates of return on investment in education, especially basic (primary and lower secondary) education, tend to be among the highest of all investments. ADB supports such projects where there is a strong demand for highly qualified, skilled workers and where policies exist to improve institutional efficiency and cost effectiveness, and promote links to the private sector. This provides a sound foundation for growth and improves equity. To realize gender equity, ADB either invests in areas where the interests and needs of women are prominent, such as primary and nonformal education, or targets women through special programs that will expand their income-earning opportunities. Demand for postsecondary and higher education in Asia is growing. ADB supports such projects where there is a strong demand for highly qualified, skilled workers. Providing skills development, and technical and vocational education and training, supports productivity growth. Rehabilitation and strengthening of education systems is a concern in the transitional economies. ADB’s operations in the education sector also aim at bridging the digital divide and recognize the importance of introducing information and communication technology (ICT) in schools and developing skills in the field of ICT for a broad section of society.
Education is essential for improving the quality of life and for reducing poverty. The basic principle of ADB’s education sector policy is to maximize leverage and impact by orienting ADB support increasingly toward education sector policy reform, particularly reform linked to poverty reduction. The principal priorities for education sector development are reducing poverty, enhancing the status of women, and facilitating economic growth. Subsidiary priorities linked to achieving these are
increasing equity and access, especially for the poor, women, and other marginalized groups;
improving the quality of education at all levels; strengthening management, governance, and efficiency with emphasis on greater stakeholder participation; mobilizing resources for sustainable education delivery, in particular facilitating the role of the private sector; strengthening collaboration with partners and beneficiaries; and emphasizing more experimentation with and dissemination of innovative strategies and technologies.
Health and Population
Investments in health have many advantages. Apart from providing high economic returns directly, investments also enhance the returns from investments in education. This type of investment provides substantial benefits to the poor, particularly women and children.
As a key element of ADB’s efforts to strengthen its support for human development, a new health sector policy paper was prepared. The paper strongly emphasizes the link between investment in primary health care, and economic growth and productivity. It reviews the status of health in the region, analyzes the main issues, identifies priorities for ADB support, and provides a framework to guide ADB in future investment in the sector. ADB’s overall approach is to help DMCs ensure that their citizens have broad access to basic, preventive, promotive, and curative services that are efficacious, cost-effective, and affordable. ADB will increase its health sector operations based on five strategic considerations: improving the health of the poor, women, and indigenous groups; focusing on achieving measurable results; testing innovative approaches; encouraging governments to take a more active role in health sector reform; and strengthening health management capacity.
(See also Lending; and Sectors and Subsectors) Social Protection
Social protection is a relatively new feature of ADB’s activities in some DMCs. This work covers a set of policies and programs designed to promote efficient and effective labor markets, protect individuals from the risks inherent in earning a living either from small-scale agriculture or the labor market, and provide support to individuals when market-based approaches for supporting themselves fail.
The policies and procedures included in social protection involve five major kinds of activities:
labor market policies and programs designed to facilitate labor adjustments and promote the smooth operation of labor markets; social insurance programs to cushion the risks associated with unemployment, disability, work injury, and old age; social assistance and welfare service programs to provide a floor for those with no other means of adequate support; micro and area-based schemes to cushion the risk to agricultural incomes from crop failure or temporary market disruptions, and reduce risk and vulnerability at the community level; and child protection, to secure the healthy and adequate development of the workforce including the use of student scholarships to keep children in school.
Urban Development and Housing
Urbanization has been a major engine of economic growth in the region. At the same time, however, rapid urbanization has led to massive environmental problems and a rise in the number of urban poor. Urbanization has also overwhelmed those responsible for managing urban areas, particularly the poorer countries in the region. Measures to improve the management and operation of urban services and promote good governance benefit both local and national economies, enhance the quality of life, and reduce urban poverty.
It is within this context that ADB encourages an integrated approach to urban development, extending assistance in the subsectors of water supply and sanitation, solid waste management, flood control, drainage, roads, urban transport, land development, slum improvement, housing, and housing finance for low-income communities.
ADB pursues a strategy to promote sustainable urban development that aims to enhance the quality of life for the urban poor by strengthening the institutional capacity, capability, and operational efficiency of agencies and institutions, especially urban local governments responsible for sustainable delivery management, and maintenance of urban services. Strong urban local governments and an increased role for community-based organizations and NGOs in project design, implementation, and operation and maintenance of project facilities is crucial to greater public participation. ADB projects emphasize measures to mobilize local resources through improved revenue collection, cost recovery, user charges, private sector participation, and contracting out of public services. Innovative techniques and approaches in these areas are introduced through ADB's policy reform agenda, technical assistance, and training activities.
(See also Sectors and Subsectors) Water Supply and Sanitation
The availability of safe drinking water and appropriate sanitation facilities is essential to people’s health and well-being, yet is out of reach of many people in the region. ADB’s main objective is to increase the provision of reliable and safe drinking water and sanitation services, thereby meeting basic needs in a cost-effective, sustainable, and affordable manner.
Water supply and sanitation components are often included in integrated urban development projects to balance the package of development benefits aimed at fostering human development, improving gender equity, and protecting the environment. ADB emphasizes the participation of NGOs and community organizations in the project selection, design, and implementation, and operation and maintenance of project facilities, and promotes the involvement of the private sector in management and maintenance. Support is also extended to the institutions and agencies concerned to improve the efficiency of delivery, operation and maintenance, financial management, cost recovery, and other measures for long-term sustainability.
Social Protection (See
Social Infrastructure.)
South Asia South Asia includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
(See also Financial Sector; and Regional Cooperation) South Pacific Regional Mission (See
Departments and Offices.)
Southeast Asia Southeast Asia includes Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Thailand, and Viet Nam.
(See also Brunei-Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area; Regional Cooperation; and Regional Economic Monitoring Unit) Special Funds In addition to its ordinary capital resources (OCR), ADB is authorized by its Charter to establish and administer special funds: the Asian Development Fund (ADF), Technical Assistance Special Fund (TASF), Japan Special Fund (JSF), and ADB Institute Special Fund. Special Funds resources are, at all times, held, used, and committed separately from the OCR.
Asian Development Fund
The ADF, whose resources consist mainly of contributions mobilized under periodic replenishments from ADB's members, is designed to provide loans on concessional terms to developing member countries (DMCs) with low per capita gross national product and limited debt repayment capacity. The same strict standards for loan approval and administration that apply to OCR loans are applied to ADF loans. On 14 December 1998, the Board of Directors approved amended loan terms for ADF. The amended terms are for new loans to all ADF borrowers, effective 1 January 1999.
The following are the amended ADF loan terms.
For project loans (other than quick-disbursing program loans): 32-year maturity including an 8-year grace period, 1 percent interest charge during the grace period, and 1.5 percent during the amortization period, and equal amortization. For quick-disbursing program loans: 24-year maturity, including an 8-year grace period, 1 percent interest charge during the grace period, and 1.5 percent during the amortization period, and equal amortization. The resources for these loans are mainly contributions mobilized under periodic replenishments from members. The replenishments are authorized by a resolution of the Board of Governors.
Technical Assistance Special Fund
The TASF is an important source of grant financing for ADB's technical assistance operations. It is funded mainly by regularized replenishment contributions, voluntary contributions of member countries, and allocations from OCR net income. Technical assistance enables ADB to help its DMCs improve their capabilities to formulate, design, implement, and operate development projects. Japan Special Fund
The JSF is another important source of financing for ADB's technical assistance operations. The main objective of the JSF is to help ADB's borrowing members broaden the scope of opportunities for new investment. The JSF is used to finance or cofinance technical assistance on a grant basis, and private sector development projects through equity investments.
Under the umbrella of the JSF, the Asian Currency Crisis Support Facility (ACCSF) was established in March 1999 to assist countries most affected by the financial crisis. The ACCSF modalities consist of interest payment assistance and technical assistance grants and guarantees all of which must be approved during the three-year period after the ACCSF's establishment (March 2002) or, if the beneficiary countries are not fully out of the crisis, during an extended period as the Government of Japan and ADB may agree.ADB Institute Special Fund
The ADB Institute Special Fund became operational in 1997 when the Government of Japan made an initial contribution to meet the costs for the ADB Institute's setup and operation.
(See also Controllers' Department; Financial Management; Financial Resources; Lending; and Project Selection Criteria) Special Liaison Office in East Timor (See
Departments and Offices.)
Special Program Loan Facility Under the Special Program Loan (SPL) Facility, ADB provides in exceptional circumstances large-scale lending to countries affected by crisis. The SPL would typically be provided in a crisis situation where an international rescue effort is being mounted in one or more of ADB’s developing member countries (DMCs) to help restore stability. In this context, a crisis is defined as a situation in which a DMC is facing unanticipated difficulties in meeting its external and internal payment obligations. The SPL may also be provided when the crisis has significant structural dimensions and is likely to have significant negative social impact.
Unlike regular program loans, SPLs are unanticipated and hence will not normally be included in the country strategy and program. Whereas the disbursements for regular program loans are synchronized with the incidence of adjustment costs, the disbursements for SPLs are typically provided to stem the reversal in private capital flows.
Spouse Employment Program The Spouse Liaison Officer (SLO) is an external consultant recruited by ADB to help spouses of expatriate staff members settle into the Philippines and in resident missions by providing employment information and contacts, before and after their arrival, and advising and assisting them in identifying and pursuing employment opportunities. A database of the qualifications of spouses interested in referrals for employment is maintained by the SLO. Links with embassies, local offices of multilateral organizations, local and international corporations, and local nongovernment organizations have also been established and are actively pursued by the SLO. SPRM (See
South Pacific Regional Mission.)
SRI Sri Lanka Sri Lanka Resident Mission (See
Departments and Offices.)
Strategic Agenda ADB’s strategic agenda, as first specified in the 1992 Medium-Term Strategic Framework, consists of development promotion, resource mobilization, and regional cooperation.
For development promotion, ADB’s agenda over the medium term suggests that, while emphasizing economic growth, ADB should increasingly address social concerns and environmental problems, the resolution of which will have a positive impact on growth.
In addressing its agenda on resource mobilization, ADB is concerned with mobilizing external resources, holding fund-raising and investment activities, augmenting external capital flows, and promoting domestic resource mobilization in developing member countries (DMCs).
A phased approach is followed in addressing ADB’s agenda on regional cooperation, which emphasizes economic aspects. In the first phase, the emphasis will be on increasing DMCs’ understanding and awareness of the potential and importance of regional cooperation. The second phase will clearly identify potential projects and programs that have regional and subregional implications. The third phase will finance selected pilot projects with strong economic rationales, highlighting areas of regional and subregional importance.
(See also Country Operational Strategy) Strategic Planning As of April 2001, ADB has signed partnership agreements with Bangladesh, Indonesia, and Mongolia. ADB’s strategic planning approach focuses on the need for strengthened partnership with developing member countries (DMCs) so that proper emphasis can be given to factoring DMCs’ priorities and preferences into ADB’s decision making. The cornerstone of the approach is its country focus.
ADB’s Long-Term Strategic Framework (LTSF) for 2001–2015 is the key statement that will guide the strategic management of ADB over the next 15 years. It defines ADB’s vision, its long-term strategic goals, and its fundamental operating principles.
The LTSF is anchored on ADB’s vision of an Asian and Pacific region free of poverty. This vision will be operationalized through three core areas of intervention:
sustainable economic growth, inclusive social development, and governance for effective policies and institutions.
These will be complemented by two crosscutting themes that will both broaden and deepen the impact of the core interventions: promotion of the role of the private sector in development, and regional cooperation and integration for development.
The LTSF will be implemented in phases and translated into operational terms through the Medium-Term Strategies (MTSs), which are five-year action-oriented implementation plans that concretize the main features of the LTSF. The first MTS covers the period 2001–2005.
(See also Corporate Planning; Strategy and Policy Department; and Country Operational Strategy Study) Strategy and Policy Department (See
Departments and Offices.)
Subregional Economic Cooperation (See Broad-Based Development Institution; Greater Mekong Subregion; and Regional Cooperation) Subscribed Capital Subscribed capital refers to a member’s subscription to shares of ADB’s capital stock.
(See also Capital Structure; Credit Risk; Financial Management; Financial Resources; Lending; Ordinary Capital Resources; and Valuation and Maintenance of Value of Capital Stock) Subscriptions The original subscriptions of regional members were determined by allocations agreed to by prospective regional members. These allocations were based on a formula that took into account gross domestic product adjusted for population, tax revenues, and exports on a weighted basis. Some regional members subsequently increased their subscriptions. There was no specific formula in regard to subscriptions by nonregional developed members. Their subscriptions were largely negotiated on the basis of their foreign aid policies, and budgetary allocations for financial support to multilateral institutions. Some nonregional members also voluntarily increased their subscriptions.
(See also Business Information; Capital Structure; Recruitment; Subscribed Capital; and Valuation and Maintenance of Value of Capital Stock) Summer Internship Program The Summer Internship Program offers a maximum of 10 internship positions to qualified students for 8 weeks every summer at ADB headquarters and resident/regional missions. The internship assignments give the students the opportunity to
experience a real work situation in a multilateral development bank; experience a multicultural environment in Asia, and work on tasks directly related to ADB’s business and gain understanding of ADB activities.
The basic eligibility criteria are the following. A student must be
enrolled at the time of application in either a master’s or doctorate degree program and continuing in the same course upon completing the internship in ADB; enrolled in a university located in a member country of ADB and recognized for its excellence in a field directly related to the internship, enrolled in a course related to the internship, competent in both written and spoken English, and a national of one of ADB’s member countries.
ADB sends invitations to participate in the program to universities registered with ADB. Participating universities advertise the internship positions to their students, screen applicants, and endorse the top three candidates to ADB for final selection. Individual applications are not accepted.
Supplementary Loans ADB finances cost overruns on its projects. In determining the amount of a supplementary loan, standard percentage limits—set under ADB’s local cost financing policy—are applied as appropriate to the revised total cost of an ongoing project with the actual level of finance determined on a case-by-case basis.
ADB is prepared to consider financing the entire foreign exchange cost, both direct and indirect costs, of the project. It is also prepared to consider using savings under ADB loans for the project to meet either the foreign exchange or local cost overrun, even though there may not be a total project cost overrun.
Whether the supplementary loan comes from the ordinary capital resources or the concessional Asian Development Fund (ADF) resources depends on the eligibility of the borrowing country concerned under ADF criteria prevailing when the loan is processed.
Sustainable Development The Brundtland Commission, created by the United Nations General Assembly in 1983, coined and defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Specifically, sustainable development is a “process of change in which the exploitation of resources, the direction of investments, and the orientation of technological development and institutional change are made consistent with future as well as present needs.”
(See also Economic Research; Environment; Law and Policy Reform; Long-Term Strategic Framework; and Nongovernment Organization Center)
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