Client countries expect ADB to become more responsive, particularly by being more flexible and offering products that are tailored better to their needs. In 2004, it launched the innovation and efficiency initiative, which aims to
| Reform Initiative |
Objectives and Scope |
Current Status |
| Refined Organizational Process and Structure |
| 1. Implement the Innovation and Efficiency Initiative (IEI) |
To reduce ADB's transaction costs to its clients; for ADB to be more results-oriented, flexible, and timely in its operations; align business to country cycles; increase efficiency; and expand and innovate financial instruments/services |
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The new approach adopted involves a more flexible determination of cost-sharing limits, and expands the eligible expenses that ADB can finance to include land acquisition and payments for rights-of-way, taxes and duties, and other expenses (such as bank charges and secondhand goods). |
Completed. The new approach was adopted in August 2005 and implementation is a continuing activity. |
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The new financial modalities and instruments, such as a multitranche financing facility (MFF), nonsovereign public sector (NSP) financing facility, refinancing facility, and local currency loan product , will provide ADB and its developing member countries (DMCs) with alternatives to better respond to their development financing needs. |
Being implemented. The new financing instruments were adopted in August 2005. The first three instruments are being implemented on a pilot basis for an initial 3-year period (1 September 2005–31 August 2008) while the local currency loan product is already an approved mainstream offering. |
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The revisions to the guidelines will
- streamline procurement processes
- harmonize ADB's regulations with other multilateral institutions
- enhance transparency
- allow greater flexibility and innovation in the procurement procedures of borrowers
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Completed. The revisions to the guidelines on procurement and consulting services were adopted in February 2006 and became effective in April 2006. |
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The improvements in the guidelines include
- increased flexibility and performance monitoring
- assessing executing agencies and country procurement capacity
- promoting country ownership
- increasing the focus on developing national consulting industries
- simplifying selection of smaller (including national) nongovernment organizations
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To enhance the effectiveness of the safeguard policies [Involuntary Resettlement (1995), Indigenous Peoples (1998), and Environment (2002)]; and ensure relevance to changing client needs and new lending modalities and instruments. |
The review of the safeguard policies is no longer being tracked under the IEI. It continues to be an ongoing exercise with the Environment and Safeguards Division of the Regional and Sustainable Development Department taking the lead. |
- Country strategies and programs (CSPs) and business processes related to processing, approvals and implementation
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The paper "Further Enhancing Country Strategy and Program and Business Processes" specifies changes to make CSPs more relevant, effective and streamlined by
- enhancing ownership, reflected in the change of the name to country partnership strategies (CPSs)
- replacing annual CSP updates with a midterm review report and annual indicative rolling country operations business plans
- subjecting project concept papers to Management review, rather than bundling them in CSPs and CSP updates as at present
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Completed. The new business processes to improve the preparation of CPS was adopted in August 2006 and has been mainstreamed in ADB operations. |
| 2. Conduct an independent assessment of the 2002 ADB reorganization and undertake follow-up actions |
- Review the 2002 reorganization
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To examine and verify if the original objective (i.e. improved development effectiveness) of ADB's 2002 reorganization has been met.
The final report of the independent assessment panel suggested a set of options and recommendations covering four major areas:
- strategic focus
- sectoral strength and resources
- quality assurance
- operational effectiveness
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Completed. The review of the 2002 reorganization was completed in November 2004. Follow-up actions were completed as of December 2006. |
- Undertake follow-up actions
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| 3. Harmonize and align practices and procedures for aid effectiveness in agreed-on areas |
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To harmonize and align ADB's operational procedures with other multilateral development banks for reduced transaction costs to DMCs and improved efficiency and effectiveness of development assistance.
The action plan covers the following areas:
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Completed. The action plan was formulated and initiated in September 2004. The initiative is a long-term activity and being pursued on an ongoing basis over time. |
- Implement the action plan
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| 4. Solve year-end "bunching" problem |
To reduce the "bunching" problem in order to maximize the effectiveness of ADB's operational effectiveness and tighten the planning and monitoring of Board schedules. |
Completed. The initiative to reduce bunching is a long-term activity. It will be pursued on an ongoing basis over time. |
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