Strategy 2020 was approved in 2008 as ADB's main corporate-wide strategy and planning document. It provides a clear mandate and direction to ADB in its vision of an Asia and Pacific region free of poverty.

Strategy 2020 focuses on areas of ADB's comparative advantages in light of existing and emerging challenges. Reflecting these factors, the strategy promotes three strategic agendas of inclusive economic growth, environmentally sustainable growth and regional integration. To achieve these goals, five drivers of change would be embedded into ADB operations -  private sector development and private sector operations, good governance and capacity development, gender equity, knowledge solutions and partnerships. Selectivity and focus would be reflected in the targeted 80% of ADB's operational focus on five core operational areas - infrastructure, environment, regional cooperation and integration, finance sector development and education.  Support for other areas of operations, such as health, agriculture, and disaster and emergency assistance, would be selectively provided.

Strategy 2020 also sets out institutional goals to enhance ADB's human resources and skills mix, organizational structures, and client responsiveness and other operational goals, including: scaling up private sector development and private sector operations, reaching 50% of annual operations by 2020; scaling up support for environmentally sustainable development, including projects to reduce carbon emissions and address climate change; and increasing assistance to regional cooperation and integration to at least 30% of total activities by 2020.

Questions to Consider:

• Has Strategy 2020 enabled ADB to become a more effective development bank in the region?
• What are ADB's strengths and where does ADB need to improve performance?

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ADB's support for infrastructure is the main contributor to Strategy 2020's agendas. An infrastructure deficit constrains market-led growth and access to social services in most ADB developing member countries (DMCs). During the first five years of Strategy 2020 implementation (2008-2012), infrastructure operations comprised a majority of ADB operations. These operations: (i) improved the enabling environment for private sector investments, direct foreign investments, and pursuing innovations; (ii) supported inclusive growth by (a) creating jobs and economic opportunities, (b) linked the poor to markets and helped  improve access to schools, medical services and hospitals, and (c) provided access to basic services, such as electricity, water supply and sanitation, which in turn, decreased the work burden for women in rural areas and enabled children to study at home. In addition, these investments have been ADB's main contributor to the environmentally sustainable growth and regional integration agendas. Under Strategy 2020, there has been a shift to clean energy and energy efficiency projects, sustainable transport projects, and projects that support disaster and risk mitigation. Substantial investment in cross border infrastructure is also enabling progress on regional integration.

Non-infrastructure operations also support Strategy 2020's agendas. In education, there has been a shift in focus to tertiary and technical and vocational education to help DMCs increase productivity, employability and innovation. In the financial sector, regional cooperation has been emphasized through the regional infrastructure fund and regional bond market initiative. However the share of assistance for education and finance in ADB's total financing has declined during Strategy 2020 implementation. ADB's support for health, which also supports inclusive growth, has also declined, while ADB's support for agriculture, as a share of total ADB financing, has been maintained.

Strategy 2020's drivers of change are increasing reflected in ADB's operations. Good progress has been made in scaling up assistance for private sector development and private sector operations during 2008-2012. While risk management of ADB private sector operations continues to improve, tensions exist between mitigating risk while pursuing greater development impact, including in "frontier economies." Under the public private partnership (PPP) operational plan, PPPs have become an institutional priority for ADB. Good governance and capacity development is strongly embedded in country partnership strategies (CPS) and operations. Mainstreaming of gender equity has increased significantly. While progress on generation of knowledge solutions has been made, efforts are still not adequately linked to operational improvements and DMC needs. While significant progress has been made in promoting partnerships, Strategy 2020's target of having "total annual direct cofinancing exceed the value of ADB's stand-alone project financing" remains ambitious.

The perspectives emerging from the post-2015 development agenda emphasize a greater push for inclusiveness and country driven goals, which are closely aligned with Strategy 2020.

Questions to Consider:

• Has Strategy 2020's selectivity and focus led to stronger performance and better results for DMCs in promoting inclusive growth, environmentally sustainable growth, and regional integration?
• Which areas of operations are ADB strengths?
• Which areas need improvement?
• Is ADB doing enough to promote private sector development, gender equality and governance and capacity building?
• Is ADB providing the kind of knowledge DMCs need to tackle the development challenges they face?
• Is ADB's knowledge agenda helping to improve project design?
• How can ADB forge stronger partnerships with development partners and the public and private sectors to meet the needs of developing member countries?

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Rapid growth has produced fundamental changes in the Asia and Pacific region. Incomes have risen; absolute poverty has declined. By 2020, the region could account for one-third of global trade. Yet many challenges remain. Rising income and wealth disparities are a major source of concern in many developing member countries (DMCs), and have become a major issue in middle income countries. The region has the greatest number of people who are vulnerable to climate change. Many DMCs will not meet all of the Millennium Development Goals by 2015. Child malnutrition remains high and 1.9 billion people in the region do not have access to basic sanitation. Profound demographic changes are taking place. Unprecedented urban growth is testing the region's public service delivery systems.

Infrastructure access remains a constraint and financing gaps are immense and were estimated to be more than $8 trillion between 2010 and 2020. Moreover, investments in infrastructure, which were already low, further declined during the 008/09 global financial crisis and have not bounced back to pre-2008 levels. Policy and regulatory impediments, as well as weak governance, constrains infrastructure investments, especially from the private sector. As the region becomes more urbanized, provision of sustainable and affordable urban infrastructure and basic services is emerging as a key challenge. Financial systems remain undeveloped, limiting the private sector's access to credit.

There is a continued need for financing by multilateral development banks, including among investment grade DMCs. ADB can help leverage greater resources for longer term investment needs, which provide innovation, knowledge, new modalities of development assistance, financial resources, and experience to help address these challenges.

Questions to Consider:

• What are the key development challenges emerging in Asia and the Pacific?
• Is there a need for ADB to refocus to respond to these challenges?

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ADB utilizes a corporate results framework to measure the effectiveness and efficiency of its operations. The framework is built on indicators, baselines and targets to help monitor on the development progress in the region, the delivery of ADB's core outputs and outcomes, ADB's operational effectiveness; and ADB's organizational effectiveness. ADB uses this information to monitor progress, measure results, and take corrective action where required.

While the success rate of ADB projects has improved during 2008-2012, it has not yet reached the target of 80% set forth in Strategy 2020's results framework. Performance of ongoing projects improved, but recently declined due partly to a more rigorous monitoring system adopted by ADB in 2012. Delays in project startup and implementation continue to be noted and require serious attention. Procurement processes are perceived as too long. ADB is undertaking a series of measures to improve project readiness, procurement, and implementation.

Under Strategy 2020, ADB has diversified its lending instruments, including the development of the multitranche financing facility, which provides longer term support to DMCs without the commitment costs associated with standalone projects. This in turn, has strengthened ADB's capacity to respond to DMC needs.

ADB's most important asset is its staff. Strategy 2020 outlines ways to diversify ADB's talent, drawing in professional staff to implement its strategic priorities and meet clients' demands for dynamic, modern products and services. Significant staff expansion has taken place under Strategy 2020, including an increase in international women staff from 29% to 34%. More resources, including staff, have been deployed in resident missions to strengthen decentralization. However, skills shortages continue in specific technical areas.

With a greater focus on results, ADB has achieved a significant reduction in the processing time and documentation requirements for new projects under the streamlined business processes, adopted under Strategy 2020. However, with respect to project implementation and procurement, performance has not met targets. Some developing member countries (DMCs) continue to regard ADB's business process as being too slow. Some external stakeholders also view ADB as "bureaucratic and inflexible". Coordination among ADB departments and offices is needed to enable ADB resources to be better leveraged.

Questions to Consider:

• What are ADB's key strengths in terms of its institutional structure?
• What areas should ADB prioritize to improve operational performance?
• In what areas should ADB staff skills be enhanced for greater effectiveness?

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Consultations are planned for the Strategy 2020 Midterm Review with stakeholders, including government officials, representatives of civil society and non-government organizations (NGOs), in-country donors, select local government/municipal bodies, and the private sector. Stakeholder views will be carefully considered in finalizing the Midterm Review report.

The purpose of the consultation is to obtain stakeholder views on (i) ADB's implementation experience on Strategy 2020 from 2008-2012, and (ii) key issues and challenges for 2013-2020, the remaining years of Strategy 2020 and beyond.

The schedule and locations for in-country and regional consultations are indicated below.

 
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