Welcome Remarks at the ADB-AusAID Forum on Building Resilience to Fragility in Asia and the Pacific

Welcome Remarks by ADB President Takehiko Nakao on 6 June 2013 at the ADB-AusAID Forum on Building Resilience to Fragility in Asia and the Pacific in Manila, Philippines

(as drafted)

Introduction

Distinguished guests, honorable participants, ladies and gentlemen: good morning.

It is my privilege to welcome you to this forum on building resilience to fragility in Asia and the Pacific. I appreciate the presence of all the distinguished delegations here today. And I would like to thank our co-hosts for this Forum, the Australian Agency for International Development.

The Forum will build on the outcomes of the International Conference on the Post-2015 Development Agenda which adopted "Dili Consensus" in February this year and the International Dialogue’s Washington Communiqué on Peacebuilding and Statebuilding in April. It will also reinforce the New Deal for Engagement in Fragile States which was proposed by the g7+ group of countries in 2011.

Our objective today is to learn from each others’ experiences so that we can respond better to the needs of the countries that suffer from fragility and conflict. To start off the discussion, I would like to share some of ADB’s experiences in responding to the challenges of fragility and conflict.

Challenges and ADB responses

Fragile and conflict-affected countries suffer from repeated cycles of political instability and criminal violence, faltering growth, and stagnant human development. Most of these states are far from achieving the Millennium Development Goals. There is also a need for us to consider subnational levels of fragility and conflict.

About 1.5 billion people in the world are affected by conflict and fragility, and the world’s poor are increasingly concentrated in fragile and conflict-affected states. In response, about 30% of annual global Official Development Assistance now goes to countries with fragile and conflict-affected situations. But ensuring the effectiveness of ODA in such countries is a major challenge.

ADB places a high priority on supporting developing member countries that face fragility and conflict. In 2007, ADB adopted its Approach to Weakly Performing Countries. The terminology has changed – we now use the term Fragile and Conflict Affected Situations or FCAS. However, this 2007 Approach is still valid today. ADB’s Long-Term Strategic Framework, Strategy 2020, adopted in 2008, also emphasizes ADB’s commitment in responding to the challenges of FCAS.

At the 4th High Level Forum on Aid Effectiveness held in Busan in 2011, ADB endorsed the New Deal for Engagement in Fragile States. The concerns of countries experiencing fragility and conflict are also a special theme of the Asian Development Fund XI, covering 2013-2016. This year, we adopted a new Operational Plan for FCAS to step up our efforts to work in these countries.

Lessons learned by ADB

Based on ADB’s experience, I would like to highlight five lessons that should underpin our support for fragile and conflict-affected countries.

First, we believe it is particularly important for us to have a deep understanding of the local context in designing country strategies and actual projects. Each fragile and conflict-affected country faces unique challenges, and often has very complex and delicate political and economic dynamics. ADB’s country-led model for developing a country partnership strategy requires a sound diagnosis of the distinctive binding constraints to inclusive growth and poverty reduction. For example, in Nepal, ADB adopted a conflict-sensitive approach to development using a peace building filter to identify the potential risks related to social conflict and the opportunities for enhancing peace; in the Pacific, analysis of the political economy before advocating economic reforms helped in consolidating understanding of the local contexts.

Second, we need to be highly selective in terms of the sectors we work in. And once we have determined what these will be, we have to make a long-term commitment to remain in those sectors. Fragile and conflict affected countries often lack capacity, and institutions are poorly developed. Therefore, our assistance must always include efforts to build capable and legitimate institutions, or to support "state building." In Timor Leste, for example, ADB has consistently been supporting the road sector to unite the country and contribute to the country’s efforts in statebuilding.

Third, we must remain flexible to respond effectively to the unique challenges in fragile and conflict-affected countries. We have to be creative and innovative in developing the country partnership strategies, and in designing and implementing projects. We should not shy away from considering exceptions to existing rules and procedures to respond to the actual situations on the ground. In Afghanistan, for example, we used turn-key contracts or design/built contracts to implement large infrastructure projects rather than separating consultancy and construction, which is common in most ADB-funded projects elsewhere. We have to focus on delivering actual outputs and development outcomes to benefit people living in fragile and conflict-affected countries.

Fourth, it is critical to promote broader ownership of our assistance - not only by the government, but also by civil society, the private sector and development partners. Assessments of the causes and features of fragility and sources of resilience - led by the country and supported by civil society - are critical. They help us to better understand the local context, and help build country leadership and ownership to transit out of fragility.

Lastly, strategic partnerships are critical for achieving effectiveness and sustainability of our assistance. For example; ADB's field presence in Pacific countries has increased through the establishment of development coordination offices. Some of these are shared with the World Bank. With the exception of Nauru and Tuvalu, we now have a network of such development coordination offices in all our member states in the Pacific.

Conclusion

Ladies and gentlemen, as we seek to build resilience to fragility and conflict in Asia and the Pacific, important challenges are ahead of us. We need to integrate the concept of peace and state building into our development efforts. And we have to identify concrete and constructive directions for the future so that we can ensure the effectiveness of development assistance. The five lessons I have highlighted today - deep understanding, selectivity and commitment, flexibility, broad ownership and strategic partnerships - will continue to guide ADB’s efforts as we pursue this critical challenge.

I wish all of you a productive and lively discussion.

May I now invite the Honorable Mustafa Mastoor, the Deputy Minister of Finance for the Government of Afghanistan to give the keynote address.

Thank you.