2015 Annual Evaluation Review

Evaluation Document | 17 April 2015

This report examines ADB’s operational performance in 2014 and follow-up to evaluation recommendations. This report focuses on urban water supply and sanitation operations in a series of sustainability analysis.

The Asia and Pacific region continues to grow economically, but its regional and global challenges are also daunting. Economic growth is essential for poverty reduction in a region that is home to 700 million living in extreme poverty. Furthermore, the quality and pattern of that growth will decide who participates in it and whether it is environmentally sustainable.

To sustain quality growth, it is vital that productivity improvements complement investments. In the face of growing inequalities and the reality of runaway climate change, the region’s challenge is to generate productivity expansion, which seems to have slowed relative to that in previous decades. That means stronger results have to be achieved from investments in physical, human, and natural resources, with greater efforts made to strengthen knowledge and innovation.

For the Asian Development Bank (ADB), this calls for a two-fold approach. First, continued actions to improve the efficiency and sustainability of its investments, with respect to both the projects ADB finances, and the country programs these projects are a part of. In many ways, this is a call to return to basics, helping to ensure that projects and country programs deliver value for money. The Action Plan that followed the midterm review of the institution’s Strategy 2020 focuses on efficiency concerns, and this drive should continue.

Second, the institution needs to seize the opportunity to shift its infrastructure focus from output deliveries to generating connections that foster development effectiveness. One avenue that fits ADB’s agenda directly is a deepening of inclusive infrastructure that includes the lower income strata in an infrastructure-driven growth process. The Action Plan touches on this concern, but must go much further.

The other, equally compelling, direction is to capitalize on the infrastructure–climate axis. In view of its unique experience of infrastructure investment and climate change mitigation, few institutions are as well positioned as ADB to scale up activities in this respect. At a time when financing for straight infrastructure will be greater than ever in the region, ADB’s value addition will hinge on the niche it occupies in exploiting the infrastructure–climate link.

ADB is well-placed to carry out its innovative proposal to combine its ordinary capital resource base with its Asian Development Fund position. A crucial aspect of making the most of this opportunity is in lifting ADB’s strategy to augment development effectiveness, in addition to continuing to improve the basic quality of its operations.