Photo: Samuel Tumiwa
Samuel Tumiwa, Advisor for Conflict-Affected Situations, discusses the need for differentiated approaches in fragile and conflict-affected situations and small island developing states, and how the new approach will improve ADB operations.

The Fragile and conflict-affected situations (FCAS) and small island developing states (SIDS) Approach, or FSA, represents a new way of doing business for ADB in its most vulnerable developing member countries, which are at risk of falling further behind their regional peers because of the COVID-19 crisis.

FCAS and SIDS face unique development challenges such as geographic isolation, small populations, single-industry dependence, and armed conflict. This leaves them exposed to the full brunt of climate change, recessions, and other destabilizing external events.

To meet its Strategy 2030 goals of improving prosperity, inclusiveness, and resilience across Asia and the Pacific, ADB requires fresh ways of thinking and operating in FCAS and SIDS. Samuel Tumiwa, Advisor for Fragile and Conflict-Affected Situations, talks about the new approach.

Why has ADB developed an FCAS and SIDS approach?

Quite simply, to improve livelihoods for the most vulnerable populations in ADB’s most fragile developing member countries (DMCs). There is no one-size-fits all formula in international development. Yet for years, ADB has been using standard ADB processes and procedures in fragile and conflict-affected situations and small-island developing states – FCAS and SIDS. This ignores that these countries require special attention in designing country strategies and executing processes such as procurement, monitoring and evaluation, and safeguards implementation. In the case of FCAS, it is usually social and institutional factors that drive fragility: weak governance, absence of rule of law, social fissures, and armed conflict. SIDS have some of the same problems, but their issues tend to be driven more by environmental and economic factors: climate change, remoteness, small size, and extremely narrow asset bases. These issues leave FCAS and SIDS particularly vulnerable to external shocks like global economic crises or the COVID-19 pandemic.

In the past, ADB has had trouble finding consistent success with its projects in these countries. The success rate of ADB projects in FCAS and SIDS is below the success rate of projects in other DMCs. Hence, a new approach is needed – the FCAS and SIDS Approach, or FSA. The FSA is “context-sensitive” in that it reframes ADB support in FCAS and SIDS around specific country contexts. The FSA contains a concrete plan of action to change the way ADB works in these countries. The components of the action plan will be institutionalized throughout ADB. Training staff to work a new way in FCAS and SIDS will be one key to the success of the FSA.

Who are the FCAS and SIDS countries?

Using a methodology harmonized with other multilateral development banks, ADB classifies 11 DMCs as FCAS: Afghanistan, the Federated States of Micronesia, Kiribati, the Lao People’s Democratic Republic, the Marshall Islands, Myanmar, Nauru, Papua New Guinea, Solomon Islands, Timor-Leste, and Tuvalu. These countries experience some degree of fragility, defined as a combination of exposure to risk and insufficient coping capacity of the state, systems, or communities.

Countries self-identify as small island developing states. There are 16 SIDS DMCs in ADB: The Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, Maldives, the Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu. Eight of these are also classified as FCAS, which places them in a uniquely vulnerable category.

What makes this approach different?

The FSA replaces the 2013 Operational Plan for Enhancing ADB’s Effectiveness in Fragile and Conflict-Affected Situations. Under the new approach, the way ADB prepares its country partnerships strategies, designs its projects, oversees their implementation, and sets and monitors performance targets will be even more tailored to the specific context of each country. ADB introduces several new protocols and tools under the FSA, including fragility and resilience assessment as part of its country programming and project planning; more flexible business processes, procedures, and practices; and context-driven and risk-informed decision making during the implementation of its projects.

Diagram: Project Cycle

The fragility and resilience assessment is designed to improve understanding of country contextual risks and will inform country partnership strategies and other country programming. These will consider all risks and factors that affect resilience – such as climate change, poverty, disaster risk management, governance, remoteness, conflict, and inequality ¬– to provide country planners with a multidimensional framework for analyzing risk. Ultimately this will ensure more productive ADB engagement in FCAS and SIDS, improve project results, and improve livelihoods.

How will the FSA be implemented?

The FSA will be implemented through an action plan built on three pillars. Pillar 1 will improve ADB responsiveness by adapting standard ADB processes and procedures to FCAS and SIDS contexts. Pillar 2 focuses on increasing institutional capacity within ADB operational departments and ensuring adequate staffing. Finally, Pillar 3 will enhance understanding of DMC contexts and the specific causes of fragility across FCAS and SIDS. The action plan will be backed by a fresh communications and engagement strategy and underpinned by a strong digital technology component.

ADB recognizes that improving development effectiveness and implementing successful projects in FCAS and SIDS contexts requires tailored approaches and differentiated skill sets. The FSA will articulate these approaches and under Pillar 1 will tailor ADB business processes and procedures to be more flexible and responsive in support of ADB planning, programming, and project implementation in FCAS and SIDS. Pillar 2 will ensure that ADB has the staff capacity to adopt these tailored approaches and execute context-driven, risk-informed decision making, while Pillar 3 will expand the knowledge base upon which the FSA is built.

Any examples of how ADB will apply the new approach?

In Tonga, ADB introduced a context-specific solution using a financing structure and strategic partnerships tailored to promoting private investment in Tonga. ADB Private Sector Operations and the Pacific Department teamed up to design and develop a credit enhancement mechanism to support the credit worthiness of power utilities, where government guarantees cannot be given. The climate-resilience project was bid to the private sector through a transparent tender process. By encouraging new modalities and working with both sovereign and nonsovereign operations, ADB is helping Tonga step into its renewable energy future.

What was the consultation process?

A series of internal and external stakeholder consultations was held as part of the FSA drafting process. The two rounds of consultations held between September 2020 and March 2021 involved more than 40 parties from at least 23 countries and more than 500 participants. Parties included DMCs, bilateral development agencies, civil society organizations, other international organizations, and multilateral development banks. Internal ADB consultations involved all key departments and sectors and thematic groups. The consultations helped make the FSA knowledge-driven, context-sensitive, and adaptable in meeting the needs of the targeted DMC populations.

How will funding resources be mobilized for the implementation of the FSA?

Most DMCs classified FCAS and SIDS are eligible for grants and concessional borrowing. Donors recently provided a replenishment to the Asian Development Fund and Technical Assistance Special Fund of about $4 billion to cover the 4-year period 2021–2024. These funds are an essential funding source for FCAS and SIDS. The current method for allocating grants and concessional loans will be reviewed to explore options to provide increase weighting for countries facing structural fragility and vulnerability into the allocation formula to increase allocations for FCAS and SIDS.

How will the FSA implementation be monitored?

Monitoring implementation of the FSA will ensure that issues are properly addressed as they arise. The FSA results framework is designed to assess the performance and effectiveness of the FSA in facilitating institutional, behavioral, and procedural changes. A broad set of 18 qualitative and quantitative indicators has been developed under the monitoring framework. In addition to the 18 indicators, action trackers will be used to monitor implementation of the action plan.

An annual FSA report on FSA achievements, adoption, and performance will be prepared. The FSA report will also include ADB’s performances in FCAS DMCs and SIDS, complementing other ADB reports.

Diagram: FSA Results Framework

ADB placed on hold its assistance in Afghanistan effective 15 August 2021. ADB Statement on Afghanistan | Asian Development Bank