2017: A Year of Achievement and Innovation - Takehiko Nakao | Asian Development Bank

2017: A Year of Achievement and Innovation - Takehiko Nakao

Speech | 15 December 2017

Remarks by ADB President Takehiko Nakao at the ADB Staff Appreciation Event, 15 December 2017, ADB Headquarters, Manila, Philippines

Good afternoon. Thank you for joining me today. I would like to offer my appreciation for the commitment and hard work of all ADB staff during this year, both here at HQ and in our field offices. I would also like to thank the Board for their strong support.

In a few minutes, I will present long-service awards to staff who have reached impressive milestones in their careers at ADB. But first, let me reflect on ADB’s achievements in 2017.

1. What we have achieved

First, we started the year with the successful merger on 1 January of our Asian Development Fund (ADF) lending operations with the Ordinary Capital Resources (OCR) balance sheet. A large number of staff contributed to this unique achievement, which other multilateral development banks want to model after. This merger will allow ADB to deliver much higher levels of assistance to our developing member countries (DMCs) for years to come without seeking a capital increase.

Second, supported by the merger, we are on track to deliver yet another record year of operations (lending and grants). Total ADF and OCR approvals in 2017 will reach $19.1 billion, an increase of 9% from $17.5 billion in 2016. Of this, nonsovereign approvals will be $3.2 billion, an increase of 26% from $2.5 billion in 2016. In our new performance measure of commitments, loans and grants will be $19.4 billion.

Sector and thematic groups have provided a lot of new ideas for projects and programs. OPPP (Office of Public–Private Partnership) now has an increasing number of mandates for transaction advisory services.

Disbursements and cofinancing fell short of our targets. Disbursements are essential to make a difference on the ground. Cofinancing and catalyzation is a much-discussed strategy in the international community to realize the Sustainable Development Goals. While we have already made a lot of efforts, we must come up with additional concrete measures to scale up disbursements and cofinancing, keeping abreast with approvals and commitments.

To scale up our operations with quality, we need to have stronger staff resources and an enabling budget. Today, the Board approved the 2018 budget. It provides for an increase of 75 positions in 2018. As discussed in the Budget paper, another 105 positions are expected in 2019 and 2020.

Third, ADB’s funding side also made large strides this year. We stepped up our efforts to raise local currency funding to meet the growing demand for local currency loans. ADB’s Indonesian rupiah bond was the first bond issue from a multilateral development bank of which Indonesia is a shareholder. ADB also offered new thematic products such as the gender bond and health bond.

Fourth, we delivered many quality knowledge works in 2017. We published two high-impact publications. The first was Meeting Asia’s Infrastructure Needs, which has been widely quoted by media, academics, and other international institutions. The second was A Region at Risk: The Human Dimensions of Climate Change in Asia and the Pacific.

As part of our knowledge work, we hosted such important events as the Asia Clean Energy Forum and Regional Cooperation and Integration Week. To step up regional cooperation efforts, we helped CAREC (Central Asia Regional Economic Cooperation) and SASEC (South Asia Subregional Economic Cooperation) prepare their long-term strategies, CAREC 2030 and SASEC Vision, each of which was endorsed by respective ministerial meetings this year.

More departments now provide important knowledge works. OGC (Office of the General Counsel) supported the Legal Literacy for Women Project. OAI (Office of Anticorruption and Integrity) has begun to provide assistance to DMCs to meet international anti-money laundering and tax integrity standards. TD (Treasury Department) held a forum on how to manage the investment of foreign exchange reserves. ORM (Office of Risk Management) held seminars on risk management for SME (small and medium-sized enterprise) lending.

Fifth, in the area of external relations we achieved a lot this year. Together with our partners around the world, we celebrated 50 years of ADB’s development work. ADB’s history and Asia’s development narrative over the past 50 years are presented in our history book published in May this year.

Sixth, ADB launched major reforms to its procurement policy to enable faster and more flexible procurement approaches. The reforms will support quality and innovation in our projects including through the use of advanced technologies.

Seventh, we are implementing major IT and Organizational Resilience reforms. Office 365 has been rolled out. The offshore disaster recovery site was established in Geneva, Switzerland. We are modernizing the IT systems for institutional procurement and HR. We are transforming our disbursement system by replacing the mainframe and changing the way we work.

Taking this opportunity, I want to repeat the importance of our One ADB approach. Collaboration between departments, between headquarters and resident missions, and between sovereign and nonsovereign operations is critical to making ADB stronger, better, and faster. The nonsovereign Samruk Energy Project in Kazakhstan showcases how PSOD (Private Sector Operations Department) and regional departments can work together as One ADB.

2. Innovative approaches by ADB

ADB’s competitive advantage lies in combining finance with innovative approaches to development. I would like to highlight some noteworthy innovations in our operations this year.

First, ADB is adopting advanced technology in our agricultural projects. Satellite data and remote sensing combined with upgraded information systems are employed to improve irrigation in Indonesia and Pakistan. ADB is also testing climate-smart agriculture practices in Bangladesh, leading to 10% higher rice yields while reducing methane emissions by 40% and water use by 20–30%.

Second, ADB is piloting new approaches to the social sectors. In Mongolia, ADB is working with the government to improve the targeting and efficiency of its comprehensive social protection programs. In May, ADB joined the IMF and other development partners to support a major adjustment program, under which ADB-led social welfare reforms are enabling Mongolia to maintain high levels of human development.

Third, we are taking a regional approach to assisting Pacific island countries. A regional disaster resilience program for Samoa, Tonga, and Tuvalu will enable contingent financing. We hope more countries will join this program. We have set up a Pacific Renewable Energy Investment Facility to support small-value projects more quickly and with lower transaction costs.

Fourth, we are more innovative in using technical assistance loans. A $100 million TA loan to the Philippines will help the government prepare and deliver infrastructure projects under its Build Build Build program. This follows similar TA loans to Indonesia and Sri Lanka in 2016.

Fifth, as part of international efforts to use country systems for aid effectiveness, in this year’s Solar Transmission Sector Project in India, the safeguard and procurement systems of the executing agency, POWERGRID, will be used.

As I said in the Town Hall Meeting in September, incorporating advanced technologies and innovative approaches involves certain risks. I would like to stress that even if there are some setbacks as you try to bring in new ideas, your efforts will be appreciated.

3. Continued reforms in managing human resources

ADB is fully reliant on staff to deliver our mission. I want to thank staff for your feedback on many HR reforms. The success of these reforms will strongly depend on your understanding and inputs.

I would like to discuss several important HR initiatives.

A new Mobility Framework is being implemented to support the optimal use of human resources in the spirit of One ADB. It will give more opportunities to staff for career development. The framework includes an annual rotation exercise and the expanded use of short-term assignments.

The Performance Management system is being strengthened in ADB. This includes 360-degree feedback to all IS 7–10 managers, more frequent performance feedback, and stronger recognition of collaboration and innovation.

The Respectful Workplace initiative is in place. The special unit for this purpose has been in operation for 10 months now. Mandatory training was launched in October, for all staff, to promote appropriate behavior in the workplace. We issued a revised Code of Conduct, which for the first time is consolidated into one single document.

We are making progress in improving gender balance within ADB. The representation of women among International Staff increased to a new high of 35 percent in 2017. It will only be through persistent action that we will achieve our target of 40% by the end of 2022.

Recruitment has accelerated through batch and advanced recruitment and streamlined processes. ADB recruited an all-time high of over 270 new staff this year.

Flexible work arrangements can be beneficial both to the organization and to individuals. Work from Home guidelines were updated and an online system was introduced to make it easier to use.

Developing and nurturing effective leaders remains a key priority. I am delighted that 111 staff participated in leadership training programs this year. Managers should demonstrate strong communication and team-building skills. They should champion collaboration between teams and between departments.

Comprehensive pension reforms were adopted this year, including the establishment of a Defined Contribution Plan.

It goes without mentioning that ADB’s strength lies in its diverse and dedicated workforce, comprising different nationalities, academic backgrounds, and work experiences. Whether we can continue to reform ourselves to fulfill our mission, and how much we will be needed and respected in the region, depends on us.

4. Connecting to the next year

I am sure you will agree with me that we achieved a lot in 2017. The next year will be another productive one.

In May, we will host the ADB Annual Meeting in Manila, and preparations have already begun. This will be an important opportunity to reaffirm our commitment to development in Asia and the Pacific and further deepen our engagement with our host country, the Philippines.

We will finalize Strategy 2030 in 2018. We will continue to consult all our stakeholders, including civil society. Inputs from staff are welcome.

Let me end by thanking again all our staff, here and in our field offices, for your hard work, commitment, and contributions to our achievements over the past year.

I wish you and your families all the best this holiday season.