Address at ADB Country Directors Forum 2018 – Takehiko Nakao | Asian Development Bank

Address at ADB Country Directors Forum 2018 – Takehiko Nakao

Speech | 21 August 2018

Address by ADB President Takehiko Nakao at the ADB Country Directors Forum 2018 on 21 August 2018 at ADB Headquarters, Manila, Philippines

I. Introduction

Good morning.

I am pleased to welcome you to the Country Directors Forum 2018. This annual gathering is an important opportunity for country directors (CDs) to learn about institutional developments and for CDs to share their knowledge and experience.

The overall theme of this year’s meeting is operationalizing Strategy 2030. I would like to share with you today my thoughts on Strategy 2030 as well as the role of CDs in implementing the strategy. I will also talk about the steps we are taking to enable staff to meet the high expectations set out in the strategy.

II. ADB under Strategy 2030

Over the past half century, Asia and the Pacific has made great progress in poverty reduction and economic growth. Yet, many challenges remain and emerging trends such as rapid technological change, urbanization, and changing demographics present new opportunities and challenges.

Under the strategy, we will sustain our efforts to eradicate extreme poverty and expand our vision to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. Our aspirations under Strategy 2030 are aligned with major global commitments such as the Sustainable Development Goals, the related Financing for Development agenda, the Paris Agreement on climate change, and the Sendai Framework for Disaster Risk Reduction.

The demands of developing member countries are more complex and sophisticated than ever before. Their expectations of ADB are very high. ADB will add value to our developing member countries by combining finance, knowledge, and partnerships, and increase our role as a project developer. 

Infrastructure will remain a key priority in our operations with a focus on quality and sustainable infrastructure investments with good attention to social and environmental impacts. We will expand interventions in social sectors such as education, health, and social protection. And, we will promote the use of innovative technologies in all our operations. 

Taking this opportunity, I would like to draw your special attention to two important aspects of Strategy 2030, namely climate change and disaster resilience, and gender equality. This year, the world has experienced extreme weather events like heatwaves, drought, heavy rainfall, and floods, which can be associated with climate change. We must act quickly on mitigation and adaptation. ADB is playing an important part in mobilizing $100 billion a year by 2020 to fund developing countries’ efforts regarding climate change. Also, we should enhance efforts to incorporate gender elements in any kind of ADB work, as discussed in Strategy 2030.

At the corporate level, we are preparing operational plans for the seven operational priority areas highlighted in the strategy and will prepare 15 sector and thematic operational frameworks. We are also preparing a digital technology action plan for operations, and developing a new corporate results framework that will measure progress in implementation.

III. Role of country directors in implementing Strategy 2030 

Country directors (CDs) represent all of ADB in country; not just our regional departments, although their reporting lines are to regional departments. You and the staff at resident missions (RMs) have a crucial role to play in implementing Strategy 2030 at the country level.

Let me highlight 10 key areas under the strategy where CDs will play a central role. 

First, Strategy 2030 adopts a country-focused approach. Our developing member countries are highly diverse, requiring us to follow differentiated approaches that address specific local circumstances. Under Strategy 2030, CDs must understand and respond to each country’s particular needs. 

Second, we will exercise selectivity at the country level, using the country partnership strategy (CPS) to define ADB’s operational focus in each country. The focus of the CPS will reflect ADB’s comparative advantage and ability to bring value addition. CDs will play a key role in shaping the CPS in line with the new strategy.

Third, to address the complex problems facing our developing member countries, and their high expectations, we will deliver integrated solutions that combine expertise across a range of sectors and themes and through a mix of public and private sector operations. This is supported by our new procurement policy which enables greater innovation and customization in procurement solutions. CDs will be expected to lead the development and implementation of multi-sector projects. 

Fourth, to deliver these integrated solutions, we need to make full use of our collective and diverse skills through a One ADB approach. We will continue to make efforts to break down silos between our public and private sector operations, and between sectors and themes. The initiative and leadership of CDs, as well as heads of department, is vital here. 

Fifth, as ADB scales up support for private sector operations, RMs will play an increasingly important role. CDs need to build their understanding of private sector operations to support its growth. PSOD (Private Sector Operations Department) and OPPP (Office of Public-Private Partnership) need to keep CDs well-informed of operations in their country and involve them in their work. 

Sixth, Strategy 2030 enhances focus on resource mobilization and catalyzation to meet the large financing needs of our client countries. The role of CDs in building strong relationships with development partners at the country level is fundamental for strengthening resource mobilization efforts. CDs should have upstream regular dialogue with authorities to explore cofinancing opportunities early in the project cycle. CDs also should coordinate closely with the IMF and other multilateral development banks (MDBs), especially regarding policy-based lending. 

Seventh, we must strengthen ADB’s role as a knowledge provider, working closely with developing member countries to identify their needs and produce the most relevant knowledge products and services. CDs should lead sustained dialogue with country authorities, drawing on ADB’s knowledge assets. CDs should also consider how knowledge partnerships with academia, the private sector, and think tanks can be bolstered in this dialogue.

Eighth, innovation will be increasingly important in addressing the complex problems our clients face. CDs must drive the innovation agenda within their respective country programs. CDs should also encourage innovative ideas by their staff.

Ninth, CDs must promote and raise awareness of Strategy 2030 with counterparts and stakeholders. In general, I expect CDs to be more visible in our developing member countries, including through active and confident engagement with the media. As long as the message is in line with the broad idea of ADB, you can speak more freely and candidly regarding ADB’s operations and strategy in the country.

Tenth, I expect CDs to pay close attention to the evolving economic and political context, and respond quickly to changing needs and circumstances. We should continue to closely look at such issues as the impact of monetary policies of developed countries on capital flows, trade friction between countries, and debt issues in several countries. On the political front, there are new governments in Malaysia, Timor-Leste, and Uzbekistan, in addition to one forming in Pakistan. There will be many important elections this year and next, including in Fiji, India, and Indonesia. It is encouraging that we re-started lending to Thailand, with a certain scheme to mitigate foreign exchange risk. Malaysia may also come back as a borrower. 

IV. Enabling the organization and staff to deliver Strategy 2030 

To meet the ambitions of Strategy 2030, ADB will intensify its efforts to build a stronger, better, and faster organization. The role of leaders at all levels, including CDs, is to drive the necessary changes. To do this we must harness the full talents of our staff as they are our most valuable asset.

Let me highlight 7 areas where ADB is taking steps to strengthen our organization, including RMs and our human resource management. Your role will be key in all of these reforms. 

First, the results of the 2018 Staff Engagement Survey (SES), announced yesterday, provide valuable information to help us improve our organization. In addition to showing an overall increase in the level of Sustainable Engagement, there was improvement in 12 out of 18 categories, including Leadership and Management, Performance Evaluation, Communication, and Career Management. These are areas where we have invested significantly since 2015.

The 2018 SES also identifies areas where improvements are still needed. These include Innovation, Empowerment, Working Relationships, Diversity, and Efficiency. 

It is clear from this survey that Management needs to double efforts to enhance staff engagement. Fully engaged staff bringing new ideas and passion into our work will be essential to pursuing ADB’s mission and achieving Strategy 2030. Management will establish priorities for organization-wide efforts. I expect all managers including CDs to discuss the SES results with their staff and develop concrete action plans for improvement. 

Second, we are promoting enhanced staff mobility to strengthen opportunities for career development as well as collaboration and knowledge sharing between departments. The rotation program and recently launched short-term assignment program provide opportunities for staff at headquarters and in RMs to broaden their skills and experiences in different locations, functions, and departments.

The first round of the mobility initiative was designed for IS 5 and 6 staff. As a direct result of the rotation exercise, 25 staff were rotated to different departments. This includes four staff from RMs. Outside of the mobility exercise, a number of staff and departments took their own initiative to arrange lateral transfers – this resulted in 15 staff at IS5/6 level moving laterally. Altogether, a total of 40 IS5/6 staff have moved laterally over the past 12 months. The mobility initiative is a fundamental change from the vacancy-driven movement of staff. Lateral staff movement in the past was much less. BPMSD (Budget, Personnel and Management Systems Department) is capturing lessons learned to feed into the design of the next round. 

Short-term assignments were launched in May and so far 14 assignments are underway. All staff in any location are eligible for short-term assignments. This is already proving to be a valuable mechanism for RM staff to gain experience in a different location.

Third, we are strengthening our approach to staff performance management. The new system entails a stronger link between performance review and work plans as well as more frequent feedback. I strongly encourage CDs and RM staff to take advantage of the valuable training being offered to guide supervisors and staff on how to have constructive performance discussions. The 360-degree feedback process, which commenced in 2017, is another important part of the reforms to our performance management. 

Fourth, we continue to build a diverse and inclusive workforce. ADB has zero tolerance for bullying and harassment. I expect all managers including CDs to foster a respectful workplace. We continue our efforts to support gender equality. For the first time we have attained over 35% female IS representation and now 25% of our IS 9–10 cohort is female. All managers need to continue efforts to further strengthen gender equality in our workplace and to build an inclusive culture in their teams. 

Fifth, we need to dramatically modernize our business processes and further intensify the digital transformation of our organization. Everyone has a role in identifying areas where we can reduce unnecessary bureaucracy and remove “red tape.” CDs can lead this effort in RMs. As we pursue business process streamlining, ADB is expanding its utilization of modern IT systems to enhance the organization’s effectiveness, efficiency, and resilience. 

We need to intensify our efforts to strengthen data management to ensure consistency and accuracy in data across ADB. Through the IT and Data Management Committee, we are developing standard definitions and protocols for operational data to establish a “single source of truth” and reduce manual and multiple entries of the same data into different systems. These efforts are an integral part of business process modernization and digital transformation. It is imperative that each ADB staff embraces digital technology and enhances data awareness on an ongoing basis.

Sixth, we need to strengthen our ability to harness and share knowledge across ADB. Collaboration between divisions, departments, and RMs is vital to this. This includes closer communication and understanding between operational departments, RMs, ERCD (Economic Research and Regional Cooperation Department), SDCC (Sustainable Development and Climate Change Department), IED (Independent Evaluation Department), and ADBI (Asian Development Bank Institute). Stronger digital platforms in ADB will greatly facilitate this sharing and collaboration, but changing mindsets is even more important. 

The program for the CD Forum includes a session with the IED director-general. IED plays a critical role in evaluating the outcomes of our operations. IED’s reports should be regarded as an important tool for improving how we work. The independence of IED is key. At the same time, IED’s evaluations are most effective when they fully recognize the country context and challenges faced by staff in the field. For this, there should be more two-way communication between IED and RMs, especially when IED has missions.

Finally, we will be further strengthening the role of RMs. To be closer to our clients, ADB plans to increase the number of outposted and locally hired staff in our RMs. I trust that you will regard all staff, including those outposted from PSOD (Private Sector Operations Department) and PPFD (Procurement, Portfolio and Financial Management Department), as a truly integral part of your office. Management is now starting to update RM guidelines and practices so that RMs represent and coordinate with every part of ADB.

We will strengthen our IT support for RMs and further strengthen our support for the property and security needs of RMs. We continue to implement the revised approach to Overseas Duty Station Allowances to ensure enhanced support to staff working in challenging locations. Reforms to the Group Medical Insurance Plan are being implemented to improve services for staff in RMs. In view of the growing importance of RMs, the program for the CD Forum includes a session on the evolving role of the CD. 

V. Conclusion

The role of country director is critical to One ADB and to the success of Strategy 2030. As country directors, you must lead the change, be a role model for adopting new practices and new ways of working, and support and encourage your staff to do the same.

I wish to thank you for your continued hard work and commitment.

I am now happy to take your questions and to hear any comments you may have. Thank you.