Report by ADB President Takehiko Nakao to ADB Board of Governors during the 51st ADB Annual Meeting on 5 May 2018, in Manila, Philippines
Good afternoon. I am making this report on ADB’s operations in 2017 during the Business Session for the first time, based on the good advice of the Chair, Governor Dominguez.
We had a successful year. Our lending program produced strong results. We made important progress in our knowledge work and human resource management initiatives. We are sustaining efforts to be a trusted and strong partner to deliver results.
Performance in numbers
On the resource side, we started 2017 with the successful merger of our Asian Development Fund (ADF) lending operations and Ordinary Capital Resources (OCR) balance sheet. This merger allows ADB to deliver higher levels of assistance to our developing member countries.
In our new performance measure of commitments, loans and grants reached $20.1 billion, a 52% increase from $13.3 billion in 2016 and a record high. Of this, private sector operations commitments increased from $1.8 billion in 2016 to $2.3 billion in 2017, the highest level to date.
Private sector operations expanded with such ideas as inclusive business, gender, and corporate governance, and included an increased number of small but high development impact projects in frontier economies. For example, Samoa’s Solar Power Development Project was ADB’s first private sector investment in support of an independent power producer for renewable energy in Pacific island countries.
Disbursements are essential to getting projects and programs to be implemented on the ground but these fell short of our target in 2017 for disbursements. We need more efforts. ADB approved a new procurement policy to enable faster and more flexible procurement approaches. We are starting to use country systems beginning from the executing agency’s procurement and safeguards systems in such countries as India and Indonesia.
While we had a shortfall in our official cofinancing target, we have been successful in mobilizing private financing and promoting public-private partnerships (PPP). Our private sector operations mobilized $5.9 billion in commercial cofinancing, more than double our own financing. And we secured 7 new mandates for PPP transaction advisory services (TAS) in 2017, and on a cumulative basis 13 TAS mandates since our PPP office started operations in 2015. Going forward, we will take enhanced measures to crowd in private resources and cofinancing from other development partners including bilateral and multilateral.
On the funding side, ADB made large strides last year. We delivered the largest borrowing program in 2017, totaling $28.6 billion, an increase of 39% from 2016. We offered new and innovative thematic products in 2017, including health bonds and gender bonds. ADB stepped up efforts to raise local currency funding to meet the growing demand for private sector local currency loans.
We continue to evaluate our performance using our corporate results framework and publish the results in the annual Development Effectiveness Review.
ADB as a trusted knowledge partner
ADB’s competitive advantage lies in combining finance with knowledge. Sector and thematic groups, in close collaboration with our operations staff, help deliver new ideas in our projects. ADB’s new procurement policy is placing more weight on quality and innovative technologies.
We delivered many quality knowledge products in 2017. Our report Meeting Asia’s Infrastructure Needs has been widely quoted by media, academics, and other international institutions. A Region at Risk: The Human Dimensions of Climate Change in Asia and the Pacific was another important report. ADB’s history book was also published in 2017 to commemorate ADB’s 50th anniversary and share insights and lessons on the region’s economic development.
As part of our knowledge work, we hosted important events such as the Asia Clean Energy Forum and Regional Cooperation and Integration Week.
ADB’s knowledge work is a bank-wide mandate. For example, the Treasury Department held a forum on how to manage the investment of foreign exchange reserves. The Office of Anticorruption and Integrity has begun to help our developing member countries to meet international anti-money laundering and tax integrity standards. The Office of the General Counsel organized workshops for judges and other legal professionals in areas like environmental law and enhanced access to justice for women. The Independent Evaluation Department also engaged in a number of successful knowledge events.
We have emphasized the One ADB approach with a view to making this a more integrated part of our corporate culture. One ADB encourages multisector solutions, greater knowledge sharing, and collaboration between departments. The nonsovereign Samruk Energy Project in Kazakhstan showcased how the Private Sector Operations Department and regional departments can work together as One ADB.
Continued reforms in managing human resources
ADB’s strength lies in its diverse and dedicated workforce. I would like to mention some important HR initiatives.
ADB is strengthening performance management. In November last year, we introduced 360-degree feedback for all managers (IS 7–10) as part of leadership development and performance assessment.
We included stronger recognition of collaboration and innovation in annual work planning and performance assessment.
We continue to conduct leadership training programs, strengthening managers’ communication and team-building skills.
The Respectful Workplace Initiative is in place to prevent harassment and bullying. A special unit for awareness raising, training, and investigation has been in operation since June 2016. Mandatory training for all staff was launched in October 2017.
Comprehensive pension reforms were adopted in 2017, including the establishment of a Defined Contribution Plan for new hires from October 2017. This will help the long-term sustainability of the pension fund.
Regarding gender balance within ADB, the representation of women among International Staff increased to a new high of 35% in 2017. We are making progress to achieve our target of 40% by the end of 2022. Out of 15 new appointments to Heads of Department since the last Annual Meeting, 6, or 40%, were women.
Moving forward with Strategy 2030
This year we will finalize Strategy 2030, which will guide us in making the necessary changes to our approaches, operational priorities, and business processes.
Let me conclude by reaffirming my commitment to "reinvent ADB" for achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. I draw on your continued strong support.