8/3/2019 Asian Development Fund Operations: A Decade of Supporting Poverty Reduction
1/4
8/3/2019 Asian Development Fund Operations: A Decade of Supporting Poverty Reduction
2/4
Learning Lessons
nancing more useul. But the
challenges are growing, and there are
also vast gaps in perormance between
countries and sectors. Hence IED sees
the need or more ADF nancing in
tandem with the need to take stronger
action to improve development
eectiveness.
Highlights of Lessons
More nancingrom concessional
unds and or other nancing sourcesis
needed in Asia or poverty reduction and
environmental sustainability. Although
the past decade was marked by strong
economic growth and a reduction in
income poverty in Asia and the Pacic,
the absolute numbers o poor have
come down insufciently given a highpopulation growth. In some countries,
the numbers o extreme and vulnerable
poor have even been increasing. More
than 300 million people in ADF countries
still live on less than $2 a day. Moreover,
there has been insufcient progress
in human development and on the
non-income MDG targets. Additionally,
growing inequities and environmental
degradation present severe challenges
to the sustainability o progress. ADF
countries and others are acing the
growing impact o the worldwide
nancial and economic stress, while
climate change and related natural
disasters threaten lives, livelihoods, and
well-being. These challenges require
both substantially more nancial
resources and their more eectiveutilization.
Development eectiveness o ADF
operations needs to improve. Funding
must be matched by stronger eorts
and perormance outcomes, especially
in view o the tough challenges the ADF
countries ace. Evaluation o country and
sector assistance program evaluations
shows that physical inrastructure
investments (particularly in energy and
transport) were relatively eective in
achieving the envisaged development
outputs and outcomes, but not so the
support related to capacity development
and institutional or policy reorms.
Unless the utilization and maintenance
o assets or demand or services are
eectively addressed, inrastructure
investments will not generate or sustain
optimal economic benets. ADB needs
to make sure projects are supported
by the right reorms and capacity
development initiatives.
ADF projects were satisactory in
their relevance to country programs
but not so in their eectiveness and
sustainability and especially process
efciency (see gure ). ADB has takenmany efciency measures over the last
ew years and some improvements are
already visible in the ADF IX projects
completed by 2010. IED expects
efciency to rise urther, noting
that recently there have been ewer
project implementation delays. Project
success rates are based on the our
evaluation criteria relevance, efciency,
eectiveness, and sustainability,
but development eectiveness andoutcomes are more closely related
to the latter two. ADBs ocus now
needs to shit to more concern or
eectiveness and sustainability. Failure
to meet anticipated project outputs
and outcomes was oten due to lack o
stakeholder support and project designs
that did not adequately consider local
conditions and underlying development
problems. Project sustainability needs to
be improved through sustainability risk
Figure 1. Ratings of Completed ADF Operations by Category of ADF Eligible Countries, 20012010
Source: Independent Evaluation Department. 2011. The Asian Development Fund Operations: A Decade o Supporting Poverty Reduction in the
Asia and Pacifc Region. Manila: ADB
Blend countriesADF-only countries0
40
4080
20
60
60
% in graph reers to overall success rate o operations (% successul)
n Relevant
Percentage
ofoperationsrated
n Relevant n Sustainable n Ecient
80% 80%
66%54%
All ADF countriesBlend excluding
Pakistan
100
8/3/2019 Asian Development Fund Operations: A Decade of Supporting Poverty Reduction
3/4Learning Lessons
assessments at the project, sector
and country levels, appropriate
actions to address identied risks, and
postcompletion monitoring. More
attention or impact evaluations within
ADB would also help, and there has
been a start on this. IEDs recent study
Managing or Development Results,with recommendations accepted by ADB
Management, gives urther pointers.
Lack o institutional capacity in ADF
countries is substantially aecting
project perormance. Past support
or capacity development has not
always achieved the envisaged
levels o institutional capability or
change. Capacity constraints are
particularly severe at subnational
levels. Country-level evaluations have
ound that ADB did not systematically
assess institutional capacity and
capacity constraints or use a capacity
development strategy to guide its
assistance. The majority o capacity
development eorts involved the
provision o one-o technical assistance
rather than holistic approaches
addressing the institutional context.
A more holistic approach is required,ocusing explicitly on inclusive growth.
Not only are the results o individual
projects and their sustainability
important; also vital are their
complementarities within and across
sectorsand with reorms in policies,
administration and governance. For
example, the potential socioeconomic
benets o new or improved rural roads
were not always realized in the absence
o eorts to enhance rural incomeopportunities and improvements in
education and health acilities and
environmental services. Inrastructure
investments should also help address
lagging MDGs. However, coordination o
sectoral eorts is preerable to complex
multi-sector projects with a large
number o non-core sector components.
IED conducted case studies o 50 ADF
VIIIX projects and concluded that they
did not necessarily have to be targeted
primarily to the poor. There was little
dierence between the share o
targeted and general interventions on
poverty impact.
The environment increasinglyconstitutes a crucial challenge or Asia
and the Pacic and new approaches
need to be tested ast. The share
o projects with environmental
sustainability objectives increased
rom 8% in ADF VIII to 34% in ADF X.
Work is ongoing in ADB on several
environmental initiatives related to
climate change, clean air in Asian cities,
energy eciency, sustainable transport,
and the nexus between environment
and poverty. Unortunately, as these
initiatives are airly new, it is too early to
ully assess their results. IED produced
two evaluation knowledge bries in
this area: a 2009 IED study on the
greenhouse gas implications o ADBs
energy operations and a 2010 study
on reducing carbon emissions rom
transport projects. Management agreed
to the recommendations, leading to
action plans.
ADF plays an important part in
ADBs ambitious agenda on regional
cooperation and integration (RCI). ADF
IX donors provided essential support
or this agenda by setting aside 5%
o ADF IX resources or RCI initiatives,
and ADF X donors increasing that to
10%. ADF operations addressing RCI
increased rom 7% in ADF VIII to 31% in
ADF X. IEDs 2008 evaluation o ADBsregional cooperation assistance program
in the Greater Mekong Subregion
rated it successul and recommended
that ADB could urther improve by
(i) emphasizing the additionality in
regional benets during the design
and implementation o subregional
projects; (ii) engaging in greater policy
dialogue; (iii) supporting policy and
procedural reorms to ease sotware
constraints to derive greater regional
benets rom investments in hardware,
and (iv) paying more attention to results
ormulation, monitoring o progress, and
cost eectiveness. IEDs recent validation
o the South Asia Regional Cooperation
Partnership Strategy (20062008)Completion Report conrmed ADBs
partly satisactory rating. It highlighted
that concessional resources should be
used to mobilize other unding sources.
ADF needs to continue its special
attention or ragile countries and
situations. IED evaluated ADBs
approach to ragile countries and
situations (FCAS) in 2010. The projects
in FCAS were rated borderline eective.
However, there were some successes
rom using sector wide approaches
and private sector partnerships. The
IED study concluded that the FCAS
approach enabled ADB to provide
timely assistance to FCAS countries.
ADB needs to devise a dierentiated
approach to engage in FCAS,
depending upon the nature o confict,
ragility, and varying conditions in the
countries.
Flexibility is crucial i the ADF is to be
able to play a role in mitigating the
eects o the global economic and
nancial crises. The crisis o 20082009
aected nearly two-thirds o Asias
developing countries, a majority o them
ADF countries. There is no mechanism
to support responses to economic crises
in ADF countries. ADB responded to the
20082009 crisis with an allocation out
o the ADF commitment authority o$400 million to help the most scally
stretched ADF-only countries. In
addition, ront-loading o up to 100% o
their allocation or 20092010 provided
urther relie. However, the countries
most aected received relatively less
additional resources, in part due to the
infexibility in ADFs perormance-based
allocation.
8/3/2019 Asian Development Fund Operations: A Decade of Supporting Poverty Reduction
4/4
Learning Lessons is a synthesis o key evaluative lessons drawn
rom the experience o ADB operations and non-ADB sources.
Lessons presented in this brie are not prescriptive, and users are
advised to careully review these lessons in the context o country,
sector, and thematic conditions.
Contact UsIndependent Evaluation Department
Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
Tel +63 2 632 4100
Fax +63 2 636 2161
www.adb.org/evaluation
Written by Henrike Feig, Ganesh Rauniyar under the guidance o Walter Kolkma,Director, and Vinod Thomas, Director General, Independent Evaluation.
Disclaimer
The views and assessments contained herein do not necessarily refect the
views o the Asian Development Bank (ADB) or its Board o Directors or the
governments they represent. ADB does not guarantee the accuracy o the
data and accepts no responsibility or any consequence o their use.
About the Independent Evaluation at Asian Development Bank
The Independent Evaluation Department evaluates the policies, strategies,
operations, and special concerns o the Asian Development Bank
relating to organizational and operational efectiveness. It contributes to
development efectiveness by providing eedback on perormance and
through evaluation lessons.
Conclusions
Although the ADF nanced only a small
share o developing member countries
investment expenditures, ADF has likely
contributed to economic growth by
helping them (i) improve connectivity
through transport investments; (ii)
increase the level and reliability o powersupplies; (iii) develop legal, regulatory,
and institutional rameworks or nance
and commerce; and (iv) increase
agricultural production. This track record
is an encouraging context or nancing
development eorts.
But the circumstances o ADF countries
also call or much stronger eort to
encourage inclusive and sustainable
development. Investments needto be better geared towards the
enhanced access o smaller enterprises
to investments; improved urban,
social, and environmental services;
increased rural connectivity and
electrication; and enhanced economic
participation. Greater capacity to carry
out development eorts is an ultimate
goal, while a stronger results orientation
remains vital or ensuring a eedback
loop or stronger perormance.
Recommendations
n Seek additional nancing or ADF
operations, particularly or ADF-
only countries, to urther reduce
poverty (income and non-income)
and enable them to better cope
with vulnerabilities.
n Increase education, rural
inrastructure, water and
sanitation, and environment
operations to help achieve related
non-income MDG targets.
n Base ADF capacity development
initiatives on results-oriented
strategies or counterpart
institutions in key sectors. Avoid
one-o technical assistance and
address cross-sector issues, the
sector policy environment, legal
or regulatory powers, nancial
resources, and sta incentives.
n Strengthen ADF operations
through the adequate allocation
o technical assistance to improve
project design and country
institutional capacity. Investigate
the implications o the recent
decrease in technical assistance
allocations relative to nancial
assistance or country-level project
preparation and advisory services.
n Improve ADF operations by
adopting a proactive, holisticapproach to addressing
sustainability concerns in country
strategies and programs: (i) identiy
and mitigate risks to project
sustainability during programming;
(ii) pay more attention to the risks
to sustainability o outputs and
outcomes and their mitigation
during implementation; and
(iii) undertake post-completion
monitoring o selected projects
and programs.
References
Independent Evaluation Department
(IED). 2011. Special Evaluation
Study:The Asian Development Fund
Operations: A Decade o Supporting
Poverty Reduction in the Asia and
Pacifc Region. Manila: ADB.
IED. 2011. Special Evaluation Study:
Managing or Development Results.
Manila: ADB.
IED. 2010. Special Evaluation Study:Post-Completion Sustainability o ADB-
Assisted Projects. Manila: ADB.
IED. 2009. Evaluation Knowledge Brie:
Greenhouse Gas Implications o ADBs
Energy Sector Operations. Manila: ADB.
IED. 2010. Evaluation Knowledge Brie:
Reducing Carbon Emissions rom
Transport Projects. Manila: ADB
IED. 2008. Regional CooperationAssistance Program Evaluation: Greater
Mekong SubregionMaturing and
Moving Forward. Manila: ADB.