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ADB’s Strategy 2030 Needs to be Accompanied by a Strong Results Orientation

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The Asian Development Bank’s (ADB) new long-term corporate strategy, Strategy 2030, which came into effect this year, needs to be accompanied by a strong focus on results supported by an improved corporate results framework, says the 2019 Annual Evaluation Review by ADB’s Independent Evaluation Department (IED).

Strategy 2030 will steer ADB’s approach for addressing challenges in Asia and the Pacific such as rising urbanization and demographic shifts, and tackling the unfinished development agendas of eradicating poverty, reducing inequality, and closing infrastructure gaps.

“Strategy 2030 represents an important milestone and has created great expectations. At the same time, the new strategic goals and directions still need to be properly translated into operational plans, clear and ambitious targets, and effective monitoring and evaluation,” said the Director General of Independent Evaluation at ADB Mr. Marvin Taylor-Dormond.

The review notes that the development success rate of ADB’s sovereign projects and programs is steadily improving, buoyed by the strong performance of operations in transport and energy infrastructure, and public sector management.

With 90% of sovereign operations achieving the expected development results during 2016–2018, East Asia remains ADB’s best regional performer, influenced by operations in the People’s Republic of China. The development success rates of ADB operations in South Asia, Southeast Asia, and in Central and West Asia remain around ADB’s overall success rate (77%), steadily rising since 2000. Operations in the Pacific, though improving, are still below average.

The performance of nonsovereign operations remains weak with only 56% development success rate during 2016–2018. “An improvement in the development performance of the financial sector and private equity portfolio is needed, as private sector operations will become much more prominent in the context of Strategy 2030,” said the Director of IED’s Sector and Projects Division Mr. Nathan Subramaniam. “The number of actions that ADB is currently taking to this effect are expected to achieve this objective.”

The review highlights some selected key results of ADB’s operations based on broad scope evaluations recently concluded. For instance, in the area of reducing poverty and inequality, agriculture operations have promoted inclusive economic growth and smallholder development. Yet, they could have had greater effect on rural development and food security had they focused on the complete value chains.

A country assessment revealed that contributions were made to reducing poverty and inequality by targeting infrastructure that met the needs of the poor, for example, water and sanitation projects in low-income areas. At the same time, a thematic evaluation of ADB-supported projects to improve access to finance for small and medium-sized enterprises (SMEs) found this effort tended to focus on larger firms rather than underserved ones.

Some other country assessment noted that progress was made on gender equality—which is promoted across all ADB operations—by supporting country efforts to incorporate the gender dimension into national economic and development polices and strategies, and by improving economic opportunities for women through SME operations. Similar country assessments highlighted that ADB transport operations helped women diversify their economic activities.

The sustainability of projects continues to be the lowest-ranked evaluation criteria. Lack of funds for operation and maintenance was among the critical hurdles to ensuring that ADB-supported infrastructure projects deliver benefits after they have been completed.  

To incentivize ADB’s strong performance and results, especially in the context of Strategy 2030, robust results frameworks and systems need to be in place, particularly at the country level. “Country is ADB’s central unit of analysis in Strategy 2030 and, therefore, timely and reliable reporting at this level must be ensured,” said Mr. Taylor-Dormond.

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Human Rights

Rohingya conference pledges to ‘remain steadfast’ in finding solutions to crisis

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A young Rohingya girl holds her brother outside a youth club in Cox's Bazar, Bangladesh. © UNHCR/Vincent Tremeau

A joint UN-hosted donor conference to rally international support behind Myanmar’s displaced Rohingya minority, ended on Thursday with a promise to continue engaging with concerned countries towards finding a long-term solution to their plight.

“We will continue to work together to maintain international attention on the Rohingya crisis and to shift from short-term critical interventions, to a more sustained and stable support”, said the closing statement from co-hosts the UN refugee agency (UNHCR), the European Union (EU), United Kingdom and United States.

“We are grateful to all who have participated…including those who have announced or pledged funding for the international humanitarian response, those who are supporting members of the Rohingya communities in other ways – not least by hosting them – and most importantly, representatives of Rohingya communities themselves”, the statement continued.

The appeal comes more than three years after the orchestrated violence that erupted in Myanmar, across Rakhine state, which saw hundreds of thousands of mainly-Muslim Rohingya flee their homes, in search of safety across the border in Cox’s Bazar, Bangladesh.

There are currently 860,000 Rohingya refugees in and around Cox’s Bazar, and an estimated 600,000 still in Rakhine state, who face ongoing violence and discrimination; and Malaysia, India, Indonesia, and other countries in the region, are together hosting nearly 150,000 Rohingya refugees.

Voluntary, safe, dignified return

“The voluntary, safe, dignified, and sustainable return of Rohingya refugees and others internally displaced to their places of origin or of their own choosing in Myanmar, is the comprehensive solution that we seek along with Rohingya people themselves”, the joint communique stated.

“To that end, we underscore the Secretary General’s call for a global ceasefire and the cessation of fighting to enable safe and unimpeded humanitarian access to all communities in need of assistance.”

The co-chairs urged Myanmar’s Government to resolve the crisis, and “take steps to address the root causes of the violence and displacement”, creating the conditions that would allow for sustainable returns.

“This includes providing a pathway to citizenship and freedom of movement for Rohingya, guided by the Advisory Commission on Rakhine State’s recommendations and encouraged and supported by countries in the region. Myanmar must provide justice for the victims of human rights abuses and ensure that those responsible are held accountable”, the statement continued.

Expressing thanks and support to the Government and people of Bangladesh, the co-chairs stressed that increased support for Rohingya, must go hand-in-hand with increased support for host communities.

“While we continue efforts to secure long-term solutions, a focus on more sustainable response planning and financing in Bangladesh, could more effectively support the government’s management of the response and maximize limited resources to benefit both Bangladeshi and refugee communities.”

$600 million pledged

The co-chairs announced new pledges of around $600 million in humanitarian funding, which significantly expands the nearly $636 million in assistance already committed so far in 2020 under the Bangladesh Joint Response Plan and the Myanmar Humanitarian Response Plan.

The crisis is having a “devastating effect on vulnerable members of Rohingya communities, particularly women and children who require gender and age-sensitive interventions” said the co-chairs, leading to vulnerable refugees “desperately attempting to reach other countries in the region.

UN Children’s Fund (UNICEF) Executive-Director, Henrietta Fore, said that thanks to Bangladesh and generous donors worldwide, UNICEF and other UN agencies such as UNHCR, migration agency IOM, World Food Programme WFP, and many NGOs, continue to serve and support vulnerable Rohingya children.

In addition to providing vital services such as health, nutrition, and sanitation, education is “critical for young Rohingyas to build better futures. And to one day voluntarily return and reintegrate into Myanmar with the safety and dignity they deserve.”

Support for 170,000 Rohingya children

“We’re giving parents and caregivers the training and tools they need to support their children’s education. More than 170,000 Rohingya children are being supported this way”, she said.

“Join our call to ensure a place for Rohingya children in both countries’ education systems and programmes. They need education where they live”, she told the conference.

Ms. Fore called on donors not to forget the daily struggles of Rohingya children who remain inside Myanmar. “They’re still facing discrimination, horrifying violence and intensifying conflict every day. The fighting needs to stop so children can return to school and play, and so refugees can return home safely if they choose.”

Rohingyas themselves ‘backbone of the response’

UN Emergency Relief Coordinator, Mark Lowcock, said it was vital to recognize that the Rohingya refugees themselves have been “the backbone of the response.”

“They volunteer as health workers, they distribute masks and they help protect their communities from the pandemic. And I think we are all need to be very grateful to them and encourage them to take up this kind of responsibility.”

Highlighting again the Rohingya communities that remain in Myanmar, he said 130,000 of them remain displaced in central Rakhine State where they have been since 2012, and another 10,000 have been displaced since 2017 in northern Rakhine.

“Those people continue to have their basic rights denied, they suffer extreme hardships in Rakhine State and elsewhere”, added relief chief Lowcock.

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Development

Vietnam’s Coastline Urgently Needs New Resilience Development Strategy

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The coastline of Vietnam is increasingly exposed to natural disasters, resulting in significant human and economic losses, but current risk management measures prove inadequate. A new resilience development strategy is urgently needed ─ otherwise, additional economic growth over the next decade in the range of billions of dollars could be wiped away by natural shocks, according to a new report by the World Bank.

The ongoing devastating storms and floods that battered the central part of Vietnam are the latest evidence of a worrying trend that natural risks, which have already been substantial, are intensifying due to rapid urbanization, economic development, and climate change. Resilient Shores, a report jointly developed by the government of Vietnam, the World Bank, and the Global Facility for Disaster Reduction and Recovery released today, provides some sobering statistics on how vulnerable the coastline is and who and what are most impacted.

To ensure the sustainable development of Vietnam’s coastal zones, we cannot ignore the challenges of natural shocks and climate change. To secure prosperity, we must invest in resilience,” said Tran Quang Hoai, Director General, Vietnam Disaster Management Authority, Vietnam’s Ministry of Agriculture and Rural Development.

The report estimates that 12 million people in coastal provinces are exposed to the threat of intense flooding and over 35 percent of settlements are located on eroding coastlines. Each year, an average of $852 million – or 0.5 percent of GDP – and 316,000 jobs in key economic sectors are at risk from riverine and coastal flooding.

Public facilities and infrastructure are also at risk, which means disruption of service delivery at the time when they are most needed. Severe flooding affects directly 26 percent of public hospitals and healthcare centers and 11 percent of schools in the region. More than one-third of Vietnam’s power grid is located in forested areas, at risk of being damaged by storm-induced fallen trees.

Despite much progress over the past decade, Vietnam’s current risk management scheme still faces significant challenges. Major shortcomings the report identifies include fragmented and incomplete risk information and ineffective enforcement of related regulations such as spatial planning, building codes, safety standards and systematic maintenance of infrastructure systems. For instance, the report shows that two-thirds of Vietnam’s sea dike system does not meet the prescribed safety requirements.

If the current trends of rapid economic development in high-risk areas continue, disaster losses are bound to increase,” said Carolyn Turk, World Bank Country Director for Vietnam. “It’s time for a new approach to balance the risks and opportunities so that Vietnam’s coastal regions can continue to be an engine of growth while being resilient to shocks.

The report presents a concrete action plan in five strategic areas that needs to be rolled out immediately and decisively.

  • Strengthening data and decision-making tools by establishing openly accessible natural disaster databases, as well as asset management systems for critical infrastructure.
  • Factoring risks in zoning and spatial planning based on the best available information.
  • Strengthening the resilience of infrastructure systems and public services by upgrading such assets in the most exposed and under-protected areas and updating existing safety standards.
  • Taking advantage of nature-based solutions by tapping into the protective function and economic contribution of ecosystems in a systematic manner.
  • Improve disaster preparedness and response capacity by upgrading the early warning system, strengthening local response capacity, improving social safety nets and implementing comprehensive risk financing.

Vietnam’s diverse coastline spans over 3,000 kilometers. The coastline’s wealth of natural endowments provides livelihoods for some 47 million people or half of the country’s population. The region also bears the brunt of natural disasters that hit Vietnam regularly.

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Energy News

Impact of COVID-19 on Commodity Markets Heaviest on Energy Prices

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While metal and agricultural commodities have recouped their losses from the COVID-19 pandemic and are expected to make modest gains in 2021, energy prices, despite some recovery, are expected to stabilize below pre-pandemic levels next year, the World Bank said.

Oil prices fell dramatically in the early stages of COVID-19 and have only partially regained pre-pandemic price levels, while metal prices declined relatively modestly and have returned to levels that preceded the shock, according to the semi-annual Commodity Markets Outlook report. Agriculture prices were relatively unaffected by the pandemic, but the number of people at risk of food insecurity has risen as a result of the broader effects of the global recession.

“The impact of COVID-19 on commodities has been uneven, and could have lasting effects for energy markets,” said Ayhan Kose, World Bank Group Acting Vice President for Equitable Growth, Finance & Institutions and Director for the Prospects Group. “When declines in commodity prices are short-lived, policy stimulus can buffer their impact. However, when prices remain depressed for an extended period, policy makers need to find solutions so their economies can adjust smoothly to a new normal. Because of COVID-19, the new normal for oil-exporting emerging and developing economies arrived earlier. In the post-COVID world, these countries need to be more aggressive in implementing policies to reduce their reliance on oil revenues.”

Oil prices are expected to average $44 per barrel in 2021, up from an estimated $41 per barrel in 2020. Demand is expected to rise only slowly as tourism and travel continue to be held back by health concerns and as global economic activity is anticipated to return to pre-pandemic levels only in the year after next. Supply restraint is expected to be eased steadily.  Energy prices overall —which also include natural gas and coal—are expected to rebound sizably in 2021, following large declines in 2020, an upward revision from April’s forecast. A resurgence of a second wave of the pandemic that results in more lockdowns and less consumption, and delays in vaccine development and distribution, could lead to lower energy prices than forecast.

Metal prices are expected to post modest increases in 2021 after falling in 2020, supported by the ongoing recovery in the global economy and continued stimulus from China. A prolonged period of weak global growth would lead to lower prices than forecast.

Agriculture prices are expected to rise slightly in 2021, following an estimated 3% increase in 2020 following some shortfall in edible oil production. Concerns about food insecurity remain relevant in several emerging market and developing economies. These concerns are prompted by hits to incomes from the global recession, bottlenecks in food availability at the local level, and border restrictions that have constrained labor supply. Food price inflation has spiked in several countries.

The pandemic is only the latest in a long history of shocks to commodity markets. A Special Focus looks at the nature of commodity price shocks on 27 commodities during 1970-2019. It finds that highly persistent (“permanent”) and short-lived (“transitory”) shocks have contributed almost equally to commodity price variation, although with wide variety across commodities. Permanent shocks account for most of agricultural commodity price variability while transitory shocks are more relevant in industrial commodity prices. The varied duration of such shocks points to a need for policy flexibility.

 A transitory commodity price shock may call for stimulative fiscal policy to smooth consumption; countries that depend on exports of commodities subject to cyclical price swings may want to build fiscal buffers during the boom phase and use them in the bust period to support economic activity. In countries that rely heavily on commodities that are subject to permanent shocks, structural policies such as economic diversification and broadening the tax base may be needed to facilitate adjustments to new economic environments.

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