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Support by ADB to Accelerate Graduation - UN

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Support by ADB to Accelerate
Graduation
Kenichi Yokoyama
Country Director
ADB Nepal
Presented at Kathmandu Ministerial Meeting of Asia-Pacific LDCs on Graduation and
the Post-2015 Development Agenda, 18 December 2014
1
Presentation Outline
1. ADB Strategy 2020 and Mid-Term Review
Actions
2. LDCs in South Asia and Support Strategies
3. Graduation Support for Nepal
 Country Partnership Strategy, 2013-2017
4. Conclusion
2
1. ADB Strategy 2020 & Mid-Term Review
Actions
3
ADB’s Strategy 2020
Approved in 2008
Strategic Agendas: Inclusive economic growth,
Environmentally sustainable growth, Regional integration
5 Core Operational Areas: Infrastructure, Environment,
Regional Cooperation and Integration, Finance Sector
Development, Education
3 Other Operational Areas: Health, Agriculture, Disaster
and Emergency Assistance
Cross-cutting Drivers of Change: Private Sector
Development, Good Governance, Gender Equity,
Knowledge Solutions, Partnerships
4
Mid-term Review of Strategy 2020
 Undertaken to meet the challenges of transforming Asia & Pacific
 14 LDCs in Asia Pacific Region
 Includes a 10-point program on future directions – Relevant
Actions for LDCs:
 Sharpening ADB’s Operational Focus
 Maintain focus on infrastructure (higher leverage & impacts)
 Deepen inclusiveness to reduce poverty
 Catalyze greater RCI
 Support climate change & environment
 Responding to the New Business Environment
 Expand private sector development and operations
 Mainstream knowledge solutions
 Strengthening ADB’s Capacity and Partnership
5
“Back to Basics” Elements
1. Security and political stability
2. Macroeconomic stability
3. Infrastructure investment
4. Human capital
5. Open trade and investment regimes
6. Good governance
7. Inclusiveness in the society
8. A clear and shared vision for development
ADB will focus on effectively implementing most of these “basics” so that LDCs
(and other LICs and lower MICs) graduate to higher income levels.
6
2. LDCs in South Asia and Support Strategy
7
Present Status and Approach
Per capita GNI (Atlas method)
and graduation thresholds
2500
2000
1500
1000
500
0
Bangladesh
Bhutan
GNI per capita
GNI threshold 2
Nepal
GNI threshold 1
HAI score and graduation
threshold
70
60
50
40
30
20
10
0
EVI score and graduation
threshold
50
40
30
20
10
0
Bangladesh
HAI score
Bhutan
Nepal
HAI threshold
Bangladesh
EVI score
Bhutan
Nepal
EVI threshold
 4 LDCs in South Asia: Bangladesh, Bhutan, Nepal, Afghanistan
 Country-specific binding constraints → Vision & Strategy
 ADB support is guided by Country Partnership Strategy
 lignment to national strategy, harmonization, MFDR, capacity
development
 Addresses LDC graduation criteria
 Addresses the core issues and support sought in Istanbul
Programme of Action 2011-2020
8
Country-specific Support Strategy
Bangladesh
Bhutan
Nepal
Sustainable IEG & RCI
Equitable, job-creating
IEG
Employment-centric,
sustainable IEG &
institutional capacities
Sectoral focus: Energy,
transport, urban infra &
water supply, education,
finance, ANR
Thematic priorities:
Governance, capacity
development, CC, RCI,
PSD, gender, knowledge
solution
Sectoral focus: Energy,
transport, urban infra &
water supply, finance,
education, ANR
Thematic priorities:
Governance, capacity
development, RCI, PSD,
gender, knowledge solution
Sectoral focus: Energy,
transport, urban infra & water
supply, education, ANR
Thematic priorities:
Governance, capacity
development, RCI, PSD,
gender, knowledge solution
Common Features
 Alignment with national priorities/medium-term plans
 Structural transformation to build productive capacities,
and create a diversified and resilient economy
9
Strategic Directions to Support Graduation
Infrastructure as Strategic Core
 Transport: In-country and regional connectivity
 Energy: Security at home, clean energy, efficiency, RCI
 Urban services: Quality of life, productivity
Human Capital
 Skills to raise productivity & employability
Other/ Cross-cutting key drivers/ enablers
 Agriculture, water management, climate change
 Finance
 Governance, Capacity building
 RCI: SASEC as the RCI platform – flagship program
 Private investments in infrastructure and industries
 Gender and social inclusion (GESI)
10
Infrastructure Investment
BANGLADESH: Required investment to close infrastructure gap
NEPAL: Required investment to close infrastructure gap
(% of GDP per year, 2011-2020)
(% of GDP per year, 2011-2020)
12
10
10
8
7
6
4
2
0
Low
High
14
12
10
8
6
4
2
0
12
8
Low
High
Large infrastructure financing gap in LDCs
 Public investment: Quantum and quality have to be
increased (Nepal’s capital spending is just 3.3% of GDP)
 Private investment:
 Enabling environment
 Robust legal, regulatory and institutional frameworks
→ Directly contribute to criterion 1 and 3 for graduation
11
Enhancing Human Capital
 Critical to supply competent and able human capital
 Support for vocational training, technical education and skills
development to boost jobs, productivity and income
 Ultimately helps to attract FDI & sustain high growth rate
 Addresses skills gap in the market
 Quality, management capacity and geographical balance
are at the heart of such development assistance
 TAs for sector reforms, capacity building, and social
protection
 Innovative interventions such as cash transfers
12
Regional Cooperation and Integration
 Members: Bangladesh, Bhutan, India,
the Maldives, Nepal and Sri Lanka
 Project-based initiative
 Investment:
 Over $6.3 billion since 2001 (33
projects, majority in transport sector)
 $60 million TA (capacity development
and knowledge initiatives)
 2014-2016: $3.34 billion planned
Trade facilitation
 Customs modernization
 Harmonization of
standards
 Improvement of crossborder infrastructure
 Transport facilitation
Energy
 Cross-border
transmission
 Export-oriented
power
generation
Transport
 Roads
 Railways
 Ports
 Airports
13
Disaster Risk Reduction
Strategy
 Disaster and emergency
assistance is featured in
Strategy 2020
 Close integration of DRR into
development projects to boost
resilience
 Climate change and DRR
intersection is addressed
 Investment in disaster
resilience
 Capacity development and
knowledge solutions
Support initiatives
 Emergency flood damage and
rehabilitation
 Water resources project
preparatory facility
 Capacity development for
school sector reform
 Mainstreaming climate change
risk management in
development
 Building climate resilience of
watersheds in mountain ecosystems
14
3. Graduation Support for Nepal
15
Nepal’s Graduation Strategy & ADB Support
Status & Strategy
 EVI criterion already met
 For graduation, either
increase its per capita
GNI by US$770 or HAI
score by 6.17
 Nepal needs to:
 Tackle supply-side
constraints
 Reorient structural
transformation
 Promote value chains &
high value exports
ADB Support
 Investment to tackle binding
constraints and boost
productive capacities
 Infrastructure
 Human capital
 Institutional basis
 Development vision
 Public investment capacity
 PPP framework
 Thematic priorities
 RCI
 GESI, etc.
 Partnerships/ leveraging
16
CPS (2013-2017) Structure
Thematic Priorities




GESI
Good Governance
Environment & CC
Regional
Cooperation &
Integration
 Private sector
development
Enhanced
Institutional
Capacities
Social Inclusion
& Employment
Generation
High &
Sustainable
Growth
Accelerated Economic
Growth & Poverty
Reduction
Energy
Transport
Urban Infra. & Services
Human Capital
Agriculture Transformation
Risk Management
Tools
 Post-Conflict
Sensitive Approach.
 Disaster & Climate
Change Risks
Screening.
 Governance Risk
Assessment Tool
17
Capacity Enhancement for Graduation
Vision 2030 for rapid and sustainable growth & job creation
 LDC graduation to be a medium-term vision/strategy
 Meaningful structural transformation: Robust industrial
sector and higher value added in key industries
→ Collective DP support, South-south cooperation/ twinning
Enhancing investment planning & implementation capacity
 Improved budgetary and monitoring process
 Sector investment strategies, plans & project pipelines
 Implementing agencies capacity
PPP framework
 PPP Policy and PPP Act drafted
 PPP Center within NPC → Sector PPP strategy
 PPP concession documents
18
Support for Infrastructure Development for
Graduation
Energy

Expansion of generation
& transmission
infrastructure

Policy, regulatory and
institutional reforms
(including PPPs)


Catalyze private sector
investment and
promote RCI to
facilitate power trade
Domestic consumption
+ export
Transport

Strategic Road Network,
trans-boundary
connectivity, customs
modernization

Urban transport planning
and management

Further upgrade TIA
capacity and domestic
airports

Institutional
strengthening, PPP
Urban

Enhance access to and
service level of WSS for
all

Improve urban
environment—
wastewater treatment
and efficient urban
transport

Enhance governance
and institutional
capacity for
sustainability of assets
19
Support for Education and Agriculture for
Graduation
Education
• School sector reform
focusing on access,
quality & sector capacity
• TEVT to expand
demand-driven skills
training
• Higher education in
science and technology,
to build synergy with
investments in
infrastructure
Agriculture

Implementing Agriculture
Development Strategy
with policy and
institutional reforms

Irrigation infrastructure
and institutions

Value chains with private
sector & cooperatives

IWRM, CC adaptation, &
disaster risk management
20
Conclusion
ADB MTR supports the key priorities and thrusts outlined in IPoA
2011-2020 and the proposed SDGs
•
Long-term development vision and strategy, backed by
dynamic national leadership
•
Addressing critical gaps in infrastructure (requisite & actual
investments); human capital (outcomes to attract investors)
•
Institutional bases: Enhancing infrastructure investments
(planning, implementation, asset management); Attracting
PPPs; Governance (including PFM), Anti-corruption
•
Productive capacity development: Proactive facilitation for
value chains, entrepreneurship development, etc.
•
Tapping RCI opportunities: combining investment & TA
support to incentivize integration
21
THANK YOU!
22
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