Support by ADB to Accelerate Graduation -...

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

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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

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1. ADB Strategy 2020 & Mid-Term Review

Actions

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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

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

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Mid-term Review of Strategy 2020

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

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“Back to Basics” Elements

ADB will focus on effectively implementing most of these “basics” so that LDCs

(and other LICs and lower MICs) graduate to higher income levels.

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2. LDCs in South Asia and Support Strategy

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

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Present Status and Approach

0

500

1000

1500

2000

2500

Bangladesh Bhutan Nepal

Per capita GNI (Atlas method) and graduation thresholds

GNI per capita GNI threshold 1

GNI threshold 2

0

10

20

30

40

50

60

70


HAI score and graduation threshold

HAI score HAI threshold

0

10

20

30

40

50


EVI score and graduation threshold

EVI score EVI threshold

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Country-specific Support Strategy


Sustainable IEG & RCI

Sectoral focus: Energy,

transport, urban infra &

water supply, education,

finance, ANR

Thematic priorities:

Governance, capacity

development, CC, RCI,

PSD, gender, knowledge

solution

Equitable, job-creating

IEG


transport, urban infra &

water supply, finance,

education, ANR



development, RCI, PSD,

gender, knowledge solution

Employment-centric,

sustainable IEG &

institutional capacities


transport, urban infra & water

supply, education, ANR



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

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)

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Strategic Directions to Support Graduation

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Infrastructure Investment

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

7

10

0

2

4

6

8

10

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BANGLADESH: Required investment to close infrastructure gap (% of GDP per year, 2011-2020)

Low High

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12

0

2

4

6

8

10

12

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NEPAL: Required investment to close infrastructure gap (% of GDP per year, 2011-2020)

Low High

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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

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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 cross-

border infrastructure

Transport facilitation

Energy

Cross-border

transmission

Export-oriented

power

generation

Transport

Roads

Railways

Ports

Airports

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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 eco-

systems

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3. Graduation Support for Nepal

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

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Nepal’s Graduation Strategy & ADB Support

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

Accelerated Economic

Growth & Poverty

Reduction

Hig

h &

Susta

inable

Gro

wth

Transport

Urban Infra. & Services

Human Capital

Risk Management

Tools

Post-Conflict

Sensitive Approach.

Disaster & Climate

Change Risks

Screening.

Governance Risk

Assessment Tool

Thematic Priorities

GESI Good Governance Environment & CC Regional

Cooperation & Integration

Private sector development

Energy S

ocia

l In

clu

sio

n

& E

mplo

ym

ent

Ge

ne

ratio

n

Agriculture Transformation 17

CPS (2013-2017) Structure

Enha

nced

Institu

tional

Capacitie

s

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

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Capacity Enhancement for Graduation

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

Support for Infrastructure Development for

Graduation

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Energy

Strategic Road Network, trans-boundary connectivity, customs modernization

Urban transport planning and management

Further upgrade TIA capacity and domestic airports

Institutional strengthening, PPP

Transport

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

Urban

• 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

Support for Education and Agriculture for

Graduation

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Education

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

Agriculture

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

Conclusion

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THANK YOU!

Support by ADB to Accelerate Graduation -...

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