Learning Curves

OED
July 2007

WhatRoleforADBinPakistan?
Pakistansmodernhistoryhasbeenmarkedbywarsandcrossborderconflictswithits neighbors;ethnicandculturaldivisions;feudalsocialrelationsinpartsofthecountry;a complexstructureofgovernment;threeperiodsofmilitaryrule;10changesintheleadership ofciviliangovernmentsduring19881999;erraticeconomicperformance,withperiodsof fastergrowthneithersustainednortranslatedintobettersocialoutcomes;risingpovertyin the1990s;internationalsanctionsfollowingthetestingofanuclearweaponin1998;upshots fromservingasakeyallyinthewaronterrorfollowingtheattacksof11September2001in theUnitedStates;poorgovernance;corruption;andsocialindicatorsthatcompare unfavorablywiththerestofAsia. TheconclusionsofarecentassessmentoftheperformanceofADBsdevelopmentassistance inPakistanhaveimplicationsforresourceallocations,designofoperations,program management,andbusinessprocesses.
Background empathetic,andnonprescriptive.But,ADBsbusiness processeswereuniversallyseenasslowand cumbersome.ThePakistanResidentMission(PRM) wasdeemedtolackauthorityandsectorexpertise.

Pakistanhasprovidedachallengingcontextfor development.Notwithstanding,itremainsamajor clientoftheAsianDevelopmentBank(ADB).Asof PerformanceRatingsbySector December2006,ADBsportfoliohad80activepublic sectorloans,morethanthreetimesasmanyasthe S PS U WorldBank,whichhasmoreinternationalstaffand Energy(Power) Agriculture& Health, Natural Nutrition,& Transport& threetimesasmanynationalofficersinitsresident Resources Social Communications mission.ADBsportfoliocovers10sectorsandabout30 Protection (Roads) Education subsectors,includingmanymultisectorprojects.In2006, Finance WaterSupply, theOperationsEvaluationDepartmentconductedthe Sanitation,& Law,Economic Waste Management,& firstcountryassistanceprogramevaluationofADBs Management PublicPolicy 1 Thestudy operations,coveringtheperiod19852006. Legend:PS=partlysuccessful,S=successful,U=unsuccessful. wasinformedbypriorsectorevaluationprogram evaluationsofthesocialandroadssectors. ThestudyratedtheperformanceofADBs SummaryofFindings operationspartlysuccessful.Performancevariedby sector.Operationsinpowerandroadswererated InkeepingwiththeGuidelinesforthePreparation successful.Thoseinagricultureandnaturalresources; ofCountryAssistanceProgramEvaluationReports, education;finance;andlaw,economicmanagement, ADBssuccesswasassessedintermsofstrategic andpublicpolicywereratedpartlysuccessful.The positioning,institutionalpositioning,valueaddedto programsinsupportofhealth,nutritionandsocial developmentresults,andsectoralperformance.The protection;andwatersupply,sanitation,andwaste firstthreeperspectivesledtoatopdownassessmentof managementwereratedunsuccessful.Nosector whetherADBhaddonetherightthing.Thefourth programachievedahighlysuccessfulrating.The embodiedabottomupapproachqueryingwhether studyprovideddetailedsectorassessmentsin ADBhaddonethingsright. supplementaryappendixes. ThestudyinvestigatedclientperceptionsofADBs performance.TheseviewedADBasresponsive,flexible,
Operations Evaluation Department Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Tel +63 2 632 4444; Fax +63 2 636 2444; evaluation@adb.org; www.adb.org/evaluation/

ThestudyconcludedthatADBhastoomanyloans intoomanysectorsandsubsectors,givenstaffand technicalassistanceresourcesandtherequirementsof itsbusinessprocesses.Astrategythatproducesa desirableleveloffocusorcoherencewasneeded, togetherwithfirmstrategicmanagement. Recommendations Intheabsenceofamajorincreaseinthenumberof staffassignedtosupportoperationsinPakistan, ADBshouldreducethenumberofsectorsand subsectorsitisinvolvedin.Anappropriatescenario wouldbefourcorelendingandtwocore nonlendingsectors,withamorefocusedapproach withinthesesectors.ADBshouldprogressively reducethenumberofactivepublicsectorprojectsin itsportfolio. ADBshouldstartamajorbuildupinitsprivate sectoroperationsinPakistaninamannerthat createssynergieswithitspublicsectoroperations.

countryleadership,albeitwithsupportivefunding providedfromresourcescurrentlyallocatedto projectpreparatorytechnicalassistance. IfADBincreasesPRMstaffresourcessignificantly, greatereffortsareneededtoensurecompliancewith theResidentMissionPolicyforfullinvolvementof residentmissionstaffinprocessingprojects. Similarly,andsubjecttothesameproviso,the delegationofprojectadministrationneedstobe accelerated,andprojectsshouldbedelegatedas soonaspossibleafterapprovalbeforetheyruninto implementationproblems. Tocomplementthewithinprojectfocuson corruption,ADBneedstoensurethatitunderstands thenature,extent,anddriversofcorruptionineach sectorinwhichitengages.Theaimistoensuring thatprojectdesignand/orseparateinitiatives incorporateeffectiveanticorruptionmeasuresatthe sectororcountrylevel.Overcomingcorruptionis likelytoinvolvegreateruseofcountrysystems (particularlyforprocurement)andcapacity developmenttoimplementthese.

Thebalanceneedstobeadjustedbetween(i)lending; and(ii)economic,sector,andthematicworkand policydialogue.Thesecondelementshouldbe Therecommendationsmadeaspartofthesector emphasizedmoretoensurethatoperationsare assessmentscontainedinthisstudyshouldbe underpinnedbyamorerigorousanalysis,andthat consideredwhenthenewcountrypartnership ADBbecomesrecognizedasaleadingsourceof strategyisformulated. ideasinitssectorsofcorefocus.Thecoresectorsand Feedback theallocationoftechnicalassistanceresources shouldbealignedbetter. ADBManagementsResponseacceptedthatthree decadeswithnotrendimprovementpointedtothe StaffresourcesallocatedtoPRMneedtobealigned criticalneedtostrengthenresultsandeffectiveness. withtherequirementsoftheprogram.Atleasttwo Improvedimplementationmightbemadeapillarofthe sectorexpertsareneededforeachcoresectorof newcountrypartnershipstrategy,withattendant engagement.Theneedformoreanalystlevel springcleaning.Itagreedwiththegeneralthrustand supportshouldbeinvestigated.Inadditiontomore staffresources,greaterauthorityshouldbedevolved recommendationsofthestudy.TheChairsSummary toPRM,withthecountrydirectorempoweredtoact oftheDevelopmentEffectivenessCommittee Discussionsemphasizedclientperceptions,stocktaking, onmostmatters.Asaquickfixtotheproblemof sectorprioritization,propoorapproaches,private inefficientbusinessprocesses,procurementand sectoroperations,capacitybuilding,projectprocessing, safeguardspecialistsshouldbeassignedtoPRM. delegationofauthority,andknowledgemanagementas Theincentivesforinternationalstafftorelocateto keyelementstowardpreparationofanewcountry PRMneedtobereviewedtoensureanadequate partnershipstrategy. poolofcandidatesforvacancies.Similarly,ADB mustbecompetitiveinitsremunerationpoliciesfor 1 ADB.2007.CountryAssistanceProgramEvaluationfor nationalofficers. Pakistan.Manila.Available: ThewayADBfundedprojectsareprepared http://www.adb.org/Documents/CAPES/PAK/CAPE (includingtheuseofprojectpreparatorytechnical PAK2007/CAPEPAK2007.pdf assistance)shouldbereviewedtoleadtogreater
Learning Curves available @ www.adb.org/evaluation/ Team Leader: Keith Leonard; Tel +63 2 632 4119 rkleonard@adb.org