Support by ADB to Accelerate Graduation Kenichi Yokoyama Country - PowerPoint PPT Presentation

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) HAI score and graduation EVI score and graduation and graduation thresholds threshold threshold 2500 70 50 60 2000 40 50 1500 30 40 1000 30 20 500 20 10 0 10 Bangladesh Bhutan Nepal 0 0 Bangladesh Bhutan Nepal Bangladesh Bhutan Nepal GNI per capita GNI threshold 1 HAI score HAI threshold EVI score EVI threshold GNI threshold 2  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 Nepal Bhutan Employment-centric, Sustainable IEG & RCI Equitable, job-creating sustainable IEG & IEG Sectoral focus : Energy, institutional capacities transport, urban infra & Sectoral focus : Energy, water supply, education, transport, urban infra & Sectoral focus : Energy, finance, ANR water supply, finance, transport, urban infra & water education, ANR supply, education, ANR Thematic priorities : Governance, capacity Thematic priorities : Thematic priorities : development, CC, RCI, Governance, capacity Governance, capacity PSD, gender, knowledge development, RCI, PSD, development, RCI, PSD, solution gender, knowledge solution 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 14 12 10 12 10 10 8 8 7 8 6 6 4 4 2 2 0 0 Low High 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 Energy Transport  Customs modernization  Cross-border  Roads  Harmonization of  Railways transmission  Export-oriented  Ports standards  Improvement of cross-  Airports power border infrastructure generation  Transport facilitation 13

Disaster Risk Reduction Strategy Support initiatives  Disaster and emergency  Emergency flood damage and assistance is featured in rehabilitation Strategy 2020  Water resources project  Close integration of DRR into preparatory facility development projects to boost  Capacity development for resilience school sector reform  Climate change and DRR  Mainstreaming climate change intersection is addressed risk management in  Investment in disaster development resilience  Building climate resilience of  Capacity development and watersheds in mountain eco- knowledge solutions systems 14

3. Graduation Support for Nepal 15

Nepal’s Graduation Strategy & ADB Support Status & Strategy ADB Support  EVI criterion already met  Investment to tackle binding constraints and boost  For graduation, either productive capacities increase its per capita  Infrastructure GNI by US$770 or HAI  Human capital score by 6.17  Institutional basis  Nepal needs to:  Development vision  Tackle supply-side  Public investment capacity constraints  PPP framework  Reorient structural  Thematic priorities transformation  RCI  Promote value chains &  GESI, etc. high value exports  Partnerships/ leveraging 16

CPS (2013-2017) Structure Accelerated Economic Growth & Poverty Reduction Social Inclusion & Employment Sustainable Institutional Generation Capacities Enhanced Growth High & Thematic Priorities Risk Management Energy  GESI Tools  Good Governance  Post-Conflict Transport Sensitive Approach.  Environment & CC  Disaster & Climate  Regional Urban Infra. & Services Change Risks Cooperation & Screening. Integration Human Capital  Governance Risk  Private sector Assessment Tool development Agriculture Transformation 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 Transport Urban    Expansion of generation Strategic Road Network, Enhance access to and & transmission trans-boundary service level of WSS for connectivity, customs all infrastructure modernization   Policy, regulatory and Improve urban  Urban transport planning environment — institutional reforms (including PPPs) and management wastewater treatment and efficient urban   Catalyze private sector Further upgrade TIA transport capacity and domestic investment and  promote RCI to airports Enhance governance and institutional facilitate power trade  Institutional capacity for  strengthening, PPP Domestic consumption sustainability of assets + export 19