Donors push for transparency in Asian Development Bank operations

by P. Parameswaran MANILA, June 8 (AFP) -- Donor countries are pushing for greater transparency and accountability in the operations of a multi-million-dollar poverty-busting fund under the Asian Development Bank (ADB). They want a key ADB department supervising the Asian Development Fund (ADF) to be made independent and have called for a revamp of the Manila-based bank's strategy to reduce poverty prevalent among 900 million people in Asia. The ADF is ADB's soft-loan-window for its borrowing members and has been replenished by 25 donor countries led by Japan, the United States and Europe every four years since its launch in 1973. In a mid-term review of the eighth ADF worth 5.6 billion dollars for the 2001-2004 period, the donors said "stronger emphasis should be given to transparency in decision-making, accountability, performance and clear and meaningful delegation of responsibilities and authority," according to an ADB official. In line with this and to improve ADB's "internal governance" the donors wanted ADB's operations evaluation department (OED) to be made independent, said Peter McCawley, who chaired the mid-term review discussions. The department currently reports to ADB President Tadao Chino but the donors want it to be directly responsible to the bank's board of directors representing the shareholders. The bank has 61 developing and developed nations as members. "The donors unanimously agreed that the OED should be independent, in line with some of the other multilateral development banks," Paul Speltz, the US Executive Director of ADB, told AFP. "Certainly, the bank management understands this," he said. Speltz said while the ADB was ahead of other development banks in some of its functions and its moves towards greater transparency and governance, the donors felt that an independent OED would act as an effective watchdog for the bank for more efficient disbursement of aid. Michele Miari Fulcis, one of the European executive directors at the bank, said in a separate interview that he was concerned over the "very high" rate of unsuccessful projects under the bank's poverty eradication programme. "Of course, you have to realise that we are not investing in Switzerland or Luxembourg but in developing countries usually under risky conditions and in places where commercial banks will not go. But my hope is that less projects are unsuccessful," Fulcis said. Speltz said the projects were in fact, at times, delayed due to the stringent conditions imposed by the bank as part of reforms crucial for better governance and transparency, which donors would not compromise. "If there is corruption or, for example, if a country does not meet the environmental standards set by the bank and by the international community, this bank will not let those monies go out," he stressed. In 2002, ADB approved 89 loans for poverty-eradication projects in more than 20 countries, including Afghanistan, Bangladesh, Cambodia, China, Indonesia, India, Nepal, the Philippines, Sri Lanka and Vietnam. Donor nations have also asked for a comprehensive review of the implementation of ADB's "Poverty Reduction Strategy," launched in 1999 as the bank's blueprint to fight the social problem in much of the region, said McCawley, who is head of ADB's think tank ADBI. The donors wanted the review to be available during the early stages of negotiations on a further replenishment of the ADF later this year, he said. Speaking on behalf of the ADB management, Kunio Senga, head of the bank's ADF secretariat, said the bank was considering taking specific actions in consultation with donors to strengthen ADF's performance. "We take the donors' concerns very seriously and appreciate the many constructive and useful views that were expressed. While there were areas where ADB has done well, there were also areas where we can do better," he told AFP. On making the bank's OED independent, Senga said ADB had taken steps to review its ro