January 2021

Country Partnership Strategy and Results Framework Review This document is being disclosed to the public in accordance with ADB's Access to Information Policy.

ABBREVIATIONS ADB – Asian Development Bank ADBI – Asian Development Bank Institute CAPE – country assistance program evaluation CAPR – country assistance program review COBP – country operations business plan CKP – country knowledge plan CPS – country partnership strategy DMC – developing member country DMF – design and monitoring framework FCAS – fragile and conflict-affected situation IED – Independent Evaluation Department ISGA – inclusive and sustainable growth assessment LINK – list of indicative knowledge products and events MDB – multilateral development bank OPPP – Office of Public–Private Partnership PPP – public–private partnership PSOD – Private Sector Operations Department SDCC – Sustainable Development and Climate Change Department SIDS – small island developing states SPD – Strategy, Policy and Partnerships Department TA – technical assistance UMIC – upper middle-income country

NOTE

In this report, “$” refers to United States dollars.

Director General Tomoyuki Kimura, Strategy, Policy and Partnerships Department (SPD) Deputy Director General

Xinning Jia, SPD

Directors Jiro Tominaga, Strategy, Policy and Business Process Division (SPBP), SPD Bernard Leigh Woods, Results Management and Aid Effectiveness Division (SPRA), SPD

Team leader David Oldfield, Principal Planning and Policy Specialist, SPBP, SPD Team members Rowena Agripa, Strategy and Policy Assistant, SPBP, SPD Jane Barcenas-Bisuña, Senior Strategy and Policy Officer, SPBP, SPD

Aaron Batten, Principal Planning and Policy Economist, SPOP, SPD Angelita Cortez, Results Management Officer, SPRA, SPD Norlyn Lagsit, Associate Strategy and Policy Analyst, SPBP, SPD Lindsay Renaud, Results Management Specialist, SPRA, SPD

CPS review consultation group

Eduardo Abello, Principal Operations Coordination Specialist, Office of the Director General, Private Sector Operations Department

Erik Aelbers, Senior Country Specialist, Pacific Subregional Office in Suva, Fiji, Pacific Department (PARD)

Joven Balbosa, Advisor, Office of the Director General, Southeast Asia Department Mary Jane Carangal-San Jose, Senior Knowledge Sharing and Services Officer, Knowledge Advisory Services Center (SDCC-KC), Sustainable Development and Climate Change Department (SDCC) Pratish Halady, Principal Public–Private Partnership Specialist, Advisory Division 1, Office of Public–Private Partnership Maria Kaizeler, Senior Financial Management Specialist, Public Financial Management Division (PPFM), Procurement, Portfolio and Financial Management Department (PPFD) Jeffrey Liang, Principal Economist, Economic Analysis and Operational Support Division, Economic Research and Regional Cooperation Department Marzia Mongiorgi-Lorenzo, Principal Country Specialist, People’s Republic of China Resident Mission, East Asia Department Akmal Nartayev, Senior Financial Management Specialist, PPFM, PPFD Hanif Rahemtulla, Senior Public Sector Management Specialist, Governance Thematic Group, SDTC, SDCC Shreejana Rajbhandari, Programs Analyst, Nepal Resident Mission, South Asia Department Vivek Raman, Senior Operations Coordination Specialist (Innovation and Knowledge), SDCC-KC, SDCC Susann Roth, Principal Knowledge Sharing and Services Specialist, SDCC-KC, SDCC Shiu Singh, Senior Private Sector Development Officer, Pacific Liaison and Coordination Office in Sydney, Australia, PARD Rajesh Vasudevan, Senior Economist, Regional Cooperation and Operations Coordination Division, Central and West Asia Department

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page EXECUTIVE SUMMARY i

I. INTRODUCTION 1

II. KEY CPS REFORMS, 2015–2016 1

III. OBJECTIVES OF THE REVIEW AND KEY ISSUES TO BE ADDRESSED 2

IV. METHODOLOGY 2

A. Desk Review 2 B. Country Consultations 2 C. ADB Staff Surveys 3

V. ASSESSING QUALITY AND EFFICIENCY OF NEW CPS BUSINESS PROCESS 3

A. Quality 3 B. Efficiency 4

VI. FURTHER CPS REFORMS 6

A. Alignment of CPS with Strategy 2030 6 B. CPS Final Review 9 C. Country Knowledge Plan 12 D. Country Operations Business Plan 15 E. CPS Results Framework 17

VII. IMPLEMENTATION 22

EXECUTIVE SUMMARY In 2015, ADB reviewed and reformed the content and business process for country partnership strategies (CPS)—the main platform of ADB’s engagement with its DMCs. The reforms intended to (i) strengthen CPS content, (ii) improve background assessments and diagnostic work, and (iii) streamline the CPS business process. In 2016, ADB made corresponding procedural changes in the Operations Manual for CPS following the reforms and revised the guidelines for the CPS results framework. ADB committed to review implementation of the CPS reforms in 2019. This paper reports on the results of the review of the 2015–2016 CPS business process reforms. Particularly, the review (i) determined the extent to which the 2015–2016 reforms have improved the quality of CPSs, (ii) assessed whether the reforms have made processing CPSs more efficient, and (iii) identified additional reforms to improve the CPS business process and further align CPSs with Strategy 2030—ADB’s long-term corporate strategy. The Strategy, Policy and Partnerships Department (SPD) led the review process with inputs from a consultation group comprised of representatives from relevant departments and offices across ADB. SPD conducted desk review, country consultations and ADB-wide surveys during the review process. The review found that the 2015–2016 reforms improved the quality, value addition and efficiency of the CPS and its business process. However, the review recommends further enhancements to the CPS and its related documents—considering the new directions and priorities of Strategy 2030. In 2019, Management also committed to update the CPS results framework and provide periodic performance reporting at the country level. The enhancements to the CPS are along the following areas: 1. Aligning the CPS with Strategy 2030

(i) Strengthen the CPS country teams for a One ADB approach – The country team led by the country director will engage with other relevant departments and offices in the preparation of assessments, identification of country challenges, and the design of the CPS. The members of the One ADB team will meet at the start of the CPS process. ADB will also establish a process to update CPS implementation to the Board, which entails having the regional departments present annually the progress of CPS implementation in a session with the Board.

(ii) Enhance staff guidance on selected topics – SPD, together with relevant departments, will develop detailed guidance notes for country teams on important areas such as sharpening selectivity in the CPS, integrating sovereign and nonsovereign solutions, mainstreaming gender in the CPS document and process, and strengthening differentiated approaches, particularly for FCAS, SIDS, and UMICs. Implementation guidelines for ADB’s graduation policy will also be developed for UMICs that reach a GNI per capita threshold as defined by the International Bank for Reconstruction and Development.

2. Enhancing the CPS Final Review – The CPS Final Review will be renamed to the Country Assistance Program Review (CAPR), which reflects that ADB’s program over a particular time span and not the CPS itself, is being evaluated according to the evaluation criteria. The CAPR will also shift focus from sectors to strategic pillars and operational priorities. 3. Improving the value addition of the Country Knowledge Plan - ADB will adjust the content of the country knowledge plan (CKP) to clarify the purpose and improve its value addition.

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The purpose of the CKP is to harness knowledge as part of the integrated approach to achieve the strategic objectives of the CPS—complementing the sovereign and nonsovereign operations. It is intended to be about knowledge outcomes and not a laundry list of knowledge products and services. 4. Strengthening the Country Operations Business Plan – ADB will revise the outline and appendices of the country operations business plan (COBP) so it is more useful and informative for readers. To resolve the issues arising from the COBP being a linked document for the CPS while also having its own production cycle, the COBP will no longer be a required linked document to a new CPS. ADB will establish a One ADB monitoring mechanism for periodically assessing progress on CPS implementation and this will be integrated in the COBP process. 5. Introducing new CPS Results Framework template – A new CPS results framework template will improve alignment with Strategy 2030 and give it more operational relevance. The new CPS results framework template will consist of two main sections: one on alignment with government objectives and the other focusing on results and performance of ADB interventions based on results achieved for operational priority indicators. ADB will implement the enhanced CPS content and process in 2021.

I. INTRODUCTION 1. The Asian Development Bank (ADB) reviewed and reformed its country partnership strategy (CPS) business process in 2015–2016. The reforms had three objectives: (i) strengthening CPS content (ii) improving background assessments and diagnostic work, and (iii) streamlining the CPS business process.1 Corresponding procedural changes were made to the Operations Manual in 2016.2 2. The 2015 CPS reforms paper called for the Strategy and Policy Department (SPD) to “review the implementation progress of the reforms and their impact on the quality and efficiency of the CPS document and process” in 2019, with the intention of making further improvements as needed (footnote 1).3 ADB’s adoption of Strategy 2030 in 2018 necessitates another review of the CPS business process to ensure that future CPSs are aligned with the new corporate strategy.4 However, CPSs are still meant to improve understanding of country problems, opportunities, and priorities and the design of ADB’s support to address them. 3. ADB also revised the guidelines for the CPS results framework in 2016.5 In response to the 2019 Annual Evaluation Review by the Independent Evaluation Department (IED), Management agreed to provide periodic reporting on the development effectiveness of country programs using a traffic light system with a scorecard format.6 The results framework guidelines also require revision to (i) reflect Strategy 2030, (ii) improve the relevance of the CPS results framework through a stronger link with the corporate results framework and the design and monitoring framework (DMF), and (iii) incorporate periodic reporting using a scorecard. 4. This review of the 2015–2016 CPS business process reforms aims to determine the gains made and identify additional quality and efficiency improvements, as well as achieve better alignment with Strategy 2030. To ensure the review process is complementary and efficient, the CPS results framework guidelines are also being revised as part of this CPS review.

II. KEY CPS REFORMS, 2015–2016 5. The 2015–2016 CPS business process reforms aimed to improve the quality and value addition of the CPS, as well as reduce the time and cost of preparing a CPS. These objectives were to be achieved through quality improvements and streamlining. The key changes entailed

(i) providing greater flexibility in developing a CPS storyline; (ii) prescribing a 15-page limit for the main text; (iii) focusing more on strategic directions and themes instead of sectors; (iv) streamlining and merging thematic diagnostic assessment work into one

document—the inclusive and sustainable growth assessment (ISGA); (v) removing previous sector, governance, and other assessments from the required

linked documents of a CPS;

1 ADB. 2015. Reforming the Country Partnership Strategy. Manila. 2 ADB. 2016. Country Partnership Strategy. Operations Manual. OM A2/BP and OM A2/OP. Manila. 3 SPD changed its name to Strategy, Policy and Partnerships Department in 2019. 4 ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific.

Manila. Consistency with Strategy 2030 will be particularly important in terms of differentiated country approaches, alignment with operational priorities, selectivity, mainstreaming private sector operations, and the One ADB approach.

5 ADB. 2016. Revised Guidelines for Country Partnership Strategy Results Frameworks. Manila. 6 ADB. 2019. 2019 Annual Evaluation Review: Performance and Scorecard. Manila.

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(vi) reducing the number of linked documents to three: ISGA, development coordination matrix, and country operations business plan (COBP);

(vii) fully implementing the peer review process to replace the interdepartmental review;

(viii) reducing the number of CPS processing steps and CPS drafts; (ix) replacing the interim CPS with the enhanced COBP; and (x) revising the templates for the CPS main text, results framework, ISGA, country

knowledge plan, and COBP.

III. OBJECTIVES OF THE REVIEW AND KEY ISSUES TO BE ADDRESSED 6. The main objectives of this review are to (i) determine how much the 2015–2016 reforms improved the quality of CPSs; (ii) assess whether the reforms made processing CPSs more efficient; and (iii) identify additional reforms to improve the CPS business processes and further align CPSs with Strategy 2030, building on the revisions to the CPS template in 2019. The key issues and questions to be addressed include the following:

(i) Have the reforms saved time and lowered cost? Have the reforms improved the quality of CPSs?

(ii) Do developing member countries (DMCs) see the value of a CPS? (iii) Has the diagnostic work improved (more comprehensive, relevant, and useful in

determining strategic priorities)? Is any important diagnostic work being omitted? (iv) Is the country knowledge plan working as expected? (v) What changes are needed to improve quality and efficiency of CPSs? (vi) What changes to the CPS results framework are required to align it better with

Strategy 2030, improve its relevance, and facilitate effective monitoring and reporting of the performance and results of ADB’s program in a DMC?

(vii) What adjustments are necessary to further align CPSs with Strategy 2030, in addition to the template changes in early 2019?

IV. METHODOLOGY

A. Desk Review 7. The desk review analyzed ADB CPSs completed since the reforms took effect, as well as the country strategy processes and documents of other multilateral development banks (MDBs). The other MDBs analyzed were the World Bank, the European Bank for Reconstruction and Development, the African Development Bank, and the Inter-American Development Bank. Documents and templates reviewed included country strategies, midterm reviews, results frameworks, country diagnostics, and country strategy evaluations. B. Country Consultations 8. Team members conducted missions to 10 DMCs.7 The main objective was to obtain feedback on the quality of CPSs and their overall value to the DMCs. The team interviewed mainly the primary government counterparts who are involved in CPS discussions. In addition, team members met with key development partners to discuss each organization’s country strategies.

7 The 10 DMCs consulted were Fiji, Georgia, India, Kyrgyz Republic, Mongolia, Nepal, Pakistan, People’s Republic of

China, Philippines, and Uzbekistan, covering all five of ADB’s regional departments. Efforts were made to combine CPS consultations with the Resident Mission Review also conducted by SPD.

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C. ADB Staff Surveys 9. ADB conducted two staff surveys to obtain feedback on how much the 2015–2016 reforms have improved the quality and efficiency of CPSs, as well as their overall value to ADB and the DMCs. The survey covered the quality and utility of CPSs, the CPS results framework, and country knowledge plans. The first survey targeted the members of the CPS consultation group—a group of ADB staff members across the organization who are involved in the CPS process.8 The second survey was open to general ADB staff for voluntary response. A total of 152 staff members from 12 departments and offices responded to the two surveys.

V. ASSESSING QUALITY AND EFFICIENCY OF NEW CPS BUSINESS PROCESS A. Quality 10. The assessment of CPS quality was based on a review of past CPSs, a comparison of required content for other MDBs’ country strategies, the ADB staff surveys, and feedback during discussions with selected governments. 11. The comparison of ADB’s CPS template with other MDBs’ country strategies revealed no significant gaps in content. The key components of the strategy documents for all MDBs were similar with country context, strategy section, indicative resources, implementation plans, monitoring and evaluation (including a results framework), and risks. 12. The staff survey results found that most staff respondents believe the reforms have improved CPS quality. The improvements include clearer ADB value addition, more tailored to country situations, and better strategic focus. However, survey respondents also pointed out some areas for improvement, including the following:

(i) The CPS focuses more on sovereign lending operations and little on nonsovereign operations and knowledge work.

(ii) The CPS lacks flexibility to respond to countries’ changing needs. (iii) The shift to more thematic or operational priorities has led to less clarity about what

ADB intends to achieve. (iv) Dropping the sector assessment from the list of mandatory linked documents has

raised concerns about gaps in country knowledge. (v) The country knowledge plan does not address key development issues in DMCs

and has had limited impact on policy shifts by governments. 13. The governments consulted during the review were generally satisfied with the quality of CPSs and the consultation process. Some officials expressed appreciation that consultations are held earlier in the new CPS preparation process than under the old business process, which allows them to provide CPS teams with strategic directions earlier and ensure that the CPS reflects their priorities. One DMC government highlighted the importance of having a strong team based in country, which helps ADB to better understand the government’s priorities. 14. The governments see the CPS as a valuable tool that provides structure and stability to the financing provided by ADB. It is viewed as a good reference for ADB’s commitment to the government’s priorities. The CPS also enables the programming to align with government priorities and defines the expectations of ADB and the government. Furthermore, the CPS helps

8 ADB established the CPS consultation group to provide technical inputs to this CPS business process review, but

the members were not involved in producing this report aside from commenting on the draft.

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facilitate the coordination of development partners. However, multiple governments pointed out the need for some flexibility in the CPS to allow for changes in country conditions or government priorities during the CPS period. 15. Most staff respondents believe the diagnostic work for the CPS has improved with the ISGA compared with the previous process of several individual sector and thematic assessments. With the ISGA, the diagnostic is seen as more comprehensive, relevant, and useful in determining strategic priorities. However, staff also indicated that the ISGA needs to be more relevant to private sector operations. 16. Some respondents also suggested carrying out the sector and thematic background assessments more systematically, even if they are no longer attached to the CPS. The 2015 reforms paper noted that the CPS knowledge and assessment work was typically generated for the sake of CPS preparation rather than forming an integral part of continual dialogue and analytical work. Accordingly, those background assessments are no longer required as linked documents to the CPS. The regional departments need to undertake the necessary assessments on an ongoing basis throughout the CPS cycle to foster country dialogue, inform ADB operations, and be available to inform the next CPS. B. Efficiency 17. The 2015 reforms paper noted the voluminous nature of the CPS, averaging 155 pages including the linked documents. The pre-2016 CPS requirements included at least 14 linked documents and often 20 or more. 18. Under the new process, the average length of a CPS was reduced to 60 pages by limiting the number of required documents to three appendixes and three linked documents.9 The CPS was also shortened by setting page limits for the component parts of the document—15 pages for the main text, 2 pages for the results framework, 4 pages for the country knowledge plan (CKP), 15 pages for the ISGA, and 4 pages for the donor coordination matrix. The COBP, the final required linked document to the CPS, only has a page limit for the main text because the length of the project pipeline varies from country to country. 19. Partly because of the streamlined requirements for the CPS, processing efficiency has improved. Less time is spent on diagnostic work for the CPS. For CPSs processed after the 2016 reforms, preparation of the ISGA has taken on average 5.3 weeks, compared with an average of 14 months to produce the numerous individual assessments that were previously done on a sector and thematic basis.10 ADB’s ISGA is the most concise country strategy diagnostic document among the comparator MDBs (Table 1).

9 The 60 pages include an average of 19 pages for the COBP. 10 However, the ISGA is based on other documents prepared by ADB or other development partners. The time to

prepare these other documents is not included.

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Table 1: Multilateral Development Bank’s Processing Times for Diagnostic Work for Country Strategies

ADB IADB AfDB EBRD World Bank

Name Inclusive and Sustainable

Growth Assessment

Country Development Challenges

Diagnostic Note Country Diagnostic

Systematic Country

Diagnostic

Page length

15 100–120 30–40 <30 25 – >100 + appendixes

Preparation time

5.3 weeks 6–8 months 6–8 months 20 weeks 9.5 months

ADB = Asian Development Bank, AfDB = African Development Bank, EBRD = European Bank for Reconstruction and Development, IADB = Inter-American Development Bank. Sources: ADB, IADB, AfDB, EBRD, and World Bank staff.

20. The cumulative processing time has also been cut in half, almost solely because of the shorter time for assessment work. The average time for processing CPSs after the 2016 reforms—from ISGA preparation to Board endorsement—has been 11.7 months. Under the previous process, the average time from the assessment work to Board endorsement was 24 months. However, the 11.7 months average for the new process is slightly short of the anticipated processing time of 10 months noted in the 2015 reforms paper. 21. ADB’s country strategy processing is the fastest among MDBs when comparing the time from the diagnostic work to the Board meeting (Table 2).

Table 2: Multilateral Development Bank’s Processing Times for Country Strategies

ADB IADB AfDB EBRD World Bank

Name Country Partnership

Strategy

Country Strategy Country Strategy Paper

Country Strategy Country Partnership Framework

Page length 15 <30 20 ~20 <45

Appendixes/ linked documents

3 appendixes and 3 linked documents

5 appendixes (up to 11 with

electronic links)

17–22 1 11–14

Government concurrence

Yes Yes Yes No Yes

Preparation time

11.7 months 12–18 months 18 months 14 months 14 months

ADB = Asian Development Bank, AfDB = African Development Bank, EBRD = European Bank for Reconstruction and Development, IADB = Inter-American Development Bank. Sources: ADB, IADB, AfDB, EBRD, and World Bank staff.

22. Although ADB has made efficiency gains in preparing the diagnostic work and CPS document under the 2015–2016 reforms, the CPS final review—a review conducted by the regional department of an expiring CPS—takes on average nearly 8 months to produce. The 2015 reforms paper did not present any comparative information on the time required to produce the

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CPS final review before 2015. However, based on the increasing page length of CPS final reviews over the past several years, it is likely that the CPS final reviews are taking longer to produce after the 2016 reforms. 23. For CPSs produced after the 2016 reforms and reviewed by this study, the average CPS final review was 62 pages. Guidelines from 2010 suggested that CPS final reviews should be about 10 pages plus any appendixes, but ADB has been producing longer, more detailed final reviews. Efforts to align the final review assessments with IED’s 2015 Guidelines for the Preparation of Country Assistance Program Evaluations and Country Partnership Strategy Final Review Validations also contributed to longer final review assessments.11 24. This review was unable to quantify the impact of the 2015–2016 CPS process reforms on costs. The 2015 reforms paper estimated that the cost of producing a CPS was $1 million, driven mainly by staff time and the cost of multiple consultants used to prepare the document, especially the assessments. Since then, the budget system and the time management system have changed and no longer capture specific data for individual CPSs. Nevertheless, the reforms have likely lowered costs. The time savings resulting from the reforms would imply cost savings from staff time, and the survey found that ADB is using fewer consultants for CPS preparation than before 2016.

VI. FURTHER CPS REFORMS 25. This review concludes that the objectives of improved quality and efficiency have generally been achieved by the 2015–2016 CPS reforms. However, five areas that require further adjustments to enhance the CPS and country programming process have also been identified: (i) alignment of the CPS with Strategy 2030, (ii) CPS final review, (iii) CKP, (iv) COBP, and (v) CPS results framework. A. Alignment of CPS with Strategy 2030 1. Issues 26. Since the adoption of Strategy 2030 in 2018, ADB has been aligning many of its work processes and policies with the new corporate agenda including CPSs. The CPS plays an essential role in Strategy 2030 as it defines ADB’s operational focus in a country—with the DMC as the driver of its own development and ADB as a partner that provides customized solutions to development needs and challenges. ADB will be selective at the country level to ensure that its resources are not thinly spread, while maintaining flexibility. The CPS also needs to articulate how ADB will deliver integrated solutions to the country’s development needs through a combination of sovereign and nonsovereign financing, knowledge operations, and partnerships. 27. To bring the CPS more into line with Strategy 2030, ADB updated the CPS and COBP templates in January 2019. The key changes to the templates included the following:

(i) Differentiated country approaches. Teams now highlight how they will provide

customized solutions to each DMC’s development needs and challenges—small island developing states (SIDS), upper middle-income countries (UMICs), lower middle-income countries, and countries in fragile and conflict-affected situations (FCAS).

11 Independent Evaluation Department. 2015. 2015 Guidelines for the Preparation of Country Assistance Program

Evaluations and Country Partnership Strategy Final Review Validations. Manila: ADB.

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(ii) Operational priorities and selectivity. The templates require discussion of how country operations will align with Strategy 2030’s seven operational priorities and how ADB and the DMC are selecting which areas to engage in among numerous priorities.

(iii) Mainstream private sector operations. Nonsovereign operations and public–

private partnerships (PPPs) must be fully integrated into the CPS approach, with staff from the Private Sector Operations Department (PSOD) and Office of Public–Private Partnership (OPPP) included on the CPS team. The templates also promote PSOD contributions through requirements to discuss the role of nonsovereign operations and PPPs in achieving the CPS strategic objectives and summarizing the broad priorities for private sector development and nonsovereign operations.

(iv) One ADB solutions and partnerships. The templates require explaining the One

ADB approach, including identifying expertise across the organization to support the CPS objectives and how ADB will strengthen collaboration with development and private sector partners.

(v) Knowledge solutions. Teams must better promote knowledge solutions,

innovative practices, and advanced technologies, including a requirement to describe how ADB will support the introduction of knowledge solutions and innovative technology into its operations.

(vi) Graduation Policy. Discussion on a country’s situation in light of the three criteria

for graduating from regular ADB assistance based on ADB’s Graduation Policy and the DMC’s progress toward graduation should be strengthened. Gross national income per capita (Atlas method) is included in the country at a glance table.

(vii) Sustainable Development Goals and other global commitments. The

templates require discussion of how country operations align with the Sustainable Development Goals and other global commitments, including the Paris Agreement on climate change and the Sendai Framework for Disaster Risk Reduction, using country-level targets if available.

(viii) Potential major projects. Major projects planned during the CPS period (policy

reforms and investments for sovereign and nonsovereign operations, to the extent feasible) are highlighted to illustrate how ADB’s support will meet the strategic objectives of Strategy 2030.

28. ADB has endorsed 11 CPSs based on the new guidelines and templates (Armenia, Azerbaijan, Bhutan, Cambodia, Fiji, Georgia, Indonesia, Maldives, Nepal, Papua New Guinea, and Uzbekistan). Two other CPSs were completed under Strategy 2030 in 2018 before the new guidelines and templates. A total of 30 COBPs were completed using the new template in 2019 and 29 in 2020. 29. Despite the changes to the template, SPD’s review and feedback from the Board identified certain weaknesses in CPSs that indicate greater guidance to teams is necessary to achieve better alignment with Strategy 2030. The main issues include (i) a lack of clarity about what selectivity entails; (ii) the absence of a One ADB approach to CPS development; (iii) uncertainty

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about designing integrated sovereign and nonsovereign solutions; (iv) the need to further embed gender mainstreaming in the CPS; and (v) how to apply differentiated approaches to certain types of countries, such as FCAS, SIDS, and UMICs.

2. Actions

30. Based on the assessment of the CPS business process, this review includes additional measures to enhance the alignment of CPSs with Strategy 2030 (paras. 31–35). 31. Strengthening CPS country teams for a One ADB approach. One of the reasons that the interdepartmental review was dropped from the CPS process was the assumption that team members would be leveraged at the diagnostic and design stages under a One ADB approach. However, this review indicates further room for team members, particularly those from outside the regional departments, to deliver upstream inputs to the CPS, as intended in the reforms, rather than remaining in a commenting role. 32. The CPS business process will be updated to require a One ADB team meeting at the start. This is intended to ensure that assignments for team members are clearly established at the beginning and team members have an opportunity to highlight critical needs for the CPS based on their area of expertise. The country director will chair this meeting. Subsequent One ADB meetings may be called as needed, at the discretion of the country director. The team composition and specific roles of members will vary from CPS to CPS, depending on the country context and priorities. However, the regional departments are expected to fully engage with the other relevant departments and offices in the preparation of assessments, identification of country challenges, and the design of the CPS. 33. Country programming will be led by regional departments, but it will also include PSOD; OPPP; the Procurement, Portfolio and Financial Management Department; and the Sustainable Development and Climate Change Department (SDCC). These departments will jointly engage the DMCs and collectively assess the development challenges and binding constraints. Strategic engagement by the Economic Research and Regional Cooperation Department and collaboration with the Asian Development Bank Institute (ADBI) will be explored for each CPS. ADB will also establish a One ADB monitoring mechanism for periodically assessing progress on CPS implementation. This process will involve senior management along with the One ADB country team and will be integrated with the COBP cycle. To further the One ADB CPS approach, ADB will establish a process to update the Board on CPS implementation. Each regional department will present an update to the Board on the progress of their DMCs’ CPSs in a single session organized annually. 34. Enhance staff guidance on selected topics. Greater guidance to country teams will be developed in a forthcoming guidance note for the following topics:

(i) Selectivity. Selectivity entails making choices within a larger realm of possible engagement in a DMC. Selectivity will be explained in terms of sectors, thematic areas, operational priorities, partnerships, number of counterpart ministries, geographic location within a country, and the sequencing of various types of engagement (e.g., the first couple of years of a CPS might focus on policy-based lending to unlock sovereign and nonsovereign investments in the second half of the CPS). All country programs should strive for selectivity to achieve greater impact because ADB resources represent only a fraction of total development financing needs in DMC economies.

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(ii) Integrated sovereign and nonsovereign solutions. PSOD and OPPP staff will

work closely with their regional department counterparts during CPS preparation to ensure appropriate integrated solutions are identified and available to DMCs. At the diagnostics phase, this will include a greater emphasis on (a) identifying bottlenecks; (b) assessing the private sector and PPP environment; (c) identifying opportunities for nonsovereign operations and PPPs; and (d) determining necessary actions for greater private sector-led growth, as well as sectors or programs where sovereign operations should support PPPs and make them less risky.12 Deeper consultations with stakeholders will allow the CPS to identify priorities or opportunities for private sector investments, policy dialogue, indicative sector and/or subsector PPPs, and transaction advisory services. The CPS will explain how ADB intends to use private sector solutions to help achieve the CPS objectives, including priority sectors for ADB support and how ADB will help the DMC mobilize more private finance.

(iii) Gender. More guidance on mainstreaming gender throughout the CPS process and the CPS document will be provided. The CPS team will also work closely with SDCC’s Gender Thematic Group to improve gender-related and gender-disaggregated results framework indicators.

(iv) Strengthen differentiated approaches. Greater guidance on differentiated

approaches will be provided, particularly for FCAS, SIDS, and UMICs. SPD will work closely with relevant departments, such as SDCC and the Pacific Department, to prepare guidance on approaches for FCAS and SIDS.

35. Countries approaching graduation threshold. For DMCs approaching the graduation criteria, guidance to country teams will be based on Strategy 2030, which says ADB’s support should increasingly focus on addressing the institutional gaps that have been identified as constraints to graduation. The CPS will

(i) discuss a country’s situation in light of the three graduation criteria based on implementation guidelines for ADB’s graduation policy;

(ii) focus on areas identified as gaps against the graduation criteria where ADB can add the most value;

(iii) promote sharing of experiences, best practices, and innovation (e.g., regional public goods, climate change, environmental management, regional cooperation and integration, and aging);

(iv) facilitate cooperation among other DMCs to share knowledge; (v) focus on projects with a high level of innovation and demonstration effects for

replication; and (vi) promote greater use of reimbursable technical assistance (TA).

B. CPS Final Review 1. Issues

12 ADB’s PPP Monitor <https://pppmonitor.adb.org> will be further developed and can serve as a useful tool for

diagnostics and policy dialogue.

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36. The CPS final review is a self-evaluation of a concluding CPS prepared by the regional department and submitted to IED for validation. Four key issues have been identified relating to the final review and validation report. 37. First, the guidelines for the CPS final review contents do not fully coincide with ADB’s current corporate architecture. The final review template was issued in 2010 in line with Strategy 2020.13 It was designed to “assess the CPS strategic focuses in applicable core areas and drivers of change under ADB’s Strategy 2020…”14 The assessment of the evaluation criteria is described repeatedly in sector terms. The template calls for assessing and rating the six criteria along the lines of “key projects/programs in key sectors approved and implemented.” This contradicts the 2016 CPS reforms and Strategy 2030 and its operational plans, which are less sector oriented and more thematic. Furthermore, the 2010 final review template is not consistent with IED’s 2015 Guidelines on CAPEs and CPS Final Review Validations (footnote 11). For example, “strategic positioning” was based on Strategy 2020’s drivers of change and is no longer a criterion under IED’s 2015 guidelines. 38. Second, the five criteria under IED’s 2015 guidelines (relevance, effectiveness, efficiency, sustainability, and development impact) present challenges for evaluating a CPS. The final review covers the current CPS period of 4 or 5 years when most projects approved under the CPS would be just starting implementation or be ongoing. Because many project outputs and most outcomes are generated upon or after project completion, it is challenging to determine the effectiveness, sustainability, and development impact of projects at the end of the CPS period. The results that are available are typically from projects that were started under the previous CPS—or in some case two CPSs before—and completed under the current one. 39. Third, final reviews are taking considerable time to complete and getting longer and more detailed on project performance. CPSs prepared under the revised business process that had final reviews by the end of 201915 on average took nearly 8 months to complete and were 62 pages long.16 Much of the reason for both the time and length is the requirement to include detailed project performance information for each evaluation criteria. The lengthy processing time means that teams must start the final review process much earlier during the ongoing CPS to complete it in time for IED’s validation and preparation of the next CPS. Thus, instead of assessing the whole CPS period, the last year or more is occasionally not included in the final review. This also reduces the applicability of the findings on effectiveness, sustainability, and development as they pertain to the CPS period under review. Initiating the final review process near the end of the CPS period leads to delays in starting the validation report. The findings and recommendations in that report need to be incorporated early in the next CPS design. 40. Fourth, the draft IED validation report or draft CAPE is expected to be ready for the regional department before the informal Board seminar. The 2015 paper on reforming the CPS (footnote 1, para. 29) states the following:

IED will be requested to provide the draft validation report or CAPE before the informal Board seminar so that the draft recommendations can be considered when preparing the final draft of the CPS. For this to happen, country teams will be required to provide the final review to IED for validation at least 17 weeks prior to the informal Board seminar.

13 ADB. 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank 2008–2020. Manila. 14 Memorandum dated 8 September 2010. Strategy and Policy Department and Independent Evaluation Department. 15 Some countries had CAPEs in lieu of final reviews and validation reports. 16 The 2010 final review template calls for final reviews to be about 10 pages. IED finds this length insufficient for

validation purposes.

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41. However, the draft validation report is not circulated to the Board. As a result, the Board typically only sees the summary findings and recommendations from IED at the informal Board seminar as part of the presentation by the regional department unless IED’s validation report is already completed and circulated to the Board. When the validation report is not completed before the seminar, the Board has minimal information on the past program. In some cases, the validation report is circulated to the Board near or after the final CPS documents have been circulated to the Board, which the Board finds unacceptable. 42. Fifth, obtaining government concurrence on the document can often be time consuming, which delays the handoff of the final review to IED to begin the validation. The time required to get government concurrence on the final review varies from country to country; in some cases it takes several months. 2. Actions 43. The CPS final review will be revised to align it better with Strategy 2030. The revisions will also address the conceptual problems involved in assessing a CPS based on projects approved under the previous CPSs and those approved under the current CPS for which development results will be minimal. 44. The first change will be renaming the CPS final review to the country assistance program review (CAPR). The name change reflects that ADB’s program is being evaluated over a particular time span, including ongoing projects approved under previous CPSs and new projects approved under the current CPS. The CAPR does not review the CPS itself. The emphasis will be on the results achieved during the CPS period—as identified in the CPS results framework, complemented by additional indicators relevant to the evaluation criteria, and detailed in the results narrative of the CAPR. The new final update report of the CPS results framework (included in the final COBP of the CPS period; see paras. 80-83) will inform the assessment in the CAPR. IED will continue to validate the CAPR. 45. The CAPR will shift from the sector focus under the current CPS final review to focus on strategic pillars and operational priorities (i.e., a more cross-cutting, thematic approach). It will be less project centric as evaluating teams will be required to give adequate attention to knowledge support for a holistic approach to achieving the CPS objectives. 46. The following is the new outline for CAPRs:

I. Introduction II. Country Context III. Country Partnership Strategy Summary: Strategic Objectives and Operational

Priorities IV. Description of Operations (ongoing and newly approved projects, and knowledge products and services) V. Assessment of Evaluation Criteria (relevance, coherence, effectiveness,

efficiency, sustainability, and development impact)17 VI. ADB and Government Performance VII. Lessons Learned and Recommendations for Next Country Partnership Strategy

17 Coherence is being added as a sixth evaluation criteria as called for by the Organisation for Economic Co-operation

and Development’s Development Assistance Committee, which defines the criterion as “how well does the intervention fit?”

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Appendixes 1. ADB Loans and Technical Assistance Active During Country Partnership Strategy

Period 2. Country Partnership Strategy Results Framework Performance

47. IED and SPD will agree on the detailed guidelines for the CAPR and issue these to the regional departments. 48. The CAPR will draw information from the last COBP in the CPS cycle, which will provide a summary of results achieved to that point. The summary of the results and lessons from the last COBP in the CPS cycle is not the CAPR, but rather an input that provides necessary information for preparing the CAPR. 49. Regarding the preparation of the validation report before the informal Board seminar, this process will be changed to require the final validation report or CAPE to be circulated to the Board before the informal Board seminar. This requirement will enable the Board to be better informed of IED’s findings and recommendations. It will also allow the Board to offer more insightful guidance and inputs to the preparation of the next CPS. However, it will also require regional departments to finalize their CAPRs and IED to complete their validation reports or CAPEs earlier than the current practice. Guidelines will be provided in revisions to the Operations Manual and new staff instructions. 50. To overcome the delays from seeking government concurrence, the CAPR can be provided to the government on a no-objection basis (with a standard 21-day expiration period). The regional department should present the no-objection process as an option for the government to consider. Some governments may not accept this arrangement, in which case, the country team will abide by government protocols for document clearance. C. Country Knowledge Plan 1. Issues 51. The CKP is an appendix to the CPS that defines the scope of ADB’s knowledge operations in a DMC. The CKP is operationalized by the list of indicative knowledge products and events (LINK) in the annual COBP. The LINK lists publications and events to be delivered or made available for a DMC each year. The CKP and LINK have not met expectations. 52. First, the CKP and LINK have added limited value. Country teams have been unclear about whether the CKP is intended to (i) support the proposed pipeline of projects or (ii) align with the CPS while also serving as a forward-looking document to anticipate a DMC’s emerging needs. The LINK table is a long list of knowledge products that departments would like to work on. Thus, it is unclear whether these knowledge products are meant for ADB or the DMC. This review also found that not all the knowledge products in the LINK align with the CPS strategic objectives. Many knowledge products in the LINK are annual publications produced by ADB with no direct relevance to the CPS or the countries’ knowledge needs. For example, the 2019 knowledge mapping exercise for the Philippines Country Office conducted by SDCC showed that 24% of the knowledge support being provided to the Philippines was not aligned with any CPS priority pillar.18 Other SDCC analytical work has shown that some CKP outputs are not well linked to the DMC’s

18 The mapping exercise was conducted during the country knowledge programming exercise in June 2019. The

analysis is available in presentation format upon request.

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knowledge needs, as determined in the CPS and CKP.19 ADB must ensure that it is delivering knowledge products that are prioritized by the government and aligned with the country’s needs. 53. Second, the CKP content is static. Once the CKP is prepared in conjunction with the CPS, it is not updated or adjusted throughout the CPS period. Hence, the CKP cannot accommodate changes in country conditions or provide any flexibility to address just-in-time demand. 54. Third, it is difficult to anticipate a country’s knowledge needs over a 5-year CPS period. Normally, immediate needs are known and incorporated into the CKP, but these may not reflect the types of knowledge required in the latter years of the CPS or for a long-term development horizon unless updates are made. 55. Fourth, most country teams conduct limited follow-up on the CKP once the CPS is implemented. This includes a general lack of tracking results of the CKP. 2. Actions 56. ADB will continue to produce the CKP as part of the CPS process and attach it as an appendix to the CPS. However, ADB will adjust the content of the CKP to clarify the purpose and improve its value addition. The purpose of the CKP is to harness knowledge as part of an integrated approach to achieve the strategic objectives of the CPS (complementing the sovereign and nonsovereign operations). The CKP is to focus on knowledge outcomes and not a list of knowledge products and services. The new adjustments will provide more structure to the CKP and its preparation. SDCC will prepare a guidance note and training materials to assist country teams with the development and updating of a CKP. The new content will contain the following:

(i) Identify operational knowledge needs. Based on stakeholder consultations, the CPS team will identify the operational knowledge needs. This should be undertaken after identifying the sector and thematic challenge areas within each priority pillar of the CPS. This assessment will help to identify any emerging knowledge needs of the client or emphasize knowledge needs that still need to be addressed.

(ii) Map ADB’s response to knowledge needs. CPS teams will map ADB's

proposed knowledge support in response to the identified knowledge needs and demand by highlighting the proposed knowledge outputs for each CPS strategic objective. The knowledge outputs are categorized into three knowledge results categories. The knowledge results categories define the overall knowledge program offered to a DMC, reflecting the specific strategic priorities and key development outcomes the DMC wants to achieve, in line with the CPS. The categories are (a) improved program or project delivery, (b) increased awareness and evidence-based information, and (c) enhanced capacities and skills. CPS teams will complete a new CKP table, which will list the knowledge outputs by knowledge results category for each CPS objective or pillar. Teams should provide the key outputs that the knowledge support delivers to the target audience, and these should focus on achieving or improving development outcomes in the DMC.

19 SDCC prepared a brief CKP issues paper drawing inputs from regional departments on their experiences with the

CKP. Discussions were also held on the CKP during the first meeting on drafting the Knowledge Management Action Plan, 2020–2025. In addition, consultations were held with officials in Armenia, Azerbaijan, India, People’s Republic of China, Philippines, and Thailand.

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(iii) Approach to promoting knowledge as One ADB. Relevant ADB departments and offices will be brought in to deliver knowledge support.20 Once this support is defined, departments and offices will be expected to demonstrate their commitment by including proposed deliverables under their respective work plans.

(iv) Areas of collaboration with partners. This section will remain largely the same

as the current template on collaboration with partners. Teams will be encouraged to explore knowledge partnerships and may identify specific activities if known in advance.

(v) Indicative resource estimate. The indicative knowledge resource estimate for the

CKP will be described to ensure that the CKP has a feasible scope. To the extent possible, this will elaborate on the human and financial resources ADB will deploy to deliver support in the identified areas. The description of human resources will refer to the mix of ADB staff, external consultants, and partner organizations. The financial resources will estimate the amount of TA and other funds such as trust funds and other development partners’ cofinancing.

57. Aligning the country knowledge plan with Strategy 2030. Strategy 2030 calls for strengthening knowledge services for DMCs. The revised CKP outline (para. 56 above) intends to improve in four areas noted in Strategy 2030: (i) promoting knowledge across ADB, (ii) enlarging the role for research, (iii) expanding partnerships, and (iv) disseminating knowledge. In the new CKP outline, the section on promoting knowledge as One ADB will include discussion of the measures to ensure greater collaboration across ADB (operations and non-operations departments) and ADBI, when applicable. The One ADB approach for knowledge will be customized for each CKP to fit the DMC’s knowledge needs and assign clear responsibilities. The CPS team should identify knowledge partnerships with clear joint work programs at the time of the CKP’s preparation and update them annually. 58. Better integrating knowledge to support CPS strategic priorities. The knowledge support that ADB provides is often not well integrated with the CPS strategic priorities. It is usually a simplistic and static list of knowledge events and publications. The CPS strategic approach discusses the sovereign and nonsovereign lending programs to help achieve the intended objectives, and the CPS template includes a stand-alone paragraph on knowledge that summarizes the CKP. Instead of this stand-alone paragraph on knowledge, CPS teams will be expected to explain how the proposed knowledge products and services will support the CPS’s strategic objectives or pillars by complementing the sovereign and nonsovereign lending programs. 59. The preparation of robust sector and thematic assessments, sector road maps, and other diagnostic work during the CPS period to inform the design of the new CPS and policy dialogue with DMCs is essential. The country directors should determine the topics, scope, and timing of the assessment work and monitor the progress. The country directors will be encouraged to explore cross-sector or thematic studies, combining the relevant expertise across ADB depending on the needs in the DMC. The assessment work will be an important input to the CKP. The forthcoming staff instruction on CPS preparation will clarify the process and requirements for the assessments. ADB will also develop a guidance note that will build on the experience of ongoing collaborative efforts by the regional departments and SDCC in several DMCs in building programmatic CKPs. While countries may use differentiated approaches in identifying knowledge

20 Collaboration with ADBI will be explored.

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needs and designing the CKP (e.g., FCAS countries compared with UMICs), the CKP must be part of the CPS design process from the start. 60. Linking the country knowledge plan with the country operations business plan process. As the CKP is attached only to the CPS, the plan is not updated during the CPS period. To overcome this constraint, a CKP table will be included as an appendix to the COBP. This will allow the CKP to be updated and adjusted, if needed, and will ensure that the CKP remains relevant during the whole CPS cycle. The CKP appendix to the COBP will have the table that lists the knowledge products for the coming year, and these should be relevant to the attainment of knowledge outcomes in line with the CPS pillars or strategic priorities. D. Country Operations Business Plan 61. Governments value the COBP because it is a substantive representation of ADB’s commitment to the strategic priorities described in the CPS. It enables governments to better see how ADB programs fit with their programs. However, a few issues have been identified that, if addressed, would make the COBP more useful and easier to follow.

1. Issues 62. Main text narrative too generic. The main text of the COBP has three sections: (i) consistency of the business plan with the CPS, (ii) indicative resource parameters, and (iii) summary of changes to lending and nonlending programs. The first section typically contains generic statements about how the COBP is aligned with the CPS, ADB’s Strategy 2030, and the government’s development strategy. Because the writeup does not specify how the COBP is aligned with these strategies, it offers little insight on the logic behind the program or the priorities in the 3-year cycle. This generic section contrasts with the pipeline appendix, which lists the lending and TA projects but does not explain the rationale behind their selection. 63. Some information has limited value. Another problem with the main text is the section on changes to the program. This section describes project name changes, what has been dropped or reprogrammed, and changes in project costs. This information has limited value because the COBP is a rolling 3-year pipeline that is expected to change; it is not a fixed commitment by the government and ADB. In some countries where the changes from one year to the next are extensive, this section of the COBP becomes a long list of changes without any context for why the changes have occurred. 64. Sovereign orientation. The COBP is essentially a document for sovereign lending because private sector projects cannot be disclosed for confidentiality reasons or programmed because of the fluidity of the private sector pipeline. ADB needs to explore ways for PSOD and OPPP to play a more active role in country programming and in supplying more relevant information on nonsovereign prospects in each country to the COBP. 65. Different results frameworks for CPS and country operations business plan. The CPS contains a results framework appendix, while the COBP has a country results areas appendix. However, the two are not the same, which causes confusion and extra work to prepare them. The CPS results framework is arranged according to the CPS strategic objectives; it contains outcome indicators and targets for tracking and monitoring. The COBP results areas matrix, which does not have indicators or targets, is organized according to sectors. Another key difference is that the COBP results areas appendix is updated each year in contrast to the CPS results framework, which is prepared at the time of the CPS and fixed for the whole CPS cycle.

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66. Two country operations business plans occasionally required for one country within a year. A COBP must be finalized by 31 August each year. When a CPS is prepared, typically every 5 years for a country, a new COBP is a required linked document to the new CPS. Depending on when the new CPS goes to the Board for endorsement, a second COBP might have to be prepared a few months after the August deadline. This occurs when a new CPS goes to the Board in the first or second quarter of a year. Because the previous COBP would have been aligned with the old CPS, another COBP needs to be prepared in line with the new CPS strategic directions. Resident missions report that the governments complain that they just cleared the previous COBP a few months earlier.

2. Actions 67. New main text outline. The new outline for the COBP main text is intended to be more informative. It will have two sections: a description of the business plan and indicative resource parameters. The second section remains largely the same as the current format, while the third section on changes in the program will be removed. The new section on the description of the business plan is intended to provide more information on (i) how the program corresponds to the strategic priorities under the CPS, Strategy 2030, and the government’s development strategy; (ii) key changes in the strategic direction of ADB operations (including major changes in the pipelines), such as responding to crises or a new government’s development agenda; and (iii) features of the proposed pipeline of projects and TA. Information to be included in the new first section 1 will be as follows:

I. Description of Business Plan

(i) Which elements of the CPS are supported and how, including nonsovereign and PPPs

(ii) Which parts of the government development strategy are supported (iii) Any key strategic direction changes (iv) Key features and sectors; major projects (v) How the pipeline relates to Strategy 2030 and the operational priorities

68. The full revised COBP contents will appear as follows:

I. Description of Business Plan II. Indicative Resource Parameters Appendix 1: Country Results Framework Appendix 2: Portfolio at a Glance Appendix 3: Indicative Assistance Pipeline Appendix 4: Assistance Program for Current Year Appendix 5: Country Knowledge Plan Appendix 6: List of Linked Documents

69. Revised appendixes. Some appendixes will be modified. The current appendix 1 on country results areas will be replaced with the country results framework used in the CPS (paras. 75-84). The full details of the portfolio at a glance will become an appendix instead of a link in the list of linked documents. This change is intended to make the portfolio data more easily accessible. Appendix 3 of the COBP will remain the indicative assistance pipeline, but the layout will change in forthcoming template revisions. Appendix 4 will have a similar layout as Appendix 3 for the pipeline. Appendix 5 on the CKP is discussed in paras. 56-60 of this paper. The CKP

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appendix in the COBP will include a table containing the knowledge outcomes, knowledge results categories, and the forthcoming year’s knowledge products and solutions. 70. Nonsovereign inputs. In addition to the restructuring of the COBP outline, the process will also be changed. First, in countries where PSOD has a presence in the resident mission, the PSOD representative will participate in the country programming mission before the project pipeline is drafted. In countries without a PSOD presence, PSOD and OPPP should participate in country programming missions to the extent possible (even virtually) or hold consultations with the country programming team before consultations with the government. Second, PSOD and OPPP will review the draft COBP to see if any proposed sovereign projects in the pipeline might have potential for nonsovereign financing or PPPs. This would ensure that PSOD and OPPP have the opportunity early in the process to inquire about whether a proposed project could be partly or completely nonsovereign financed or might be suited for a PPP. 71. The screening criteria for PSOD and OPPP will include the following:

(i) projects with potential for PPPs; (ii) projects that would unlock opportunities for private sector operations; (iii) projects suitable for nonsovereign financing instead of sovereign financing, or

transactions to work on together (i.e., sovereign and nonsovereign); (iv) projects that would help attract private sector financing; and (v) projects with potential opportunities for official or commercial cofinancing.

72. Single results framework for CPS and country operations business plan. Rather than maintaining two separate appendixes on results, a single results framework for the CPS and COBP will be used. Using the same results framework will have three advantages: (i) better consistency and links between the CPS and COBP, (ii) ability to update the results framework each year as necessary, and (iii) greater clarity for the government about what to track and monitor. Paras 75-84 have details on additional modifications to the results framework. 73. Delinking country operations business plan from CPS. To resolve the issues arising from the COBP being a linked document to the CPS and also having its own production cycle, the COBP will no longer be a required linked document to a new CPS. The CPS main text will continue to highlight key projects expected during the CPS cycle and programmed in COBPs (including for knowledge engagements) when discussing the CPS priorities, as noted in the CPS template. The COBP will continue to follow the production cycle that requires COBPs to be finalized by 31 August each year. The CPS main text will refer to the latest COBP and include the link. 74. Country program monitoring. ADB will establish a One ADB monitoring mechanism for periodically assessing progress on CPS implementation (para. 33). This will be integrated with the COBP process—analyses made to prepare a COBP will provide the basis for strategic discussion to (i) monitor the progress against country program objectives, (ii) identify the needs for change in program directions, and (iii) explore opportunities for synergies from the One ADB approach. The business process for this monitoring mechanism will be determined in consultation with relevant departments. E. CPS Results Framework 75. In 2007, ADB introduced a results-based management approach for CPSs. These results frameworks link ADB’s operations and resource allocations with the development outcomes and

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targets of the partner governments. ADB’s approach to country-level results frameworks has undergone two rounds of revisions—in 2010 and 2016—to reflect lessons learned, strategic priorities (such as new corporate strategies), and changes in CPS business processes.21 New issues have emerged recently that required further changes and enhancements to the CPS results framework.

1. Issues 76. Ensuring alignment with Strategy 2030. ADB adopted Strategy 2030 in 2018. The new corporate strategy calls for a country-based approach, which needs to be reflected in how ADB sets out and monitors the delivery of country program results. The Strategy 2030-aligned corporate results framework has outcome-based indicators for tracking results achieved in line with the seven operational priorities. This will provide a better and more coherent way to measure and report on ADB’s aggregate results, including at the country level. However, the current CPS results framework and the 2016 guidelines (footnote 5) for preparing those frameworks were developed in accordance with Strategy 2020 and the Midterm Review of Strategy 2020. 77. Improving operational relevance. The way the CPS results framework defines, supports the monitoring, and reports on the performance and results of ADB’s program in a DMC needs improvement. Less than half (43%) of staff that responded to the survey agreed that the CPS results framework is relevant to ADB’s operations in a DMC. The 2016 guidelines focus on the sector and country outcomes and impacts to which ADB interventions contribute.22 Challenges with this approach have included a lack of relevant government indicators, targets, and data; and difficulties in performing evaluations of ADB’s country programs after completion. The results framework indicators are for sector and cross-sector outcomes, which are largely taken from the government’s program. ADB interventions can contribute to these targets, but project-level DMF indicators typically do not have direct links with them. Thus, ADB’s contribution in most cases is indirect. For example, the CPS results framework outcome might focus on improving particular Doing Business ratings, while the operations track the success of specific reforms. 78. Inflexible and inadequate monitoring and reporting. The CPS results framework is prepared at the time of the CPS. Once the CPS is endorsed, the results framework cannot be revised or updated if government priorities change, new operational challenges or opportunities emerge, and subsequently ADB’s operations change during the CPS period. Further, one of the CPS results framework’s important roles is tracking the ADB country program’s results and performance. However, no reporting is done until the CPS final review at the end of the CPS cycle. IED raised this issue as part of 2019 Annual Evaluation Review, and Management committed to periodic reporting on the development effectiveness of country programs using a fit-for-purpose approach (footnote 6).

2. Actions 79. New CPS results framework template. The new CPS results framework template, and process for using it throughout the CPS cycle, will improve its alignment with Strategy 2030 and operational relevance. It is designed to better fulfill its three main purposes and is based on five underlying principles (Figure 1).

21 ADB. 2010. Preparing Results Frameworks and Monitoring Results. Manila; and ADB. 2016. Revised Guidelines for

Country Partnership Strategy Results Frameworks. Manila. 22 “ADB interventions” refer to sovereign and nonsovereign projects, technical assistance operations, and knowledge

products being implemented, or planned for implementation, in a DMC.

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Figure 1: Purposes and Principles of the Country Partnership Strategy Results Framework

ADB = Asian Development Bank, CPS = country partnership strategy. Source: ADB.

80. The new CPS result framework template will have two main sections: one on alignment with government objectives and the other focusing on the performance of the ADB-supported program based on the results achieved for Strategy 2030 operational priority indicators. Figure 2 explains the components of the results framework. 81. The aim of the key outcome indicators is not to measure all possible results related to a key outcome statement in their totality, but to specify a metric that is applicable and relevant to most ADB operations. The indicators are selected from the 99 operational priority indicators—22 results framework indicators (RFIs) and 77 tracking indicators in the Strategy 2030-aligned corporate results framework.23 Indicator selection is informed by an assessment of envisaged results from operations expected to be committed during the CPS period; targets and baselines are explained below.

(i) All outcome indicators have a target of 80% achievement rate, meaning aggregate results achieved by completed operations should be at or over 80% of aggregate expected results for these interventions as set out in project documents after completion. For example, if all projects or programs for which a completion report24 is circulated during the CPS period cumulatively aimed to achieve improved urban environment, climate resilience, and disaster risk management in 100 zones, a satisfactory achievement rate would have been achieved if 80 or more zones are improved by the end of the CPS period based on data reported in completion reports.

(ii) Baseline values do not need to be specified in the results framework. Baselines serve

as measures against which to judge delivery; they are not applicable when an achievement rate type of target is used because performance is judged solely based on expected versus actual achievement of results. Actual quantities of results achieved (e.g., 4 million people benefiting from stronger environmental sustainability) are not relevant to include as baselines as they do not provide a useful benchmark

23 ADB. 2019. ADB Corporate Results Framework, 2019–2024. Manila.

https://www.adb.org/sites/default/files/institutional-document/504656/policy-paper-adb-results-framework-2019-2024-circulation-22-august.pdf. Supplementary Appendixes 1 and 2 provide definitions of results framework indicators and tracking indicators.

24 “Completion reports” refer to project completion reports, extended annual review reports, and technical assistance completion reports.

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against which to compare performance over time. This is because ADB generally does not aim to achieve an increased quantity of development results for each outcome indicator over time; rather, expected quantities of results achieved will vary, sometimes significantly, based on portfolio composition during each CPS period.

Figure 2: Template for Country Partnership Strategy Results Framework

ADB = Asian Development Bank, CPS = country partnership strategy, DMC = developing member country, OP = operational priority, RFI = results framework indicator, SDG = Sustainable Development Goal, TA = technical assistance, TI = tracking indicator, WPBF = work program and budget framework. Source: ADB.

82. Updating and revising CPS results framework and monitoring progress. The CPS results framework is now updated and revised during the CPS cycle. Periodic progress reporting with a scorecard methodology using achievement signals is introduced with the midterm and final updates of the CPS results framework, as is a process for revising the framework’s components. Figure 3 diagrams the new approach.

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Figure 3: Updating and Revising CPS Results Framework during CPS Cycle

CAPE = country assistance program evaluation, CAPR = Country Assistance Program Review, COBP = country operations business plan, CPS = country partnership strategy, Y = year. Note: The cycle represents reporting for CPSs that are 5 years in duration and do not have delays between CPS periods. Source: ADB.

83. Regional departments update the framework throughout the CPS cycle as part of the annual COBP process. COBPs in years 2 and 4 of the CPS cycle only update the indicative resources. Figure 4 explains the components of the midterm update report prepared during year 3 and the final update report prepared early in the final year of the CPS cycle. The midterm and final update reports are accompanied by a country results and portfolio monitoring dashboard, which monitors additional information on CPS progress. The dashboard reports results achieved for operational priority indicators additional to those included in the CPS results framework, as well as additional portfolio performance data and any other indicators selected by the country team as relevant to CPS implementation. 84. Components of the CPS results framework can be revised at the midterm update as part of the regular COBP cycle. In exceptional circumstances, the CPS results framework revision may be initiated at other COBP rounds. Normally, the framework will not be changed later than 2 years before the end of the CPS period. Revisions to the CPS results framework are discussed and cleared with the government and SPD before circulation of the COBP.

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ADB = Asian Development Bank, CPS = country partnership strategy, RF = results framework, TA = technical assistance, WPBF = work program and budget framework. Source: ADB.

VII. IMPLEMENTATION 85. The new CPS reforms, except for the CAPR, will apply to all CPSs with strategic priorities meetings scheduled on or after 1 June 2021. The changes to the CAPR will be announced in a separate memo once SPD and IED have issued joint guidelines on the preparation of the CAPR. The COBP changes will take effect for COBPs starting in 2021 and covering 2022–2024. 86. The Operations Manual section for the CPS (OM A2) will be updated and staff instructions, which are not currently available, will be prepared by June 2021.

Figure 4: Components of CPS Results Framework Midterm and Final Update Reports