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Ms Ursula Schäfer-Preuss, ADB’s Vice President for Knowledge Management and Sustainable Development joined IFAD’s Asia and the Pacific Division in two seminars on 7 July 2009. Ms. Schäfer-Preuss is responsible for ADB's Regional and Sustainable Development Department, Economics and Research Department, and the Office of Cofinancing Operations. Since joining ADB in November 2006, she has significantly contributed to the re-establishment of ADB’s focus on agriculture. Mr A. Andrea Monari, ADB’s Resident Director General for the European Representative Office, also joined the meeting.

Food security, financial crisis and economic slowdown in Asia and the Pacific: ADB’s instruments and response
In the morning, Ms. Schäfer-Preuss presented ADB’s analysis and responses to food security, financial crises and economic slowdown in Asia and the Pacific. She stressed the importance of land use and management in the context of climate change and environmental issues, especially as the soil is directly linked to food security.

Global imbalances

The root cause and impact of the global financial crisis is related to US current account deficit: over-consumption and Asia’s current account surplus: overproduction. The main concern is how to sustain the level of production. The main impact on Asia’s development relates to:
  • Decline in external demand
  • Reduced access to external finance
  • Reduced FDI and capital flows
  • Declining remittances – in Bangladesh, China, India, Pakistan and the Philippines, remittances fell by 4-7 % in 2009 compared to 2008. While the Philippines expect a 6-9 % growth rate, statistics show that Filipinos are coming back to their country. It is important to use remittances productively.
Forecasts for development in Asia show a slowdown in the growth of GDP, consumption and welfare. In 2009, Asian GDP is expected to grow at only 3.4% compared to 6.3% last year. In China alone over 20 million workers (mostly low skilled migrant workers) have lost their jobs. Middle income strata have also been largely affected.
Crises, poverty vulnerability and food security
With the world economic and financial crisis, poverty has increased. Women are among the most vulnerable people. As jobs are lost, women workers are among the first to be fired. Food supply is affected not only because of the crisis but also because of lack of irrigation and investment. Limited access to food, instability of the food system in terms of its utilization and nutritional security are among the key problems in Asia.

According to ADB’s analysis, in 2010 poverty and vulnerability are expected to decrease compared to 2005. Without a crisis, poverty and vulnerability should decrease from 27.1% and 54% in 2005 to 16.7% and 40.7% respectively. With the crisis, about 19% of Asians are expected to remain poor and 44.4% vulnerable in 2010.

ADB’s poverty estimates and forecasts seem pessimistic taking into account the role of public investment and agriculture especially for China and India. However, all projections are based on imperfect information. In the past, ADB has been criticized for being too optimistic.

What can we do to re-balance Asia’s growth?
  • Promote SME and service industries by lowering entry barriers
  • Develop financial systems
  • Strengthen domestic competition to foster domestic production and increase the consumption of domestic products
  • Strengthen regional cooperation to produce food and make it accessible to consumers e.g. GMS is promoting stable and equitable growth through greater trade, creating more job opportunities, increased mobility between countries, common-use of health facilities and access to better farming technology.
Climate change: additional challenges

Asia's challenges in terms of resilience to climate change means that any future investment, including ADB’s response to the crisis needs to take into account climate change impacts. We should not look at addressing the financial crisis in the short term but in the long term by taking into account the implications of climate change. Adaptation to climate change and mitigation of climate change impacts must be integrated within the development process.

ADB with IFPRI undertook a study on climate change and energy to advance energy efficiency and the clean energy agenda with focus on two aspects – financing (both public and private including commercial financing), and technology transfer and diffusion issues. The key messages of the study are that adaptation to climate change requires investment in agricultural research, irrigation and technology. Mitigation strategies exist but have to be exploited especially in relation to crop productivity, and soil and water conservation techniques.

ADB screened its loan portfolio to assess the risk to climate change. This analysis will enable the bank to ‘climate proof’ its investments. All its activities will include climate resilience investment money. Risk management policies are to be included in ADB programmes

Climate change is affecting food security in terms of:
  • Decreased crop yields
  • Reduced land area and suitability for crops
  • Higher food prices
  • Poor food utilization: high incidence of vector- and water-borne diseases
ADB response:

  • Subregional and regional initiatives
  • Support for public expenditure
  • Support for trade financing
  • Mainstreaming climate adaptation and mitigation in the context of new and ongoing investment
Resources for ADB’s response:
  • General capital increase tripled to $165 billion for poor countries such as Cambodia, Nepal (China and India don’t have access to these resources)
  • Asian Development Fund X: up 60% to $11.3 billion
  • New financing facilities – Countercyclical Support Facility, Trade Finance Facilitation Program, Asian Infrastructure Financing Initiative, Climate Change Fund (US$ 40 million grant open to all countries for activities relevant to climate change), Water Financing Partnership Facility (also looking at climate change elements)
What can we do better to work jointly and not to re-invent the wheel?

Regional cooperation in the Greater Mekong Subregion (GMS) and south-south cooperation is necessary for addressing important issues. However, business should be done differently than in the past. ADB is moving away from traditional business to a new way of working. For example, it has a sustainable transportation policy for building roads. It is now looking at urban transportation e.g. bus systems, greenhouse gas aspects and sustainable energy policy. It also uses quick disbursement funds directed to social protection.

Development missions should be more coherent to re-balance Asia’s growth. They should also include aspects such as energy and the environment. ADB is making its development approach more coherent. For example, it is trying to help its partners implement the Paris Declaration by increasing their efforts in alignment and managing aid for results. However, partners don’t always respond actively. ADB is also supporting governments to get their own strategies in place. ADB has a positive experience with Viet Nam which is a good example of harmonizing procurement. This is because Vietnamese partners put much emphasis on harmonizing the agenda and streamlining procedures with the donor community.

Supporting long-term development is necessary. G8 is favouring greater investment in sustainable development rather than reliance on emergency food aid. How to get small farmers on board remains an issue.

The private sector can play a significant role in development. ADB has a private sector operations department that provides direct assistance (financial and technical) to private sector projects with clear development impact but which may have limited access to capital.

Can cooperation minimize crises in the future? ADB collaborates with ASEAN on health and security issues where ASEAN plays an active role. Collaboration between IFAD and ADB is about how to complement each other. Collaboration should not be a gap filling exercise. IFAD comes where ADB doesn’t have experience. Collaboration is about know-how, how we sharpen our knowledge to implement our activities.
Knowledge management agenda for rural poverty reduction in Asia and the Pacific: ADB’s plan of action
In the afternoon, Ms Ursula Schäfer-Preuss presented ADB’s strategy and action plan for KM. IFAD’s partnership, which was based on co-financing in the past, has been broadened to include KM. For example, IFAD colleagues participated in an ADB retreat in April 2009.

KM is a real challenge for both organizations. ADB's Strategy 2020, approved in April 2008, reaffirms both the Bank’s vision of Asia and the Pacific free of poverty, and its mission to help its developing member countries improve their living conditions and quality of life. To achieve it, the strategy supports the following strategic areas – inclusive economic and environmentally sustainable growth and regional integration.

ADB’s five drivers of change are the following:
  • Development and operations of the private sector
  • Good governance and capacity development
  • Gender equity
  • Knowledge solutions
  • Partnerships
Action Plan for ADB’s Knowledge Management, 2009–2011
The proposed plan presents a coherent and practical agenda of actions to advance the Bank’s KM agenda. The fundamental premise considered when drafting it was: "What does ADB need to know to achieve its goals?" The associated questions considered regarding knowledge in ADB were: "When do we need it?", "Where do we source it from?", and "How will we use it?".

The Action Plan focuses on four core areas:
  • Sharpening the knowledge focus in ADB operations.
  • Empowering communities of practice to enable them to capture and share knowledge, especially in the areas of gender, infrastructure, governance and environment.
  • Strengthening external partnerships to acquire and disseminate knowledge.
  • Further enhancing staff learning and skills development.
The Bank’s rationale is that knowledge needs to be firmly embedded in operational work, while audiences, clients, and partners can and are keen to contribute. Collaboration mechanisms such as communities and networks of practice play a vital role in accessing and transferring tacit knowledge, but also require visible sponsorships, clear objectives, and strategic investments. The rapidly changing nature of development work demands diverse competences from staff members.

What does ADB need to know to achieve its goals?

Though KM is evolving in the right direction, the Bank needs to do more. In 2008, ADB conducted a review of its KM practices with the support of GTZ. The review concluded the following:
  • While the main thrusts of its KM framework remain valid, ADB needs to make adjustments to strengthen its work on knowledge.
  • Adjustments to the KM framework must be practical, incremental, and forward-looking, and in particular be aligned progressively to the new corporate strategy 2020.
  • Emphasis should be placed on improving ADB's ability to deliver more adequate and focused knowledge support to its developing member countries.
  • A renewed effort in KM is needed vis-à-vis the coordination mechanisms that drive internal and external knowledge partnerships.
  • KM is an ADB-wide responsibility and all departments have important roles and accountability.
To preserve knowledge, the Bank is undertaking various activities such as retreats, meetings, collaboration with external agencies, high level regional conferences and support for international agriculture research.

Operational Plan for Sustainable Food Security under Strategy 2020

The Operational Plan aims to mainstream food security, agriculture and rural development in the overall path of the sustainable economic transformation, against three binding constraints:
  • stagnating food productivity and production
  • lack of access to resources, infrastructure and markets
  • climate change and climate variability
GMS Subregional Cooperation in Agriculture

ADB is involved in a number of sub-regional cooperation initiatives. One of the most active ones is the GMS cooperation covering Cambodia, Lao PDR, Myanmar, PRC, Thailand, and Viet Nam. Among the nine sectors of GMS regional cooperation, the agriculture sector is prioritized by all the countries. Transport investment is another important sector. In April 2007, the GMS Agriculture Ministers’ Meeting endorsed the Strategic Framework for Subregional Cooperation in Agriculture and the Core Agriculture Support Program (CASP). The CASP consists of projects under the following strategic components designed to sustain and further accelerate cooperation in agriculture:
  • facilitating cross-border agricultural trade and investment
  • promoting public-private partnerships to share agricultural information in various countries
  • enhancing capacity in agricultural science and technology
  • establishing emergency response mechanisms for agricultural and natural resource crises
  • strengthening institutional linkages and mechanisms for cooperation in agriculture.
To date, ADB has supported the GMS Working Group on Agriculture through regional technical assistance worth about US$4.6 million.

Reducing poverty in China

In China, ADB has a long-standing involvement through a TA Facility for Policy Reform and Poverty Reduction (TA 4933-PRC). It provides knowledge support for sectoral policy studies, capacity building and innovations in poverty reduction. China considers ADB to be a knowledge bank rather than a development bank. For example, through ADB’s assistance, China is upgrading its knowledge base on sustainable agriculture, ecosystems and water management.

Study on climate change

A study on climate change titled ‘Regional Review of the Economics of Climate Change in Southeast Asia’ is the outcome of ADB regional technical assistance that was implemented last year in collaboration with United Kingdom.

The study provides a review of the economics of climate change in the sub region. It confirms that Southeast Asia is highly vulnerable to climate change and demonstrates that a wide range of adaptation measures are already being applied.

The study estimated the economy-wide cost of climate change for Indonesia, Philippines, Thailand, and Viet Nam. It shows that if the world continues its ‘business-as-usual’, by 2100 the cost of climate change for the four countries could be equivalent to losing 6.7% of their combined annual GDP by 2100 on average, more than twice the global loss. The report also shows that the region has a great potential to contribute to the reduction of greenhouse gas emissions.

ADB has four approaches to integrate climate change programming in Southeast Asia:
  • provide technical/financial support for taking appropriate action to combat climate
  • support regional responses to climate change and regional cooperation initiatives in climate change
  • strengthen land use and forestry policies and explore opportunities for carbon sequestration (Thailand & Viet Nam)
  • enable the private sector to invest in mitigation and adaptation.
What needs to be done?

ADB is implementing or planning the following actions to address climate change:
  • Enhance the focus on climate change in its operations.
  • Increase lending for agriculture/rural development and social safety-nets.
  • Build partnerships for knowledge and research.
  • Support global dialogue actions.
GMS knowledge sharing platforms

ADB uses two main platforms to consult and communicate regional issues in rural poverty reduction. These are:
  • GMS Working Group for Agriculture
  • GMS Working Group for Environment
Through the Working Group for Agriculture, IFAD financed a study on biofuels and rural renewable energy development in GMS in 2008. The study forms the basis for a new GMS Rural Renewable Energy Project which is now in the pipeline.

Efforts to control transboundary animal disease continue. Specific actions include participatory research on patterns of livestock trade and disease control in the GMS, upgrading of regional and national laboratory facilities, and training laboratory staff.

Access to agricultural information is being expanded through the Agriculture Information Network Service (AINS). The service aims to provide access to up-to-date information on agriculture in the GMS to support exchange of information and to foster inter-regional trade of agricultural produce and value-added products.

Currently, ADB is conducting a study on Cross-Border Agriculture Trade Facilitation and Strategy in GMS. It assesses opportunities for harnessing the GMS economic corridors for cross-border agriculture trade and investment, including contract farming.

Continued support to development partners is needed to build capacity to:
  • boost subregional agricultural competitiveness
  • develop regional safety standards and institutional capacities on food safety, sanitary and phytosanitary standards in the GMS
  • secure rural renewable energy
Collaboration with CGIAR centres to facilitate KM

ADB’s main concern is that Asia and the Pacific does not get forgotten by research focusing on Africa. Agriculture is very important in the region and the Bank can only finance activities related to agriculture research. In October, ADB will organize a regional conference with some of the research centres to come up with a research proposal for the Asia and the Pacific Region. The programme should relate to themes such as commodities and climate change.

Collecting and synthesising information

We are increasingly confronted by changing circumstances. Data takes time to analyse and as a result they might not be used for decision-making. It also costs a lot of money to have separate knowledge products. We should be working in partnership to develop knowledge products.

Innovation and knowledge management
ADB doesn’t make a distinction between innovation and knowledge.

Advocacy
ADB has its own advocacy role with members. However, its approach should be more coherent.

ADB’s regional conference
The Bank proposed to IFAD a partnership related to the planned regional conference. The Bank is trying to convert it into an investment forum.

Communities of practice
The effectiveness of ADB’s communities of practice depends on how active their chair is, whether they have funds available to get external people to come in, how attractive the theme is, personalities involved, and availability of time.

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