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Overview of ADB Support for

Partnerships with Non-


Non-State Actors

Presentation for

ADB-UNICEF Regional Workshop on


The Role of Non-State Providers in Delivering Basic Social Services for Children
April 19, 2010
By Jon D. Lindborg, Southeast Asia Department
The views expressed in this presentation are the views of the author(s) and do not necessarily
reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors or
the governments they represent. ADB does not guarantee the source, originality, accuracy,
completeness or reliability of any statement, information, data, finding, interpretation, advice,
opinion, or view presented, nor does it make any representation concerning the same.
Outline

 Global Context for Partnerships


 ADB Context for Partnerships
 ADB Engagement with Non-
Non-State Actors
 ADB and Public-
Public-Private Partnerships
 Summing Up and Some Possible Discussion Points
Global Context: Proliferation of
Development Partnership Channels

 Over 60 bilateral donors (“legacy” and new players)


 Over 230 international organizations
 1000s of non-
non-government (NGO), community (CBO), civil society
(CSO) and faith-
faith-based (FBO) organizations
 Emergence of new players driving new approaches/innovation:
– Private Sector Corporate Social Responsibility (CSR) activities
– Large Foundations:
 Bill and Melinda Gates Foundation ($33.5 billion endowment)
– “Vertical Funds” focused on specific issues/themes:
 Global Fund for AIDS, TB and Malaria
 Global Alliance for Vaccines and Immunization (GAVI)
– Social Entrepreneurship Funds, e.g. Skoll Foundation and Acumen
Fund
U.S. Capital Flows to Developing World:
Non--Official Flows Matter More
Non

Source: U.S. Agency for International Development (USAID)


Global Context: A Wide Range of Public-
Public-
Private Relationships

 NGO and CBO partnerships


 Corporate Social Responsibility activities
 Formal or informal “alliances” such as USAID’s Global
Development Alliance (GDA)
 Formal Public-
Public-Private Partnerships (PPPs) involving:
 Some contractual relationship between a
government and non-
non-state actor to provide
infrastructure and/or services
 Risk
Risk--sharing between the partners
 Defined outputs and service delivery standards
PPPs: More than Steel and Concrete

From Economic Assets to…Social Services & Public Administration

Pre-1990s 1990s 2000-onward


- Roads - Power - Health Care and Hospitals
- Water - Ports - Education and Schools
- Waste - Research & Development
- Telecom - Sports Complexes
- Rail - Vocational Training
- Airports - Tourism
- Prisons
- Environmental-related

- ???
Partnerships: Central to ADB Efforts to
Fighting Poverty in Asia and the Pacific
ADB “Strategy 2020” Context for
Partnerships

 ADB Strategy 2008-


2008-2020
– Three Development Agendas:
 Inclusive Economic Growth
 Environmentally Sustainable Growth
 Regional Integration
– Five Core Operational Areas:
 Infrastructure
 Environment, including Climate Change
 Regional Cooperation and Integration
 Financial Sector Development
 Education
 Scaling up private sector to generate growth and reduce
sector-related
poverty: By 2020, 50% operations private sector-
ADB “Strategy 2020” Context for
Partnerships

 Five Drivers of Change:


– Private Sector Development
– Good Governance and Capacity Development
– Gender Equity
– Knowledge Solutions
– Partnerships,, including:
Partnerships
 Other donors & international development agencies
 Private sector
 NGOs, CBOs, Civil Society Organizations (CSOs)
CSOs Seen as Supporting Quality of ADB
Operations

 Add value to sustainable development by


introducing:
– Innovation
– Accountability
– Responsiveness
ADB COOPERATION
WITH CIVIL SOCIETY – Participation
ANNUAL REPORT 2008
– Sustainability
 Role of ADB’s NGO and Civil Society
Center (NGOC)

See http://www.adb.org/ngos/ngocenter.asp#1st for more information


ADB Has a Mandate for Increasing Engagement
with Civil Society
Public-Private Partnerships (PPPs) in SE Asia
Public-
Region: More Hype than Reality?

 Expectations very high

 Since 1988 about 330 projects in


Southeast Asia with varying
degrees of success:
– Unsolicited proposals, e.g.
Indonesia power/roads in 1990s
– Philippines experience with N.
Luzon Expressway; water sector

 Bottom line: An uneven track


record and even some skepticism
No. of PPP Projects in Selected SE Asia Countries
(Financial Closure 1998-
1998-2008)

250

200
Vietnam
Thailand
150 Philippines
Malaysia
100 Lao PDR
Indonesia
Cambodia
50

0
Power Roads Ports Rails Water

Source: World Bank PPI Database


PPPs in Southeast Asia – State of Play

 PPP pipelines are weak


 International infrastructure-
infrastructure-financing banks have been severely
constrained, some signs of improvement
 Limited lending capacity of local banks to fill gap brought by decline of
external financing
 Investors remain interested…but need committed governments
 Status
– Vietnam: IPPs, roads, PPP policy & unit
– Indonesia: more fiscal space, ‘crash’ electricity generation program, overall PPP
framework
– Philippines: continued privatization of power assets, ???
– Laos & Cambodia: hydropower
– Greater Mekong Region power trade: Thailand, Cambodia, Laos and Vietnam

Source: ADB Special Evaluation Study on PPP, September 2009


The “Political Economy” of PPP:
Need to Recognize Lingering Perception Challenges
ADB Approach to Mainstreaming PPPs:
- Regional Departments, e.g. Southeast Asia Department (SERD)
- Regional and Sustainable Development Department (RSDD)
- Private Sector Operations Department (PSOD)

Capacity Development Project Development Financing


Policy, legal and regulatory Project Development Sovereign
guidelines Facility
Institutional development Pre-feasibility studies Non-sovereign
Building stakeholder Developing pipeline of Equity and debt
support/understanding bankable projects
Dedicated PPP units Tendering processes Political risk guarantees

TA and training Pilot PPP transactions Partial credit guarantees


Project monitoring Co-financing
TA and training Local currency
Infrastructure funds

ADB also supports complementary reforms in


infrastructure and financial sectors
ADB Projects with PPP-
PPP-Related Support
1998--2008
1998

Public Sector Loans Private Sector Operations


Region No. of Amount Region No. of Total
Projects ($M) Projects ($M)
Central and 32 3,710 Central and 6 325
West Asia West Asia
East Asia 34 6,096 East Asia 6 380

Pacific 3 33 Pacific 0 0

South Asia 53 8,145 South Asia 15 1,556

Southeast 16 2,626 Southeast 10 739


Asia Asia
TOTAL 138 20,610 TOTAL 37 2,999

Source: ADB Review of ADB Assistance for PPP in


Infrastructure Development, August 2009
ADB Experience with Infrastructure
PPPs….Key Lessons from Special
Evaluation Study

 Sustained political will and champions key to success


 Not universal solution or panacea
 Need to address policy and sector investment reforms
 Development of institutional, legal and regulatory frameworks
 Specialized PPP unit support services as generally useful
– Building a realistic project pipeline of bankable projects
– Feasibility studies
– Project preparation
– Tendering and negotiations
– Critical role of highly specialized technical/finance/legal experts
 Need long-
long-term engagement

Source: ADB Special Evaluation Study on PPP, September 2009


Summing Up and Some Possible
Discussion Points

 Substantial regional/global experience in provision of


infrastructure through PPPs, including water/sanitation
 Social sector PPPs as more challenging
 Cannot ignore the “political economy” of PPP: citizens are
more likely to tolerate low quality under public management
than under a PPP
 Importance of robust project development support to make
projects “bankable”
 Need to be careful not to “oversell” benefits of PPP without
effective public sector capacity development and
accountability mechanisms
Thank You

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