reaching the poorest - microfinance gateway€“december 2003 3 by omana nair external relations...

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1 November–December 2003 www.adb.org/review www.adb.org/review NEWS FROM THE ASIAN DEVELOPMENT BANK November–December 2003 NEWS FROM THE ASIAN DEVELOPMENT BANK November–December 2003 REACHING THE POOREST REACHING THE POOREST Microfinance Pawnshops Seen in New Light Cambodia Floating Villages Head for Higher Ground India Profitable Ports Law Matters Corporate Governance and Poverty Reduction Microfinance Pawnshops Seen in New Light Cambodia Floating Villages Head for Higher Ground India Profitable Ports Law Matters Corporate Governance and Poverty Reduction

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1November–December 2003

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NEWS FROM THE ASIAN DEVELOPMENT BANK November–December 2003NEWS FROM THE ASIAN DEVELOPMENT BANK November–December 2003

REACHINGTHE POORESTREACHINGTHE POOREST

MicrofinancePawnshops Seenin New Light

CambodiaFloating VillagesHead for HigherGround

IndiaProfitable Ports

Law MattersCorporateGovernance andPoverty Reduction

MicrofinancePawnshops Seenin New Light

CambodiaFloating VillagesHead for HigherGround

IndiaProfitable Ports

Law MattersCorporateGovernance andPoverty Reduction

2 November–December 2003

ADB Review, Office of External Relations, Asian Development Bank, P.O. Box 789,0980 Manila, Philippines; E-mail: [email protected]; Fax: (632) 636-2648;Web: http://www.adb.org/review.

In this publication, “$” refers to US dollars.

ASIA AND THE PACIFIC 3 POVERTY REDUCTION Reaching the Poorest

Reducing poverty while maintaining macroeconomicstability—can a balance be struck in poor countries?

4 POVERTY REDUCTION Violence and the PoorA study is looking at the rising tide of violence in Asia’scities—and what can be done to stop it

6 INFRASTRUCTURE Improved Port Paying OffThe development of Hera Port employed 800 workers—andpromises to help feed the country

7 MICROFINANCE Pawnshops Seen in NewLight Typically associated with desperation and exploitation,pawning is also a useful method of microlending

8 INDUSTRY Transformation Wonder Laiwu Steelprovides a model for modernizing the PRC’s state-ownedenterprises

ENVIRONMENT10 Carbon into Cash Vast potential exists for carbon

credits—and income—from Indonesia’s unproductiveforestland

11 Community Forestry: Benefitsto the PoorStrategies are being iden-tified to increase the foodand livelihood security ofsmallholder farm families

12 Floating VillagesHead for HigherGround An environ-mental initiative seeks toaddress poverty andenvironmentaldegradation

INDIA16 Seeing is

UnderstandingInternational journalistson a press tour get aglimpse of ADB’sdiverse activities in India

17 Guarding the PastIn a bid to boost tourism,Rajasthan’s heritage sitesare being restored andpublic infrastructure built

18 Profitable PortsPrivatization is giving thecompetitive edge to Indianports—and increasingcompetition between them

MEKONGSUBREGION20 Ministers Vow to

Speed Up PriorityProjects Mekong Rivercountries vow to increasecompetitiveness, connectiv-ity, and sense of community

21 Trade Links GrowingWith the PRC and ASEANcountries having forged afree trade agreement,Yunnan Province ispositioning itself to be inthe center of the action

DEPARTMENTS 7 PEOPLE

22 LAW MATTERSCorporateGovernance and Poverty ReductionSeeking the “right” model forbalanced growth poses achallenge to Asian countries

23 NGO NEWS

ABOUT THE COVERThese children live with 130 other squatter families onland that used to be a road in Phnom Penh, Cambodia.Due to inadequate drainage, the settlement sits onstilts above a fetid, black pool of sewage and waste.

Photo by David Kruger

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Volume 35, Number 6November–December 2003

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WATER LIVES The floatingvillages on the Tonle Sap inCambodia may soon be movingto dry land (see story, p. 12)

Press tour...............................16

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3November–December 2003

By Omana NairExternal Relations Specialist

Ways to accelerate povertyreduction in low-incomecountries in the region werethe focus of the Second

East Asia and Pacific Regional Conferenceon Poverty Reduction Strategies held inPhnom Penh, Cambodia, in October. Morethan 150 participants attended from six Asiancountries—Cambodia, Indonesia, LaoPeople’s Democratic Republic (Lao PDR),Mongolia, Timor-Leste, and Viet Nam—andfive observer countries—Bangladesh,Bhutan, Nepal, Papua New Guinea, andSri Lanka.

The Asian Development Bank (ADB),International Monetary Fund (IMF),United Nations Development Programme(UNDP), and World Bank sponsored thethree-day conference that started on 16October 2003. Delegations included a mixof government and civil society representa-tives, parliamentarians, and academics.The first conference was held in Hanoi,Viet Nam, in 2001.

In his opening address, H.E. SamdechHun Sen, Prime Minister of Cambodia,stated, “For the Royal Government ofCambodia, the war on poverty is not just apolicy, but a passion. Poverty reduction de-fines and drives the substance, the content,the heart and soul, and entire strategy ofour Government. Poverty reduction is notjust a requirement of social justice, or anaction of conscience, but also pragmaticeconomic management.”

The conference was a useful opportu-nity for partners to get together and discusshow to carry forward the poverty reductionstrategy and meet the challenges of imple-mentation. Many countries in the regionhave completed their first poverty reduc-tion strategies and have achieved impor-tant gains in making policies more pro-poorand processes more participatory.

Jan P. M. van Heeswijk, Director Gen-eral of ADB’s Regional and SustainableDevelopment Department, said in his

P O V E R T Y R E D U C T I O N

Reaching the PoorestReducing poverty while maintaining macroeconomicstability—can a balance be struck in poor countries?

opening remarks, “In Asia and the Pacific,optimism and hope have been intermit-tently clouded by heightened tensions andpersistent threats of terrorism amid a slow-down in global economic growth. However,the underlying long-term problems conti-

nue to be deprivation, lack of opportunity,inadequate participation, inequity, and asense of powerlessness.”

The conference themes—governanceand promoting participation, transparency,and accountability; pro-poor growth; wid-ening markets and trade, and the pursuit ofregional integration; and the challenges inmeeting the Millennium DevelopmentGoals and their linkages to poverty reduc-tion strategies—are seen as key to assist-ing Asia’s fight against poverty.

East Asia, home to some 1.8 billion peoplewith vast ethnic diversity and differences,has the most dynamic economy. However,200 million people in the region still earnless than $1 a day. The challenges require

each country in the region to strike a care-ful balance in its policy choices and em-phasis on growth, equality, and stability.

Addressing the local media, Mr. vanHeeswijk pointed out that the changingnature of the East Asian economic and fi-nancial landscape, combined with persis-tent governance problems in the region, hasimpacted negatively on the poor.

Brahm Prakash, ADB Director, PovertyReduction and Social Development Divi-sion, told journalists that countries couldlearn from East Asia’s growth-led povertyreduction experience that is unique in thedeveloping world. “In this sense, this confe-rence is not only about building further onthe experiences of the last two years but isalso about showing the way forward to thedeveloping countries that are lagging be-hind.”

Countries highlighted their success inreducing poverty while maintaining macro-economic stability, which is essential forpro-poor growth. The need for realistic bud-get frameworks, with adequate flexibilityto help meet shocks, was seen as a key ele-ment in successful implementation.

Since the majority of poor people live inrural areas, delegates stressed that investingin rural development and agricultural pro-ductivity—roads to markets, schools,health facilities, telecommunications, im-proved access to technology, and training—is a priority. Delegates explored other waysof taking advantage of trade opportunities.Strong calls were made for rich countries toreduce their barriers to poor countries’ ex-ports, and to advance multilateral tradeagreements.

Jacques M. Ferreira, ADB Principal Re-gional Cooperation Specialist, gave a pre-sentation on regional cooperation. Hediscussed how regional cooperation initia-tives contribute to growth and poverty re-duction in the developing countries of theregion. He cited as a success story the ADB-supported Greater Mekong SubregionEconomic Cooperation Program that wasestablished in 1992 (see story, p. 20).

Poverty reduction is not just a requirementof social justice, or an action of conscience, butalso pragmatic economic management

H.E. Samdech Hun SenPrime Minister of Cambodia

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4 November–December 2003

By Graham DwyerExternal Relations Specialist

With more than half theworld’s populationprojected to be livingin urban centers by2020, the dream of a

better quality of life is being underminedby an increasing menace—urban violence.

Surveys and poverty assessments showthat urban violence has risen by 3%–5%per year over the last 20 years—and thedegree of violence has intensified.

This violence ranges from street crime,such as muggings, robberies, and carjack-ings; to kidnappings, murder, drug-relatedviolence, and organized crime conductedby gangs; to assaults, sexual violence, andpersonal abuse.

Asia experiences lower rates of violencethan other regions. But it is home to an ex-plosive growth in urbanization, which bringsa threat of more violence.

“Exposure to violence is psychologicallytoxic and damaging. It inhibits productiv-ity and income-earning capacity, affects theinvestment climate, destroys infrastruc-ture, and disrupts delivery of services,” saysGulfer Cezayirli, an Asian DevelopmentBank (ADB) Senior Urban DevelopmentSpecialist.

However, addressing the problem isconstrained by inadequate data and knowl-edge on the extent, trends, and specificcauses of urban violence in Asia.

Mutually ReinforcingMost such studies are confined to Africaand Latin America. A few regional urban

VIOLENCEAND THEPOOR A study is looking at the

rising tide of violence inAsia’s cities—and whatcan be done to stop it

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5November–December 2003

poverty assessments allude to urban vio-lence, but have not carried out comprehen-sive investigations.

To fill this gap, ADB is undertaking astudy to strengthen approaches to urbanupgrading, poverty reduction, and pro-poorgovernance by increasing awareness of thelink between urban violence, poverty, andineffective governance.

Funded by a technical assistance grantof $150,000, the study will analyze thetypes of and reasons for violence, identifykey players and the most likely victims,and draw up common lessons and suitableoptions to mitigate urban violence andenhance public safety and security in urbanareas.

The grant comes from ADB’s PovertyReduction Cooperation Fund, financed bythe Government of the United Kingdom.

Previous studies indicate that urbanviolence, poverty, and ineffective gover-nance are inextricably linked and mutu-ally reinforcing.

“An inadequate urban environment andsocial and economic exclusion, coupled withinadequate access to safety services, lead todistrust, frustration, and hopelessness, andcontribute to circumstances that encourageurban violence,” says Ms. Cezayirli.

Conversely, urban violence mostly affectsthe poor as they live in vulnerable physicalconditions, cannot afford protection, andhave no access to private security services.

A lack of understanding of the complexnature of the problem and the link betweenpoverty and violence has led to governmentpolicies that focus on repression and con-ventional policing measures, with a pre-dictably limited impact.

Reducing Violence a PriorityUnder the grant, a comparative analysiswill be carried out in two Asian cities—most likely Dhaka and Phnom Penh. Threeother cities in Asia and Latin America willbe studied under a parallel exercise by theWorld Bank.

With one of the relatively higher vio-lence rates in the region, Phnom Penh’spoor, who constitute 25% of the city’s popu-lation, identify the reduction of violence,crime, and exploitation as among theirmajor needs.

Likewise in Bangladesh, where urbanpoverty levels are among the highest in theAsia and Pacific region, high levels of in-security and violence are major problemsfacing the poor.

Bangladesh also demonstrates the linkbetween weak governance and urban vio-lence. In the slums of Dhaka, the gover-

nance gap—in meeting the basic needs andproviding security for the poor—is filledby middlemen who control land allocationand services to poor communities, whilebeing widely engaged in violent actsagainst the poor, especially women.

“Urban violence and its consequentfeeling of insecurity erode the poor ’s socialcapital, dismantle their organizations, pre-vent social and physical mobility, and per-petuate poverty,” says Ms. Cezayirli.

“Unless urban violence—and its mani-festation of exploitation of the poor—areaddressed as part of poverty reduction andgovernance improvements, programs toimprove the lives of urban dwellers willhave limited impact.”

Sporadic initiatives have been taken tointegrate urban social and physical stra-tegies that mobilize effective partnershipsled by urban governments. But these havenot been replicated.

Innovative approaches are needed toaddress the multifaceted nature of violenceand specific security needs of the urbanpoor. Without this, the vision of a betterquality of life for city dwellers will remainjust a dream.

Surveys and poverty assessments show that urbanviolence has risen by 3–5% per year over the last20 years—and the degree of violence has intensified

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P O V E R T Y R E D U C T I O N

VICIOUS CYCLEUrban violence,poverty, andineffectivegovernance areinextricably linkedand mutuallyreinforcing

VICIOUS CYCLEUrban violence,poverty, andineffectivegovernance areinextricably linkedand mutuallyreinforcing

6 November–December 2003

By Graham DwyerExternal Relations Specialist

HERA, TIMOR-LESTE

With limited inshore marineresources that are vulner-able to overfishing, Timor-Leste has long faced the

challenge of providing sufficient and afford-able animal protein to feed its population.

The biggest obstacle has been the lackof port facilities for larger vessels that couldsail offshore to catch small, fast-growing,and abundant fish species, such as sardinesand mackerels.

But this is changing, with the helpof an Asian Development Bank (ADB)-administered port rehabilitation project in-augurated recently in Hera, about 16kilometers (km) east of the capital Dili.

The project is funded by a $1 milliongrant from the multidonor Trust Fund forEast Timor (TFET), which has financedmany essential infrastructure projects in thecountry.

“The project has built excellent facili-

The development of Hera Port employed800 workers—and promises to help feed the country

ties that will provide improved mooring andunloading facilities in Hera, and act as acenter for the handling and distribution offish for Dili and elsewhere,” says HelenBaxter, Social Protection Specialist ofADB’s Pacific Department.

“During project implementation, morethan 800 workers benefited from variousemployment opportunities, which alsobrought benefits to their families and thewider community.”

The project also emphasized local pur-chase of materials and the lease and hire ofequipment from the people of Timor-Lesteto help the local economy.

The scope of the project was relativelymodest—strengthening and repairing threebreakwaters totaling 140 meters (m) inlength, and rehabilitating the wharf facesof the harbor basin, totaling about 400 m.

In addition, the harbor basin was dredged,and aprons and side areas paved. Besides fa-cilities for larger boats, the port provides ice,and repair and maintenance for marine en-gines and other fishing equipment.

“Unskilled workers employed by theproject have received useful training in spe-

cial requirements for marine structures con-struction,” Ms. Baxter points out. “Thisshould ensure that the harbor can be main-tained on a sustainable basis in the future.”

Over five years, it is estimated the portwill yield an extra 1,360 tons of catch, pro-viding more than half the Food and Agri-culture Organization (FAO)-recommendeddaily per capita consumption of fish. Theproject is on track to achieve its aim of con-tributing to the long-term food security ofthe people of Timor-Leste.

Timor-Leste became ADB’s 61st mem-ber country on 23 July 2002. Besides theport project, ADB has also been assistingfunding agencies in preparing and carryingout TFET grant projects totaling $52.8 mil-lion. These include emergency infrastruc-ture, water and sanitation, and microfinancedevelopment projects.

Since 2000, ADB has also committed$8.6 million for 20 technical assistancegrant projects to Timor-Leste.

I N F R A S T R U C T U R E

Improved Port PayingOff for Timor-Leste

Over five years, it isestimated the portwill yield an extra1,360 tons of catch,providing more thanhalf the recommendeddaily per capitaconsumption of fish

VALUABLE CATCH Fish is an important partof the diet of people in Timor-Leste

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FISH CENTER New port facilities in Herawill provide a center for handling anddistributing fish for Dili and elsewhere

FISH CENTER New port facilities in Herawill provide a center for handling anddistributing fish for Dili and elsewhere

7November–December 2003

M I C R O F I N A N C E

By Graham DwyerExternal Relations Specialist

Pawning is probably the oldestmethod of lending, dating fromthe days of Babylon, the Bible,and ancient China. But today it

is an activity associated with desperationand exploitation that many policymakersand funding agencies would like to see cur-tailed.

Yet the prejudices against pawning areusually based on unrealistic or incorrect as-sumptions, according to Nimal Fernando,ADB’s Lead Rural Finance Specialist.

In an article in ADB’s quarterly news-letter on microfinance, Finance for the Poor ,Mr. Fernando argues that pawnshops are, infact, an important source of microcredit inmany developing countries, especially inAsia.

He says a fresh look is needed at theactivity and cites recent experiences in In-donesia and Sri Lanka.

“Pawnshops provide an important finan-cial service to poor and low-income house-

Pawnshops Seenin New LightTypically associated with desperation and exploitation,pawning is also a useful method of microlending

holds by offering credit at rates that arebetter than those of informal commercialmoneylenders,” he writes.

“The clients are able to convert theirnonfinancial assets quickly into cash forshort periods, whenever needed.”

He points out that far from being ex-ploitative, pawning gives poor and low-income households in Asia a chance to takeunproductive holdings, such as gold andjewelry, and convert them for productivepurposes by pledging them for loans.

Both the clients and lenders benefitfrom minimal transaction costs. Also, thereis no need for the latter to collect and ana-lyze information on creditworthiness, apartfrom appraising the asset reasonably andcarefully. Pawnshops’ record keeping andaccounting are also simple and low cost.

“Although pawning has its limitations,pawnshops add to the institutional diver-sity of the microfinance landscape and pro-vide a useful service as microcreditinstitutions to poor and low-income house-holds in countries where there are no severelegal restrictions on their operations,”Mr. Fernando concludes.

PERSPECTIVE Pawnshops providean important financial service topoor and low-income households

BEIJING, PEOPLE’S REPUBLIC OF CHINA

The Asian Development Bank’sCountry Director in the People’sRepublic of China (PRC), Bruce

Murray, received a 2003 “FriendshipAward” from the PRC Government. TheFriendship Award is the highest awardpresented by the Government to foreignexperts.

The Ministry of Finance, which nomi-nated Mr. Murray, cited the contribu-tions that ADB has made toward thePRC’s economic and social develop-ment.

The State Administration of ForeignExperts Affairs, authorized by the StateCouncil of the PRC, established this state-level annual award in 1991 to recognizeparticularly significant contributions offoreign experts in diverse fields. To date,716 foreign experts from 54 nationshave received the prestigious award. In2003, 50 people from 19 countries wereselected to receive the Friendship Awardfrom among the 400,000 foreign expertsworking in the PRC on long-term assign-ments.

PRC CountryDirector ReceivesFriendship Award

P E O P L E

Bruce Murray, PRC Country Director,receiving the Friendship Award fromVice Premier Wu Yi for ADB’sdevelopment efforts

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I N D U S T R Y

By Graham DwyerExternal Relations Specialist

LAIWU, PEOPLE’S REPUBLIC OF CHINA

Back in 1992, the Laiwu Ironand Steel Company (LSC)was a relatively small opera-tion, producing low-qualityproducts for the local market

in the People’s Republic of China (PRC).Now a little more than 10 years later,

after receiving assistance from the AsianDevelopment Bank (ADB), it is thecountry’s 12th largest steel-producing com-pany and a world leader in high-qualityconstruction products.

The transformation provides a modelfor reform and privatization of the PRC’sstate-owned enterprises (SOEs) and mod-ernization of the steel industry.

It has also proven a shot in the arm forthe Laiwu region, in the eastern province

of Shandong, which in 1992 was poor andin need of modernization.

The origins of the project date back tothe mid-1980s when, during ADB’s firstcountry programming mission, the Govern-ment requested assistance for a pilot projectto expand and modernize an iron and steelcomplex.

“Because it was close to abundant natu-ral resources and growing local markets,Laiwu was chosen as the most suitable plantfor development,” explains Richard Simpson,an ADB Principal Evaluation Specialist.

A $133 million loan with a complemen-tary technical assistance grant was approvedin March 1992 to reform and restructurethe steel plant and expand an existing ironand steel mill. The project marked the firststeel plant to be financed by ADB, chosenbecause of its potential to reform the sec-tor by introducing best practices and mod-ern management programs.

The total project cost at appraisal was$328 million, financed by the ADB loanwith cofinancing from the Export-ImportBank of Japan, a complementary loan fromcommercial sources, loans from domesticbanks, equity from the province, and thecompany’s internal resources.

Laiwu Steelworks provides amodel for modernizing thePRC’s state-owned enter-

prisesAlternative NeededBut the project was not commissioned un-til June 1999, 39 months behind scheduleand with a $190 million cost overrun.Behind the delay and increased cost was amajor change in one of the project compo-nents.

“It became apparent that there was al-ready a glut of welded pipes in thedomestic market. So the planned weldedpipe mill became financially and econo-mically unviable,” explains Don Jacobson,an international steel expert and ADB con-sultant.

“An alternative had to be found to uti-lize the raw steel that would be producedfrom the expanded steelmaking facilitiesat Laiwu.”

After extensive technical and marketresearch, it was decided to substitute a millthat would make high value-added steelfor the construction industry, for which aready domestic market was projected.

This, however, came at a higher cost be-cause of more expensive equipment and ex-tensive upgrading of facilities. Additionalcivil works, high domestic inflation, and in-creased staff costs due to the delay were otherfactors in the cost overrun.

The change of scope proved to be fortu-nate, though.

“One of the ‘secrets’ of LSC’s successhas been its recognition of the need to fo-cus on a growth market where there werefew competitors, in this case larger struc-tural steel sections, and serve that marketexceptionally well,” says Mr. Jacobson.

“Without the project, as it now stands,the company probably would not have sur-vived,” Mr. Simpson adds. “It was able toforesee the rapid changes in the constructionindustry, and adapt its strategy accordingly.”

World LeaderOutput at the plant was increased from theoriginal capacity of 240,000 tons per annumto about 628,000 tons per annum of fin-ished steel products. The actual plant ca-pacity was due to be about 2.8 million tonsby the end of 2002, of which about 2.2 mil-lion tons will be produced by the project-related equipment.

As a result, Laiwu now dominates thePRC’s production of high-quality construc-tion steel, and is a world leader in its field.Some 10% of production is exported to else-where in Asia, including Hong Kong, China;Japan; and Singapore.

TRANSFORMATION WONDERTRANSFORMATION WONDER

9November–December 2003

Officials estimate that the project createdabout 10,000 new jobs in the region

that per capita income in the region hastripled since the project began.

The company is the largest employer inLaiwu, the number of employees rising from11,700 before the project in 1996 to 15,600in 2002. Additionally, officials estimatethat the project created about 10,000 newjobs in the region.

An Example to EmulateEqually dramatic has been the transforma-tion in the Laiwu plant’s own corporateculture. The project has enabled it to func-tion as a modern, publicly listed corpora-tion—a first for a steel company in the PRC.

“One of the key objectives of the projectwas to introduce modern managementpractices into the company,” saysMr. Jacobson.

With ADB technical assistance, theplant was listed on the Shanghai StockExchange in 1997, when 18% of the shareswere listed. Two further issues followed,

“With the prospects of providing mostof the construction steel needed to buildfacilities for the 2008 Beijing OlympicGames, Laiwu expects to be ranked amongthe top 50 international steel companiesby 2005.”

Largest Employer in LaiwuOther benefits have included consider-able energy savings, with coal gas con-sumption per ton of steel only about onethird of that before the project. This hasled to less noise, as well as less air andwater pollution.

The savings have been achieved throughcontinuous production processing, moderntechnology, recycling, reuse of waste gas,and cogeneration. These processes havesince been adopted by other steel plantswithin the PRC.

The impact of such efficiencies goesbeyond environmental improvement. Theprovincial labor department has estimated

which increased the public shareholding to22%. The plant now operates in a free mar-ket, without subsidy or protection. It paystaxes and operates like a private company.

As it works toward consolidating itsachievements and building better market-ing and corporate governance, the plant islooking forward to forming a strategic part-nership with a foreign company.

“In transforming a struggling SOE intoa successful enterprise with a significantprivate sector shareholding, the project isseen by government agencies as a modelthat other SOEs could emulate,” Mr.Jacobson concludes.

“Its example will help promote theongoing reform and restructuring program,not just in the iron and steel sector, butelsewhere in the economy.”

LOCAL BOOST The provinciallabor department has estimatedthat per capita income in theregion has tripled since theproject began

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By Graham Dwyer External Relations Specialist

Out of Indonesia’s more than 100million hectares (ha) of forest-land—accounting for almosthalf the forest in Southeast

Asia—some 12% is lying idle and unpro-ductive.

Yet potentially, through forestation pro-grams under the Clean DevelopmentMechanism (CDM) of the Kyoto Protocol,these areas could absorb 45–300 tons ofcarbon dioxide—the main greenhousegas—per hectare per year.

To help stakeholders in the country bet-ter understand the processes, implications,and potential applications of the CDM, anew Asian Development Bank (ADB) tech-nical assistance project will pilot test car-bon sequestration project designs. Fundedby a $700,000 grant financed through theCanadian Cooperation Fund for ClimateChange and administered by ADB, it isADB’s first technical assistance to addresscarbon sequestration.

Carbon dioxide accounts for about halfthe total global warming potential fromgreenhouse gases, which could cause globalaverage temperatures to rise by 1.4–5.8 oCbetween 2001 and 2100 if no preventiveaction is taken.

Such changes in global temperaturewould reduce the polar ice cover, raise thesea level, and cause unpredictable weatherpatterns. The most vulnerable to thesechanges would be the poor, who often livein the marginal lands that are at the mercyof adverse weather, such as floods, droughts,and storms.

Under the Kyoto Protocol, agreed to in1997 by the Conference of the Parties ofthe United Nations Framework Conventionon Climate Change, participating deve-loped countries and economies in transi-tion have agreed to meet, by 2008–2012,greenhouse gas emission reduction targets.

The countries can meet these commit-ments in many ways—through domesticaction, joint implementation of greenhouse

E N V I R O N M E N T

Carbon into CashVast potential exists for carbon credits—andincome—from Indonesia’s unproductive forestland

gas reduction projects, emissions trading,and the CDM, which allows projects in de-veloping countries to earn certified emis-sions reduction (CER) units for reducinggreenhouse gases.

The CER units must be registered withthe CDM Executive Board. The project maythen sell, save, or barter the CERs, like acommodity, through private contracts, auc-tion, or exchange markets, providing addi-tional income. Potential buyers and usersof the CERs are industries and governmentsin developed countries. One way of earningCERs is through reforestation and affores-tation of denuded land.

ADB’s technical assistance will addresssome issues, including establishing defini-tions such as baselines, nonpermanence,leakage, and socioeconomic and environmen-tal impacts, and will apply methodologiesacceptable under the Kyoto Protocol forcarbon sequestration projects in Indonesia.

The Ministry of Environment, the focalministry for climate change in Indonesia,will be the executing agency.

For more information on the Canadian Coop-eration Fund for Climate Change, go to http://www.adb.org/REACH/canada.asp. To readabout the Clean Development MechanismFacility, go to http://www.adb.org/CDMF

CARBON INTO INCOME Indonesia’s forestscan provide resources beyond wood

E V E N T

LARGE TURNOUT About 70,000 peoplevisited the event, which is the world’sonly festival on internationalcooperation. Participating in the eventwere 110 nongovernment organizationsand 80 public organizations, includinginternational institutions, embassies,and government aid agencies. ADB’sbooth was well visited

INTERESTED IN ADB Tsukasa Maekawa,ADB Principal External RelationsSpecialist, explains ADB activities tovisitors at the ADB booth at theInternational Cooperation Festival, heldon 4–5 October 2003 at Hibiya Park incentral Tokyo

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By Graham DwyerExternal Relations Specialist

Most of the Greater MekongSubregion’s 80 million poorlive in rural areas, often inor near forests, with some of

the poorest belonging to ethnic minoritiesin remote upland areas. For these people,forests function as both safety nets and anessential source of daily income and food.

For example, many rural communitiesin the Lao People’s Democratic Republic(Lao PDR) derive virtually all their food—except rice—from the forests. Nonwoodproducts provide, on average, more than halfthe cash income for families living near for-ests.

These communities are highly vulner-able to, and threatened by, deforestation,which has been accelerating from an aver-age of about 0.7% annually in the early1980s to almost 2% in the late 1990s. Morethan 1.1 million hectares of forestland hasbeen lost annually.

“If the environmental challenges fac-ing upland development are not managed,the poverty reduction efforts in these areaswill not be sustained and the already vul-nerable upland communities, particularlyethnic minorities and women, will bepushed deeper into poverty,” says JavedHussain Mir, an Asian Development Bank(ADB) Senior Natural Resource Special-ist. “To give poverty reduction strategiestheir full impact, particularly in the for-est and natural resource sectors, the po-tential of the Mekong upland forests mustbe harnessed.”

To help achieve this, ADB has approveda technical assistance grant of $800,000,from the Poverty Reduction CooperationFund, financed by the Government of theUnited Kingdom, to improve the povertyreduction potential of community and in-dustrial forestry in three Mekong countries.

Focusing on Cambodia, Lao PDR, and

Viet Nam—especially provinces that havea high incidence of poverty—the grant willidentify strategies to increase the food andlivelihood security of smallholder farm fami-lies and communities living in or nearremote and inaccessible forests. It will alsoassess the potential of community forestry

to reduce poverty in the upland communi-ties of the three countries, and chart theimpact of changes in the forest sector andthe forest product trade in the Mekong.

“Industrial forestry, which involveslarge-scale forest resource management andprocessing, has good potential to create jobsand income provided it is done in a respon-sible manner,” says Mr. Mir.

Interest in community forestry ap-proaches, which require the participationof communities and key stakeholders in allaspects of forest planning and management,has been increasing in recent years. Com-munity and industrial forestry has beendeveloped in accessible areas, primarily tomeet the need for revenue and wood.

Some forms of community forestrywould involve the use and sale of nonwoodforest products for subsistence or the pres-ervation of essential local environmentalservices. Other forms would need to focuson commercial timber and harvesting ofnonwood forest products.

But institutionalizing such approacheshas proven difficult because of problems

related to tenure and access,sharing of costs and benefits ofjointly managed resources, andagreement on the roles and re-sponsibilities of governmentagencies and communities.

The grant’s participatorymultistakeholder evaluationof community and industrialforestry initiatives aims toenhance their poverty reduc-tion impact. Equally impor-tant will be involvingpolicymakers more in the in-dustrial policy reform agendato promote sustainable forestresource management to re-duce poverty among uplandcommunities.

ADB’s grant will be im-plemented over the next15 months. A report will be pre-pared in collaboration withparticipating communities,line agencies, and keypolicymakers and projectimplementers. The proposedaction plans for improving theperformance and impact offorestry on poverty reductionwill be presented and validated

at a national multistakeholder workshop ineach country.

The total cost of the grant is about$1 million, of which the Center for Inter-national Forestry Research, the Food andAgriculture Organization of the UN Re-gional Office for Asia, and participatingcommunities will contribute $200,000equivalent.

Strategies are being identified to increase the foodand livelihood security of smallholder farm families

E N V I R O N M E N T

Community Forestry:Benefits to the Poor

Caro

line

Hei

der

Forests function as bothsafety nets and an essentialsource of daily income and food

12 November–December 2003

E N V I R O N M E N T

By Ian FoxPrincipal Project Specialist (Natural Resources)Agriculture, Environment, and NaturalResources Division, Mekong Department

CHONG KNEAS, CAMBODIA

Every spring, melting snows inthe Himalayas spark off a re-markable chain of events in dis-tant Cambodia that affects thelivelihoods of some of the

world’s poorest people.As it leaves the Lao People’s Demo-

cratic Republic (Lao PDR), the mightyMekong River crashes over the KhonPhapheng Falls, just south of the 4,000 is-lands of Siphandon where the width of theriver spans 14 kilometers (km)—the widestit ever reaches. It then flattens abruptly andmeanders for another 500 km through theplains of Cambodia to reach the delta ofsouthern Viet Nam.

Boosted by monsoon rains and with itsgradient now too flat to retain the flowwithin its banks, the river spills out overlarge parts of Cambodia, where up to 65% ofcultivated land is covered each year by flood-water. The Tonle Sap River, which joins theMekong at Phnom Penh, acts as a safetyvalve by absorbing part of the excess. It re-verses its flow from mid-May to October,massively expanding the volume of theTonle Sap Lake, 100 km “upstream,” closeto the famed temple complex of Angkor Wat.

The lake swells from its dry season sizeof some 2,500 km2 to about 13,000 km 2,inundating vast areas of vegetation thatserve as feeding and breeding grounds forcountless varieties of fish, making the lakeone of the richest areas in the world for fresh-water fish. In a land as poor as Cambodia,this is a wonderful nutritional bounty,accounting for two thirds of the country’sprotein.

Floating Villages Headfor Higher GroundAn environmental initiative seeks to address poverty and environmentaldegradation—and provide hope of a brighter future for some of the world’s poorest

Harsh ExistenceThe annual shifting of the lakeshore bysome 6 km has created a highly unusualliving pattern for the people in the com-munity of Chong Kneas at the northwest-ern end of the lake. Some 5,000 people liveon houseboats moored within the lake dur-ing the dry season and move “inland” alonga narrow channel as the waters rise. Otherfamilies, who live along the road embank-ment beside the channel, load their housesonto the backs of trucks to seek higherground as the water rises. The whole com-munity settles around an isolated hill atPhnom Kraom when the lake is at its high-est level.

While the floating villages are a pictur-esque tourist sideshow for visitors to thenearby temples, for the people who live onthe boats and the peripatetic houses, thisis a harsh existence. But it is one they havetolerated because of the livelihood theyderive from fishing. Some members of thefloating population were once farmers whofled to the lake in the 1970s when they losttheir land during the Khmer Rouge’s reignof terror; but others, many of Vietnameseorigin, have been there much longer andhave known no other life.

The houseboats and other transportabledwellings have no sanitation and waste dis-posal facilities, electricity, or drinking wa-ter connections. Many houseboats havecages tethered to them in which fish arefattened with the waste products from fishprocessing and the dwellings themselves.Some risk prosecution by fattening croco-diles in these semisubmerged wooden cagesprior to smuggling them to commercialmarkets for their skins and meat.

Taking an Integrated ApproachAlthough Chong Kneas does not have aproper dock, it is the access point from the

lake to the important town of Siem Reapfor cargo and tourist traffic. Tourists walkalong makeshift planks to board tour boats,and the movement of cargo is difficult. Thesite is hazardous for passengers, unhygienicfor fish handling, and susceptible to oil andfuel spills.

The air is fetid with rotting organic de-tritus. Nonbiodegradable solid waste littersthe shoreline and shallow waters. All kindsof liquid and solid wastes are disposed of inthe water alongside the road and becometrapped within the channel, which is notnaturally flushed. The pollutants accumu-late until the water level is sufficiently highto connect all points of the channel withthe general body of water in the lake—which in turn becomes more polluted.

Environmentalists throughout the worldare increasingly taking an integrated ap-proach to environmental and poverty is-sues. Management of entire river basins asa single unit can maximize the benefit topeople without compromising the ecosys-

NO MORE HOUSEBOATSResidents say theywould prefer to liveon the land and haveaccess to clean waterand sanitation

13November–December 2003

tems on which future generations will de-pend. The Government of Cambodia es-tablished the Tonle Sap Biosphere Reservein 2001 as a focal point for environmentalmanagement. In turn, the Tonle Sap Envi-ronmental Initiative, fostered by a consor-tium of multilateral and bilateraldevelopment agencies, is undertaking spe-cific actions to address the twin problemsof poverty and environmental degradationin the river basin. Chong Kneas has beenidentified for special attention.

Learning What the People WantAny illusions that living on boats was a cul-tural tradition that people cherish and wishto preserve were shattered when the villag-ers were consulted about their living con-ditions. Overwhelmingly they said thatthey would prefer to live on the land andhave access to clean water and sanitationas well as have their children go to properschools instead of the poorly maintainedfloating school.

While the status quo is clearly unac-ceptable, given the lack of income-earningopportunities, high levels of illness, shortlife expectancy, and generally arduous liv-ing conditions of the poor, environmental-ists are also anxious to reduce pollution andother forms of human impacts on the lake.Both the national and regional governmentsalso want to see Chong Kneas become a vi-able boat landing site, serving the commer-cial and tourism needs of Siem Reap andsurrounding areas.

With funding from the Government of

Finland, the Asian Development Bank(ADB) has embarked on a yearlong techni-cal assistance project to explore potentialsolutions to the unique problems of ChongKneas. The starting point, initiated earlierthis year, was to find out what the peoplethemselves wanted. From workshops andindividual visits to families on their house-boats emerged the initial clear message ofa desire to move onto the land. At the sametime, it is becoming equally clear that thevillagers would like to continue fishing astheir primary livelihood.

In recent years, resettlement has be-come one of the most controversial subjectson the development agenda. It has gener-ally been involuntary to make way for

dams and other infrastructure and, too of-ten, in the past the unfortunately named“oustees” have not been adequately com-pensated or able to find comparable liveli-hoods in their new communities.

Chong Kneas is different in that the vil-lagers want to move. The challenge to theGovernment and its international develop-ment partners is to ensure that villagers aretreated equitably and, in addition to animproved physical quality of life, have equalor greater earning opportunities.

More Fulfilling LivesCurrent thinking on flooding, whether itbe an annual occurrence like that of theTonle Sap Lake, or an unpredictable resultof extreme weather, is toward managementrather than control.

Historically, the reverse was true. Floodshave largely been considered a threat andmuch money has been spent building costlybarriers to keep water inside river channelsand out of the way of people and infrastruc-ture. In large urban areas, there is a lot to besaid for this approach. But too often theselarge structural barriers have made the livesof the poor harder, interfering with the eco-systems of wetlands and introducing newrisks associated with failure of the highflood protection barriers themselves, oftenresulting in death and destruction.

At Chong Kneas, the options being con-sidered to improve the welfare of inhabit-

ants of floating villages are likely to involvea more modest, but practical civil engineer-ing solution. Studies currently under waysuggest that a new and wider channelshould be excavated from the edge of LakeTonle Sap to the foot of Phnom Kraom, therocky hill that rises some 140 meters abovethe otherwise flat terrain. At the end of thechannel, proper boat landing and cargo-handling facilities with year-round accesswill be built to accommodate passenger andcargo boats as well as the fishing boats ofthe former floating villages.

All of the earth excavated for the chan-nel and boat landing area would be used tobuild an extensive “platform” beside theexisting hill. This could be the permanent

site of the Chong Kneascommunity, with land al-located for houses and ser-vices such as water supply,sanitation, waste collec-tion, electricity, schools,

clinics, markets, and administrative build-ings. No longer would children have to drinkdirectly from water beside their boats—water that is a little better than untreatedsewage in the dry season. Infant mortalityand the high incidence of disease shouldbe greatly reduced. Proper schooling and ahost of social services previously denied tothe villagers will help them live more ful-filling lives. While fishing will remain theirpreferred source of income, other employ-ment opportunities associated with fishprocessing, the new landing facilities, andtourism will all open up to the villagers.

Over the next few months, the processof consultation with the floating villagerswill intensify to ensure that they are in thedriving seat in determining their future liv-ing conditions and livelihoods. It will beimportant that all voices are heard, espe-cially those of the most vulnerable, such asfemale heads of households and the ethnicminority population of Vietnamese.

Taken together, the anticipated changesat Chong Kneas will draw the human settle-ment within the Tonle Sap Biosphere Re-serve farther f rom the lake, eliminatesources of pollution and, above all, providehope of a brighter future to some of the world’spoorest and most deprived people.

This article originally appeared in Gulf News,Dubai. It is reprinted with permission.http://www.gulfnews.com

Chong Kneas is different:the villagers want to move

Eric

Sal

es

14 November–December 2003

By Graham DwyerExternal Relations Specialist

A growing population and declin-ing fisheries production haveleft Indonesia facing a widen-ing gap between supply and

demand for fish.Fish provide two thirds of Indonesians’

animal protein. And with catches frommarine fisheries in decline, aquaculturecould dominate the fishing industry as amajor source of sustenance, jobs, and ex-port earnings.

To help the process along, the AsianDevelopment Bank (ADB) is preparing anaquaculture project in Indonesia under atechnical assistance (TA) grant of $800,000to boost fish production and improve thelivelihoods and nutrition of poor fish farm-ers in Indonesia.

The grant is financed by the Govern-ment of the United Kingdom.

“Because of its rich coastal resources andnumerous inland water bodies, Indonesiahas rich potential for aquaculture develop-ment,” says Weidong Zhou, an ADB SeniorAgriculture and Natural Resources Man-agement Specialist. “The TA will assessthe state of aquaculture development, andidentify the major problems, opportunities,and strategies to achieve sustainablegrowth in the industry.”

Three main types of aquaculture arepracticed: freshwater, brackish water, andmariculture. Farmed species in freshwa-ter systems are carp, tilapia, and gouramy.Brackish water culture has mainly milk-fish and prawns. Mariculture operationsuse rafts, cages, and pens to cultivate spe-cies such as grouper, sea perch or barra-mundi, rabbit fish, seaweeds, and pearloysters.

There are an estimated 2 million fishfarmers in Indonesia, with half of themfishing on a small scale and in freshwater

Aquaculture holdspotential to fill the gapleft by declining fisheriesin Indonesia

ponds. In 1997–2001, prawn exports av-eraged $800 million, contributing to halfthe value of all fishery products.

The aquaculture industry covers anarea of about 681,000 hectares (ha). Yetthis is less than 3% of the total potentialarea, which is estimated at 26 million ha,comprising coastal waters; rivers, lakes,ponds, and paddy fields; and brackish-water ponds.

The envisaged $50 million project, inthe pipeline for 2004, would rehabilitatemanagement systems for the traditionallycultured freshwater species and developtechnologies for other high-value speciessuch as eels and turtles.

It would also improve management oftraditionally cultured brackish-water andmarine species and develop technologiesfor new species such as sea horses andwrasses.

Total aquaculture production in 2002reached 1.14 million tons, half of whichcame from brackish-water ponds, account-ing for 19% of total fishery production.Together with catch fisheries, the grossvalue of fisheries output was estimated toreach $5 billion in 2000, or about 5% ofthe output of the agriculture sector and2% of the total economy.

But aquaculture growth has been ham-pered by several problems, notably environ-mental degradation, low growth, andproductivity due to poor management, andlack of credit facilities for poor fish farmersand marketing infrastructure.

In 2002, poverty incidence in Indone-sia was about 18% of the total population.The provinces of North and South Sumatra,West Java, West Nusa Tenggara, Lampung,and Southeast Sulawesi, the sites for theproposed TA study, account for one third ofthe rural poor.

As aquaculture is an important alterna-tive livelihood source for poor rural com-munities, the Government in the last fiveyears has been giving increased emphasisto fisheries and aquaculture development.

It aims to play a catalytic role in devel-oping effective policies for better watermanagement and financial provision forsmallholders, and to harness the vast hu-man resources potential, especially at thecommunity level.

ADB, for its part, over the last two de-cades, has financed seven projects for aquac-ulture development in Indonesia, four ofwhich are ongoing. However, earlier projectscovered a limited coastal area and suffereddifficulties in technology adaptation, lackof access to land and water resources, ineli-gibility for institutional credit, and aver-sion to risks.

“Lessons learned from previous projectshighlight the need to promote an appropri-ate policy environment and a rigorous as-sessment of the capacities of executing andparticipating agencies to deliver support

services to beneficiaries,” says Mr. Zhou.“The upcoming project will give more em-phasis to reducing poverty and regional in-equalities, ensuring food security, andpromoting environmental management.”

The TA, to be carried out to June 2004,will involve potential beneficiaries andstakeholders in preparing the project andwill identify strategies, approaches, andoptions to reduce poverty and enhance en-vironmental protection.

The total cost of the TA is estimated at$1.12 million, of which the Governmentwill contribute $320,000 equivalent.

FISH FIX

Aquaculture is an important alternativelivelihood source for poor rural communities

Take

shi T

akah

ara

E N V I R O N M E N T

15November–December 2003

For these and other publications, contact the Asian Development Bank Publications UnitP.O. Box 789, 0980 Manila, Philippines; Fax: (632) 636-2648; E-mail: [email protected]

http://www.adb.org/Publications

New PublicationsCapacity Building for Environmental Law inthe Asian and Pacific Region: Approaches andResources (Second Edition)Edited by Donna G. Craig, Nicholas A.Robinson, and Koh Kheng-LianVolume I: ISBN 971-561-497-3Volume II: ISBN 971-561-504-XPrice: $50 per volume (hardback)

In two volumes, this work adopts abroad view of sustainable develop-ment as the basis of modern environ-mental law, with an emphasis on social justice and equity.This second edition includes a new foreword and updatedinformation, including the contents of the Plan of Implementa-tion adopted at the World Summit on Sustainable Developmentin Johannesburg, South Africa, in September 2002.

PACIFIC STUDIES SERIESInformation and CommunicationTechnology for Developmentin the PacificISBN 971-561-486-8Price: $10 (paperback)

This publication illustrates the positiverole information and communicationtechnology can have in assisting govern-ments to reduce poverty and improvesocioeconomic development in thePacific.

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This book presents the innovationsbrought to the Papua New Guineahealth sector by the Health SectorDevelopment Program, which wasdesigned to support the implementa-tion of long-term reforms.

Asian Water Supplies:Reaching the Urban PoorBy Arthur C. McIntoshISBN 971-561-380-2Price: $15 (paperback)

This book is a guide and source on urbanwater supplies in Asia for governments,utilities, consultants, development agen-cies, and nongovernment organizations.

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This publication analyzes the bond mar-kets of the People’s Republic of China;India; Indonesia; Republic of Korea;Malaysia; Pakistan; Philippines; Sri Lanka;Taipei,China; and Thailand.

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Poverty, Growth, and Institutions inDeveloping AsiaBy Ernesto M. Pernia and Anil B. DeolalikarISBN: 1-4039-1806-6Price: £60 ($100) (hardback)Published for ADB by Palgrave Macmillanhttp://www.palgrave.com/economics/monographs/

The theme of this book is that while economic growth is key,institutions and other national and subnational attributesmatter as well.

Monetary and Financial Integration in Asia:The Way AheadVolume 1: ISBN 1-4039-1882-1Volume 2: ISBN 1-4039-2086-9£100 (pack of two volumes, hardback)Published for ADB by Palgrave Macmillanhttp://www.palgrave.com/economics/monographs/

This two-volume set takes up the issue of developing a roadmap of policy options, both at the regional and country levels,for carrying forward the ongoing efforts in monetary andfinancial cooperation in East Asia.

A D B B O O K S T O R E

15November–December 2003

16 November–December 2003

By Omana NairExternal Relations Specialist

MYSORE, KARNATAKA, INDIA

Kuderamala, a 30-year-old slumsettlement in Mysore, recentlyreceived a special group of visi-tors: a team of international

journalists. The women arranged a ceremo-nial welcome for 11 journalists who wereparticipating in a weeklong press tour tovisit Asian Development Bank (ADB)-assisted projects in India, complete withflowers and much celebration.

Maneuvering a group of foreignersthrough the alleys of an Indian slum waschallenging. Except for the Indian and Fili-pino journalists, most others—from France,Germany, Indonesia, Japan, Republic ofKorea, Switzerland, and Thailand—hadnever been inside a slum before.

The children, who were extremelyfriendly, requested the journalists carryingcameras to take their pictures. Many in thegroup were surprised at being the focus ofso much excitement and joy. But then theyrealized that in a settlement like Kudera-mala, receiving guests from faraway placesis not a common occurrence.

Organized by ADB’s Office of ExternalRelations in collaboration with the IndiaResident Mission, the objective of the presstour was to showcase to media representa-tives ADB activities, particularly its efforts

Seeing is UnderstandingInternational journalists on a press tour get a glimpseof ADB’s diverse activities in India

in poverty reduction in India. Apart fromresulting in good coverage and exposure,press tours also help foster solid professionalrelationships between ADB and the media.

Most journalists said the visits to theurban poor areas of Karnataka and Raj-asthan were a real eye-opener. “They re-minded me of the things I’ve alreadylearned to take for granted,” said JintanaPanyaarvudh, National News Editor atThe Nation newspaper in Bangkok.

Several journalists were moved by howthe human spirit can flourish in such poorphysical conditions. “I believe this grouphas come face to face with a side of Indianot often penetrated by outsiders. And Ibelieve we will be better human beings forhaving encountered it,” said Setsuko

Kamiya, a journalist from The Japan Times .On the first leg of the tour, the group

drove along the Delhi-Jaipur highway,which was financed under an ADB loan, andwas briefed by officials of the NationalHighway Authority of India. In Jaipur, thecapital of Rajasthan, the journalists walkedthrough cleaned slum alleys, interviewedproject beneficiaries, and visited the his-toric Chand Pol gate where renovation andconservation works are being done throughthe Rajasthan Urban Infrastructure Devel-opment Project (see story, p.17). They alsospoke with representatives from the execut-ing agency and participating nongovern-ment organizations.

From Rajasthan, the group visited com-ponents of the Karnataka Urban Infrastruc-ture Development Project in Mysore, in thestate of Karnataka. The journalists alsovisited the Mysore University to interactwith the academics and students to get abetter understanding of the informationand communication technology develop-ment in the state. They also met with rele-vant private sector representatives andofficials from the Karnataka Urban Infra-structure Development and Finance Corpo-ration in Karnataka’s capital city, Bangalore.

The press tour ended in Chennai in thestate of Tamil Nadu, where the journalistsvisited the state’s first tollway project,thermal plant, and two ports: Chennai Portand the newly commissioned Ennore Port(see story, p. 18).

“The press tour gave us the opportunitynot only to discover the country, but alsoits people and the changes happeningwithin the fabric of Indian society,” saidRichard Werly from Le Temps newspaper inGeneva. “The experience was fascinating.”

Takehiko Kajita, from Kyodo NewsAgency, said, “Although we journalists re-port a lot on poverty alleviation, very few ofus know what poverty is really all about.Having seen poor Indians’ lives, I cameaway with the feeling that I would be ableto approach the issue from a differentangle.”

I N D I A

Although we journalists report a loton poverty alleviation, very few of usknow what poverty is really all about

Takehiko Kajita, Kyodo News Agency

“ “

Om

ana

Nai

rO

man

a N

air

EYE-OPENER Journalistssaid the press tour gavethem insights into poverty

17November–December 2003

By Omana NairExternal Relations Specialist

JAIPUR, RAJASTHAN, INDIA

Rajasthan’s rich history is visiblein the forts and palaces that dotthe arid landscape of the harshThar Desert. These monuments

are a microcosm of images from the past—and perhaps an indication of great thingsto come.

In a bid to boost tourism, historicalmonuments and sites are being restored inJaipur, the picturesque capital city ofRajasthan, and in Ajmer, the former capitalof Rajasthan. But that’s only part of theambitious work plan.

Environmental degradation and lack ofbasic services previously frustrated theviability of tourism and related opportuni-ties to boost local economies.

“The identified monuments and siteswere generally in bad shape and in dire needof repair works,” says Manoj Sharma, ProjectDirector for the Rajasthan Urban Infrastruc-ture Development Project.

To make matters worse, encroachments,solid waste dumping, and poor drainagemarred the surroundings.

The Urban Environmental Improve-ments component of the Rajasthan UrbanInfrastructure Development Project, withloan assistance from the Asian DevelopmentBank (ADB), is developing sites and improv-ing services, including historical sites in sixmajor cities in Rajasthan—Jaipur, Jodphur,Udaipur, Ajmer, Kota, and Bikaner. The to-tal project cost is $362 million, of whichthe ADB loan component is $250 million.

Apart from restoring historical monu-ments and sites, other components includerehabilitating and expanding water sup-ply; improving urban environment throughimproved wastewater management; andupgrading streets, bridges, and bus termi-nals to improve urban transportation.

“The restoration works will not only re-vive the glory of these structures but alsothe improved facilities will help boost tour-

I N D I A

Guarding the PastIn a bid to boost tourism, Rajasthan’s heritage sitesare being restored and public infrastructure built

ism, which will have direct economic ben-efits to the local residents,” Mr. Sharmapoints out.

The Indian National Trust for Art andCultural Heritage’s Jaipur Chapter and thedesign and construction consultants pre-pared detailed plans, drawings, and esti-mates for restoring the identified heritagebuildings and sites. Bylaws were also ex-amined as a basis for proposing necessaryregulatory measures and suitable modifi-cations for preserving the heritage charac-ter of the “walled city of Jaipur,” a uniqueexample of an old planned city.

“The development of historical sites isbeing done comprehensively to promotesustainable growth in tourism,” says AlexJorgensen, ADB Principal Urban Specialist,India Resident Mission.

These monuments and their surround-ings are now being renovated and given afacelift, with project officials taking greatpains to ensure the work is in line with thetraditional architecture of Jaipur, for whichthe project is providing $11 million for heri-tage preservation.

The Chand Pol Gate is one of the his-toric monuments being restored—the firstmajor renovation for the gate and its sur-roundings in 275 years. Conservation worksat the Chand Pol Gate include replasteringand repainting the surfaces, restoring bro-ken parts, paving the gate structure, andproviding ample parking facilities andother public amenities.

“The gates and their envelopes are anintegral part of the overall heritage fabricof the walled city of Jaipur. The need forthe project is inherent in the attempt toestablish a continuum of history to thepresent and the future generations, ” ex-plains Poonam Verma, Conservation Archi-tect for the project.

The renovation works must consider thetraditional materials, design, style, andtechniques and the sensitive addition ofcongruous materials and design to restorethe monument to its former glory. “It is im-

perative that the renovation and conserva-tion approach of the structure and its sur-roundings are carried out with minimaldesign and functional intervention,” ex-plains Ms. Verma.

The project also provides opportunitiesfor students from the local technical insti-tute to work with expert craftspeople.

With the restoration of the monuments,Rajasthan’s rich cultural heritage will bepreserved and local communities will gainin the process.

Om

ana

Nai

r

The Chand Pol Gate is receiving its firstmajor renovation in 275 years

Soon local communities be benefiting from touriopportunities

OPPORTUNITIES Localpeople will soon benefitfrom tourism

18 November–December 2003

I N D I A

By Omana NairExternal Relations Specialist

CHENNAI, TAMIL NADU, INDIA

Hailed as a landmark develop-ment in the maritime map ofIndia, Ennore Port on theCoromandel Coast, 20 kilo-meters (km) north of Chennai

in the state of Tamil Nadu, is the firstcorporatized port in India. Envisaged as asatellite port to decongest and improve theenvironmental quality at the bustlingChennai Port, Ennore Port is evolving itselfinto a full-fledged port with the capacityto handle a wide range of products.

With the commissioning of Ennore Portin 2001, handling thermal coal destined forthe thermal power stations owned by theTamil Nadu Electricity Board (TNEB)was shifted from Chennai Port. The portprovides a cheaper option to transport coalfrom the Talcher coalfields in the state ofOrissa for power generation in Tamil Nadu.Since Ennore Port became operational,TNEB has been saving Indian rupees(Rs)100 (about $2.50) for every ton of coaltransported.

Ennore Port, designed as Asia’s energyport, has only 16 employees. Operating ona landlord port concept, it is outsourcingall services required for operation and main-tenance, and new terminals are being de-veloped with the participation of the private

PROFITABLEPORTSPrivatization is givingthe competitive edgeto Indian ports—andincreasing competitionbetween them

sector. “Today Ennore is a good example ofhow synergy of a clear vision, sophisticatedtechnology, and a well-trained workforce canusher in efficiency and profitability to theport functions,” says T.K. Arun, CompanySecretary, Ennore Port Limited.

World-Class PortThe 12th major port in India, Ennore Porthas adequate road and rail links. It has a560- meter (m) long coal wharf for berthingtwo Panamax size vessels and fully mecha-nized systems for handling 16 million tonsof cargo a year. Designed as a world-classport, with two breakwaters—one in thenorth measuring 3,080 m and the other inthe south measuring 1,070 m—it has thecapacity to develop 22 berths for handlinga variety of bulk, liquid, and container cargo.

The development of Ennore Port waspartly funded through an Asian Develop-ment Bank (ADB) loan of $285 million forthe Coal Ports Project, approved in 1992.Major components undertaken includecapital dredging of the approach channeland harbor basin to handle vessels up to65,000 deadweight ton (dwt), constructionof south and north breakwaters, onshore

civil works and building facilities, procure-ment of a tug and pilot launch, and instal-lation of night navigational aids.

ADB’s objectives for the project in-cluded creating a green field port, under-taking sector reforms particularly to attractprivate sector participation, and providinga cheaper mode of transporting coal and cre-ating spin-off commercial activities in theregion.

Support for private sector developmentis an integral part of ADB’s operational strat-egy in India. The main emphasis has beenon establishing the policy, institutional, andregulatory frameworks for private sectorparticipation in economic development,particularly in the roads and ports, hydro-carbon, and communications sectors and,at the state level, in the power sector.

Private Sector Keen to InvestThe Government of India, on the otherhand, has also initiated various steps toexpand the infrastructure and managementbase of key ports of the country. To encour-age private sector participation in develop-ing ports facilities, policies and procedureshave been significantly liberalized.

19November–December 2003

Between April and September 2003,Ennore Port handled 80 vessels and 4.5 mil-lion tons of coal, says Mr. Arun. “By beingan optimally lean, agile, and highly effi-cient organization, we target to increasethis to 10.3 million tons of coal by 2004.”

He explains that Ennore as a landlordport would mobilize and invest in creatingwaterside facilities, such as deepening theapproach channel and port basin and asso-ciated common user facilities, and performregulatory functions. “All other capital in-vestments will be made through privatecapital.”

“We have been successful in attractingpotential private sector investors who haveshown a keen interest in investing about$190 million in the development of coal,marine liquid, and iron ore terminals thatwould increase the handling capacity of theport to 40 million tons of bulk cargo perannum by 2006–2007 and trigger substan-

Ennore Port, designed as Asia’senergy port, has only 16 employees

The port has the potential to become amajor gateway for car exports and is in aposition to handle large vessels and vol-umes, says S. Veeramuthumoni, Ennore PortDirector of Operations.

As a result, the transfer of coal to Ennorehas made Chennai Port clean. “ChennaiPort, which holds 33% stake in the EnnorePort development, now has the additionalspace for handling other lucrative containercargo and increasing its capacity for theexport of cars,” said V. Chellappan, ChiefEngineer, Chennai Port Trust.

While it was not clear whether the Ko-rean car manufacturer plans to continue carexports through Chennai or make EnnorePort the lone gateway, the proposal comesat a time when Chennai Port is upgradingits facilities.

Chellappan added that a series of planshas already been set in motion to make upfor the revenue losses at Chennai Port. With-out ruling out the possibility of the portoffering fiscal incentives to retain the ac-count of the Korean car manufacturer, hesaid, “we are expanding the parking lot toaccommodate at least 25,000 cars and con-cretizing the surface at a cost of around$670,000 to reduce pollution and dust. Healso pointed out that a team fromGermany’s Volkswagen had recently visitedthe port’s facilities.

Other measures include involvement ofthe private sector, provision of deeperberths, and containerization that wouldenable the port to attract bigger ships. Theport had already succeeded in finding somealternative cargo to coal. With the numberof car manufacturing companies locatedaround Chennai, Chellapan was confidentthat potential exists to increase large-scalecar exports through car carrier shipmentsfor Chennai.

Chennai is India’s major port for tradewith Southeast Asia. Its hinterland coversthe states of Tamil Nadu, Andhra Pradesh,and Karnataka. The region has importantindustries and major exports includingminerals such as iron ore and barites. ADBhas provided assistance to Chennai Portfor its expansion and modernization planto increase cargo handling capacity ofcontainers and other general cargoes. Fur-ther, the project also involved private sec-tor participation in providing containerhandling equipment and operating con-tainer terminal.

tial commercial activities in the region,”Arun adds.

Thinking BigThe mechanized coal handling system andthe dust suppression measures, includingwater sprinklers, covered conveyor gallery,and a dust extraction system at the coaljetty are ensuring that Ennore Port is oper-ating with minimal disruption to the envi-ronment.

“As an environment-conscious corpora-tion, a 15-hectare (ha) area has already beenforested and another 50 ha is being planned.The Port is also employing more than100 local women who have been engagedunder the ‘green-field port’ project,” saysMr. Arun.

The overall plans are big: officials wantto commission by 2006 a coal berth tohandle 8 million tons per annum (MTPA)of cargo, an iron ore berth to handle 12 MTPAof cargo in 200,000 dwt ships, and a multi-purpose berth to handle liquid cargo. “Withthese developments, Ennore Port is poisedto be transformed from a coal port to a vi-brant energy port that would meet the chal-lenging needs of the growing economy,” saysAlbab Akanda, Head, Infrastructure and Envi-ronment Unit, ADB India Resident Mission.

The port’s e-business initiatives coveran extensive range of customer accountmanagement services, such as electronicinvoices, statements, and bill payments.“Ennore Port’s long-term vision is to pro-mote excellence in marine services throughfocus on customer, technology-driven, value-added services, and concern for safety andenvironment,” says Mr. Arun.

Focus on AutosEnnore is also vying to attract foreignautomobile makers, which currently use theChennai Port, to explore the possibility ofexporting its cars through Ennore Port, amove that may trigger competition be-tween the two facilities. The proposal, stillin preliminary stages, was driven by theability of Ennore Port to offer vast tracts forthe manufacturer to park its export-oriented cars.

FUTURE The 12th major portin India, Ennore Port hasmany features that make itenvironment-friendly

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M E K O N G S U B R E G I O N

By Tsukasa MaekawaPrincipal External Relations Specialist

DALI, PEOPLE’S REPUBLIC OF CHINA

To maximize the benefits of regionalintegration and globalization, min-isters of the six Greater MekongSubregion (GMS) countries vowed

in mid-September to strive harder tostrengthen competitiveness and connectiv-ity, and enhance their sense of community.

In a drive to attract private sector par-ticipation in the GMS Economic Coopera-tion Program (GMS Program), the ministersheld their first meeting with representa-tives from the private sector at the 12th

GMS Ministerial Conference.“The ministers recognized that closer

collaboration will be crucial to meet the

Ministers Vow to SpeedUp Priority ProjectsMekong River countries vow to increase competi-tiveness, connectivity, and sense of community

challenges and reap the benefits of increas-ing regional integration and globalization,”said the Joint Ministerial Statement.

The meeting underscored the impor-tance of speeding up priority GMS projects,including transborder road efforts.

The countries—Cambodia, People’sRepublic of China (PRC—Yunnan Prov-ince), Lao People’s Democratic Republic(Lao PDR), Myanmar, Thailand, and VietNam—are already reinforcing links throughroads, telecommunications networks, andthe promotion of power trade.

The GMS Program, assisted by theAsian Development Bank (ADB) since itsinception in 1992, aims to create a betterintegrated, more prosperous, and equitableregion. ADB and its partners have financed15 major infrastructure projects, represent-ing investments totaling over $2 billion.

All mainland Southeast Asian countrieswill be landlinked by 2007 when all subre-gional infrastructure initiatives in theMekong countries are expected to be com-pleted.

ADB Vice-President (Operations 1)Liqun Jin told the meeting: “The GMSshould be prepared to eventually form afully integrated market as it emerges inAsia and integrates itself into the globaldevelopment process. So long as we workdiligently to achieve connectivity and com-petitiveness, the region will be very well-placed to play its part in an economiccommunity under a broader framework.”

A major step toward further opening upthe borders in the GMS was taken asMyanmar joined the other five countries inreducing nonphysical barriers to the freemovement of people and goods across in-ternational borders. At the end of the meet-ing, Myanmar signed the Cross-BorderTransport Agreement. Now all six countrieshave signed the Agreement.

The ministers noted that developingincreased competitiveness requires theGMS to focus on an improved infrastruc-ture network, human resource development,and trade facilitation alongside good gov-ernance and environmental management.

The ministers welcomed the commence-ment of the Phnom Penh Plan for Develop-ment Management. They saw it as crucialfor building high-quality capacity in theGMS.

Other major outcomes of the meetingare as follows.• The ministers agreed that the GMS

Program is well on its way to achievingphysical connectivity through a networkof road corridors and agreed to exploreother air and water transport linkages.

• They acknowledged the important roleof cooperation in agriculture in reduc-ing poverty through partnerships withrural communities to promote agricul-ture trade, food security, and sustain-able livelihoods.

• They reaffirmed the importance of pro-moting the subregion as a single touristdestination and to work toward the pos-sible establishment of a “GMS visa.”

• They warmly welcomed the Lao PDR’soffer to host the 13th GMS ministerialmeeting in 2004 and to the PRC’s offerto host the second GMS Summit ofLeaders of Governments in 2005.

The GMS should be prepared to eventually form afully integrated market as it emerges in Asia and inte-grates itself into the global development process“ “

Liqun JinVice-President (Operations 1)

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21November–December 2003

M E K O N G S U B R E G I O N

By Tsukasa MaekawaPrincipal External Relations Specialist

Encouraged by the Greater MekongSubregion (GMS) Economic Co-operation Program’s efforts tobuild cross-country road networks,

Yunnan Province of the People’s Republicof China (PRC) is making steady efforts tobecome the country’s gateway to Southeastand East Asia.

ADB-assisted GMS road projects inYunnan are helping the province build all-weather highways from its capital ofKunming to Viet Nam, Lao People’s Demo-cratic Republic (Lao PDR), and Myanmar.Most roads have either been completed orare being constructed. The connectingroads in Lao PDR and Myanmar are linkedto northern Thailand.

With the PRC and the Association ofSoutheast Asian Nations (ASEAN) coun-tries having forged a free trade agreement,Yunnan Province officials say that the trans-port links will help boost trade with thecountries in the south as well as tradebetween other parts of the PRC and neigh-boring countries.

“In addition to the countries borderingwith us, we regard Singapore and Thailandas very important trading partners,”says He Xuan, Deputy Director of theYunnan Provincial Economic ResearchCenter. With the completion of theNorth-South Transport Corridor—aroad link being promoted through the GMSProgram—it will be possible to travel byroad the 2,000 kilometers betweenKunming and Bangkok in just 20 hours.

Promoting Economic Growth,EntrepreneurshipSpurred by already completed highways andprospects of better transport links, theYunnan economy has grown steadily, post-ing an average growth rate of about 8% overthe past decade.

Yunnan’s overall trade has grown by an

Trade Links GrowingWith the PRC and ASEAN countries having forged afree trade agreement, Yunnan Province is positioningitself to be in the center of the action

annual average of 10.3% since the GMS Pro-gram was initiated in 1992. In the first sevenmonths of 2003, trade with Myanmar rose30% from a year earlier, while trade withthe Lao PDR increased by 19% and thatwith Viet Nam by 34%. Observers say mas-sive amounts of goods are being transportedvia Myanmar between Thailand andYunnan Province.

Roads have also helped local economies.“A highway that passes through our countyhas played a very important role in promot-ing economic development and reducingpoverty,” says Zhi Hong, Deputy Governorof Nanhua County. The shortened traveltime between the county and Kunming—from 6 hours down to 2 hours—has madeshipping fresh products possible. One re-sult is that the market value of mushroomshas increased, with fresh mushrooms nowbeing exported to other Asian countries,such as Japan.

Promoting Tourism, ExpandingTransport ChannelsWith the roads in place, Yunnan plans topromote tourism. The province is wellknown for its scenic beauty, with someattractions listed among the World’s Cul-tural and Natural Heritage sites, such asLijiang, a town famous for its historicbuildings.

Luo Mingyi, Director General of YunnanProvincial Tourism Bureau, says the prov-ince expects more tourists from South-east and East Asian countries. Currently,35% of overseas tourists to the provinceare Asians, mainly from Hong Kong,China; Japan; Republic of Korea; andTaipei,China. The rest are from countriesoutside Asia.

To attract more international and do-mestic tourists and expand trade, Yunnanplans to improve and open railway lines,airways, and waterways. For instance, therailway from Kunming to Viet Nam willbe upgraded in five years to accommodateannual cargo transport of 10 million tons(two ways) against the current 1 milliontons. Farm produce, electronic appli-ances, and minerals are expected to bethe main cargoes. Waterway developmentis currently being negotiated with VietNam.

To attract more tourists and expand trade, Yunnan plans toimprove and open railway lines, airways, and waterways

BOOMING PROVINCE Withroads in place, Yunnan nowplans to promote tourism toplaces such as Dali

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By Arthur M. MitchellGeneral Counsel

Corporate governance is at a cross-roads. Many developing andemerging economies already re-cognize that good corporate gov-

ernance is crucial for sustainable economicdevelopment. And many are searching for anew or “right” model to apply to their spe-cific domestic environment.

Over the past decade, focus has beenincreasing from outside—whether fromgovernments, foreign investors, or multilat-eral development institutions like theAsian Development Bank (ADB)—on is-sues related to increased accountability,transparency, and disclosure in corporategovernance systems.

Coupled with appropriate manage-ment incentives to ensure the disciplinerequired for compliance, a balanced cor-porate governance system can help dis-tribute wealth to a broader segment ofcivil society.

While good corporate governance is criti-cal, it is important to realize that it goeshand in hand with public governance re-form. Only an integrated approach willensure a balanced contribution to develop-ment. After all, it is not possible to createand run an island of good corporate gover-nance in a sea of poor or underdevelopedpublic governance.

What influences Asia’s business struc-tures? Social and cultural heritage, throughreligion and philosophy, stresses loyalty tofamily. But contemporary Asian legal sys-tems also have roots in western civil andcommon law legal traditions.

Despite this diversity, however, there aresimilar challenges. If there is a commondenominator, it is the shift away from state-owned enterprises and the monopolies offamily-controlled conglomerates to widerownership; more balanced control; moreindependent board members; and deeper,

Corporate Governanceand Poverty ReductionSeeking the “right” model for balanced growth posesa challenge to Asian countries

more liquid, domestic capital markets.Reformers currently face much resis-

tance, mostly in convincing traditionalbusinesses that it is ultimately in their bestinterests to adopt reforms.

The reason for the resistance is simple.Both major developed nation models—the“bank-centric” system (like those in Ger-many and Japan) and the “market-centric”system (as in the United Kingdom and theUnited States)—have shown their weak-nesses of late. Relationship capitalism inJapan led to a slew of nonperforming loansand a no-growth de-cade, while the Enronand Worldcom scan-dals called the USmodel into question.

Legal culture has ahuge impact on what isultimately appropriatefor a country. And inbuilding the “right”model for corporate gov-ernance, perhaps it isbetter to study what notto learn from both bank-centric and market-centric systems.

The key is to en-sure that corporate gov-ernance reforms in emerging economies donot dampen entrepreneurship, but ratherenhance economic development in a moretransparent and accountable fashion.

So instead of replicating the financialsystems that more prosperous countriesdeveloped over many years, Asian countriesshould focus on several issues.• While strengthening legal frameworks

and institutions, Asian governmentsmust enforce laws equitably, resolvingthe rule of law deficit (or implementa-tion gap) and build accountable publicgovernance—the precursor to a prop-erly functioning corporate governanceregime.

• Bank-centric systems must be reformedto clean up bad debts and nonperform-ing loans and implement cutting-edgerisk management techniques.

• Systemic risks (like the 1997 financialcrisis) can be reduced if regulators andinvestors diversify risks by promotingrobust local currency corporate bondmarkets, among other things, as an al-ternative to bank financing.The need remains to convince govern-

ments, dominant corporate families, andthe traditional “old-boy” domestic busi-ness networks that reform must be real andnot merely legal lip service to outside pres-sure or expectations.

They need to be convinced that goodcorporate governance is truly in their bestinterests. Good corporate governance ex-pands potential markets, broadens owner-ship, creates alternate financing options,and—most importantly—will help reducepoverty.

It is not possibleto create and runan island of goodcorporate governancein a sea of poor orunderdeveloped pub-lic governance

“L A W M A T T E R S

GOOD FOR ALL Good corporategovernance expands potentialmarkets, broadens ownership,and helps reduce poverty

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23November–December 2003

D I S C L O S U R E R E V I E W

Auditor General Meetswith US NGOs onAnticorruption EffortsADB Auditor General Peter E. Pedersenmet with 12 representatives of US-basedNGOs and consultancies to discussADB’s Anticorruption Policy. Participantsincluded staff of the Bank InformationCenter, Forest Trends, and GovernmentAccountability Project. The Office of theGeneral Auditor works to ensure thatADB projects and staff adhere to thehighest financial and ethical standards.For more information, contact MichaelStevens at [email protected].

ADB Supports Activitiesof NGOs in IndiaAs part of an ongoing review of its Pov-erty Reduction Strategy, ADB consultedwith stakeholders at its India ResidentMission in late July. Representatives ofNGOs and international developmentagencies remarked that ADB operationshave become more pro-poor sinceimplementation of the Strategy beganin 1999. An example of this trend is thetechnical assistance for Integrating Pov-erty Reduction in Programs and Projects,under which ADB has been financingsmall-scale grants to NGOs to provide,for example, AIDS counseling, introduceorganic farming, and empower women.For more information, contact SujathaViswanathan at [email protected].

Punjab: Toward Millen-nium Development GoalsADB approved a $300,000 technical as-sistance grant to assist the Governmentof Punjab in improving and expandingsocial services for the poor. The focus ofthe technical assistance will be on rela-tively low-cost services that are easy toadminister and will benefit those inpoverty. “Priorities will mirror the Mil-lennium Development Goals,” saidMarshuk Ali Shah, Country Director, ADB’sPakistan Resident Mission. For more infor-mation, contact Vincent De Wit [email protected].

N E W S F O R N G O S

By Bart W. ÉdesExternal Relations Specialist

T he Asian Development Bank(ADB) shares information aboutproposed projects with interestedstakeholders to encourage local

participation in decision making and pro-mote dialogue on poverty reduction. Expe-rience has shown that such informationsharing strengthens community engage-ment, as well as project implementationand sustainability.

Since the Policy on Confidentiality andDisclosure of Information (DisclosurePolicy) was approved in 1994, it has pro-vided for the proactive dissemination of asubstantial amount of documentation onoperational issues.

The Disclosure Policy is reinforced bythe complementary Information Policyand Strategy of ADB (Information Policy),which supports an open and accessible en-vironment in a multilateral developmentfinance institution.

The Information Policy directs ADB toimprove understanding among the publicand policymakers of its activities, strate-gies, and objectives; marshal support forits activities; and raise public awarenessof development issues.

Stakeholders Contributeto New PolicyIn August 2003, ADB began solicitingstakeholder comments on both policies aspart of a comprehensive review leading tothe adoption of a new, unified policy oninformation issues.

ADB has made detailed informationabout the review available on its Internetsite, where visitors are invited to share theiropinions (http://www.adb.org/disclosure).

Stakeholders Engagedon Information Policies

More than 2,800 journalists and repre-sentatives of government, private sector,professional associations, universities,foundations, community groups, labor net-works, and nongovernment organizations(NGOs) with an interest in developmentwere directly advised by ADB of the 90-day comment period. ADB received over70 sets of comments during this time. Seehttp://www.adb.org/disclosure/external fora compilation of the comments received.

Also during this period, ADB Manage-ment, Board of Directors, and more than100 staff members provided feedback oncurrent practice and gave their views on howADB should amend its current policies.

External ConsultationsThe period for public comment ended inmid-November, and a new policy is nowbeing drafted. ADB will make the draftavailable for public comment, and use itas the basis for discussions with stakehold-ers in early 2004. The views of governmentofficials, business people, researchers, pastrequesters of information from ADB, andNGO representatives will be activelysought on the draft.

Workshops will be held in both deve-loped and developing member countries.A tentative workshop schedule has beenposted on ADB’s web site.

Issues raised and recommendationsmade at the workshops will be consideredin drafting a revised working paper, whichwill be submitted to ADB’s Board ofDirectors for consideration.

For more information about the reviewprocess, contact the Office of External Rela-tions at (632) 632-5843, or by e-mail:[email protected]; or go to http://www.adb.org/disclosure.

A new draft policy will be posted on ADB’s web siteand used as the basis for stakeholder discussions atworkshops in early 2004

24 November–December 2003

To read ADB Review online, go tohttp://www.adb.org/review

For information, send an e-mailto [email protected] or go tohttp://www.adb.org

To explore business opportunitieswith ADB, go to http://www.adb.org/business/opportunities

For publications, go to http://www.adb.org/publications

For the latest news, go tohttp://www.adb.org/media

Publisher: Robert SalamonEditor and Layout Artist: Carolyn DedolphAssistant Editors: Marcia R. Samson, Chona MurakamiDesigner: Ram CabreraGraphic Assistant: Keech HidalgoPhoto Researcher: Tess PerezAdvisors: Ann Quon, Ian GillDistribution: ADB Publications UnitFulfillment: ADB Printing Unit

ADB Review reports on development news from Asia and the Pacific and on the activitiesof the Asian Development Bank, which publishes the magazine six times a year. Opinionsand materials in ADB Review do not necessarily reflect the official views of ADB. Materials

may be reprinted with credit given to ADB Review. Comments may besent by e-mail to [email protected]. For a free subscription, contactADB Review, Office of External Relations, Asian Development Bank,P.O. Box 789, 0980 Manila, Philippines; or send an e-mail [email protected] or fax a message to (632) 636-2648.

ADB ONLINEhttp://www.adb.org

WHAT’S HER FUTURE?—For this schoolgirl in India, that’s a good question. The challenges of reducingpoverty while maintaining macroeconomic stability require countries in the region to strike a carefulbalance between policy choices and emphasis on growth, equality, and stability (see story, p. 3).

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ISSN: 0118-8674