Fragility and Vulnerability in Asia and the Pacific: Your Questions Answered

Samuel Tumiwa, ADB's Director, Fragility and Engagement, discusses fragility and vulnerability challenges in FCAS and SIDS countries and how ADB is helping through financing and knowledge sharing.

How has digital connectivity boosted growth in isolated island economies in the Pacific?

Digital connectivity infrastructure in the Pacific has helped to considerably lower internet costs and broadened access for huge swathes of the population. The improved bandwidth has led to more efficient government services, and an expansion in the private sector. Education and health services have also benefitted from the expansion of broadband across the Pacific. Reliable internet means new businesses, particularly in technology and fintech, can grow. The result is a major boost to economic and social development in the Pacific.

How is ADB encouraging the private sector to invest in vulnerable and isolated countries in the region, surely the risk is too great?

ADB is well placed to match investors with appropriate projects in Pacific countries. ADB can offer "credit enhancements" products when lending to private sector investors to mitigate risk. An example is the Pacific Renewable Energy Program (PREP). Smaller island states and fragile countries often cannot guarantee power utility payments. This can discourage private investment in the sector.

The PREP offers credit for up to 21 months if the power utility is unable to pay invoices. This allows time to address issues while power delivery continues. The PREP encourages investors to develop renewable energy projects in Pacific countries without having to rely on government guarantees.

Give an example of how knowledge sharing has contributed to development and/or economic growth in ADB Small Island Developing States (SIDS).

The Pacific Economic Monitor (PEM) contributes to economic growth and development by providing a platform for knowledge sharing. This includes macroeconomic outlooks and critical policy issues, along with responses and reforms. During severe shocks such as the 2008-2009 global financial crisis and the COVID-19 pandemic, the PEM supports policymakers to help them mitigate the socioeconomic impacts.

The PEM helps Pacific countries tackle long-term issues such as climate change, disaster risk management, social protection, employment creation, and connectivity. The result is DMCs with more focused long-term strategies for inclusive and sustainable growth.

ADB’s Multi-Hazard Disaster Risk Assessment (MHDRA) also helps contribute to positive regional development outcomes. Data sharing through the MHDRA helped Tonga assess damage and recover more quickly from the volcanic eruption in January 2022. Data from the MHDRA has helped ADB conduct project climate risk and vulnerability assessments.

Political instability is at the root of problems in many conflict-afflicted countries, ADB is avowedly apolitical, so how does the bank address this real challenge?

Although ADB does not involve itself in politics of its DMCs, it does have a deep understanding of the political context in which it operates. This knowledge, the fruits of decades of engagement, helps ADB focuses its projects, resources, and strategies. This approach helps the bank tailor its development solutions to the specific contexts in which it operates.

Successful country or sub-regional strategies take into account specific political considerations along with the ethnic, social, economic, and environmental context. Including such considerations into programing, project design, and implementation leads to more successful ADB projects in FCAS and SIDS.

How did the poorest and most vulnerable countries in the region cope with the recent COVID-19 pandemic and did ADB target specific support towards those countries?

Many of the poorest and most vulnerable countries in the region have only limited capacity to manage shocks from economic and geo-political events, natural hazards, and climate change. Some also have to contend with geographic isolation and conflict. So they are not in a strong position to handle a global pandemic that even wealthy countries found hugely demanding.

Throughout the COVID-19 pandemic, ADB achieved an outsized per capita impact for every dollar lent to the countries that needed it the most. The Asian Development Fund 13 continues to be a major fund source for these countries. The bank’s Pacific Disaster Resilience Program and the COVID-19 Response for Affected Poor and Vulnerable Groups Project offered significant help to its small island DMCs. This was done by funding development activities, strengthening essential services, and rebuilding communities through rapid disbursement of financing.

How does ADB work in fragile countries like Afghanistan where development work has ground to a halt and there’s no internationally recognized government?

ADB put its assistance to Afghanistan on hold in August 2021. ADB is withholding disbursements and activities in the country until the status of the de-facto government is clarified and/or ADB makes a decision on the relationship with the de-facto government. The cooling-off period ends if and/or when the bank decides on its relationship with the de-facto government, resumes existing operations, and initiates new operations.

Taking into account the intensity of the humanitarian crisis, ADB approved four grants totaling $405 million in January 2022 for the Sustaining Essential Services Delivery Project (Support for Afghan People). The grant covers food security enhancement, core public health services, and sustaining access to education.

The grants are funded from ADB’s Asian Development Fund 13 resources. The project is being implemented by four United Nations agencies. There has been no engagement with the Taliban regime in the approval and implementation of these grants.

Due to the acute humanitarian needs and the country’s ongoing international isolation, ADB should continue supporting Afghanistan in food security, education, health, community resilience, and livelihoods. ADB support for health and education is creating synergies with World Bank and other donor partner support.

Give an example of an ADB project that has made a significant difference to lives in one of the bank’s fragile or vulnerable member countries.

ADB is helping Papua New Guinea (PNG) achieve universal health coverage through its Rural Primary Health Services Delivery Project. The project has established 34 rural health facilities, three urban health clinics and one district hospital. In addition to delivering the health infrastructure, the project has trained health workers across the country on essential and emergency obstetrics care.

The project will strengthen rural health systems and builds on the bank’s experience in strengthening health service delivery in rural areas of PNG. To date, over 7,200 births have been registered at health facilities delivered under the project, in addition to offering antenatal and postnatal health services to women.