A project such as this one can be successful in easing the constraints to local currency cash loans, loan terms, and the capacity of participating commercial banks for MSE lending. However, it cannot address other constraints identified at appraisal such as restrictions on dollar-denominated cash loans, and those encountered during implementation, such as restrictions on microcredit organizations and cash balances of banks. Incremental measures aimed at easing constraints and eventually dismantling credit market distortions need to be included in the project design.
In addition, to achieve good project performance, the project design needs to include continuous policy dialogue and knowledge sharing of international best practices.
ADB should have taken a more cautious stance in the selection of PCBs, especially when Agrobank had earlier failed to meet the covenant on return on assets.
The PPMF was a useful input to the design of the ADB policy-based loan supporting the Financial Market Development and Integration Program in 2012. It is also a good practice for ADB to support a post-monitoring program with technical assistance. However, the PPMF should monitor not only actions and outputs but also outcomes.
The $1.5 million TA project was aimed at supporting the continuation of the reforms beyond the CMDPC, including the policy measures in the post-program monitoring framework. The other TA project amounting to $1.2 million TA project, with limited components, supported the implementation of a $600 million loan program with 93 policy actions to be completed by several government agencies. It is unclear whether additional budgetary resources were provided for program implementation; future programs may want to ensure appropriate resources for implementation.
The CMDPC supported a complex program with 93 policy actions (46 for subprogram 1 and 47 for subprogram 2). Limiting the number of policy actions in a program is consistent with the IED recommendations in the evaluation of ADB assistance to capital market development in 2008.
A longer term and flexible framework for reforms, supported by a timely monitoring and evaluation system, would provide a context for the phasing of reforms and identifying the content of specific programs which typically cover 3–5 year periods.
The stakeholders met by the evaluation mission indicated that before the 2008 conflict Georgia’s economy was relatively well-managed by the government. The government had a good track record with development partners and this was instrumental in securing substantial support after the twin crises. Development partners interviewed during the evaluation mission noted that negotiations with government for the post-crisis support went smoothly, despite the fact that the government had to deal with multi-donor support delivered through numerous support modalities and channeled through many stand-alone assistance schemes with varying timelines, execution structures and delivery methods. For ADB’s GRSP, the reforms and policy actions stipulated under the loan (and in the JNA) were complied with by the government, more quickly than expected.
The 2008 conflict caused the development partners to engage collectively with the government in designing the crisis response and policy discussions. The NBG said this collective engagement encouraged the government to discuss the crisis response measures and policy actions seriously. As this was an emergency situation, the discussions, negotiations, approvals, and transfers happened quickly. The World Bank and the United Nations Development Programme took the lead in convening the development partners and ADB actively participated, although it did not play a lead role. The collective effort from the development partners helped to alleviate the financial crisis, limited economic contraction, and addressed constraints arising from infrastructure damage, investment climate deterioration, financial difficulties, and worsening social conditions of IDPs.
However, the regional TA was not implemented and the envisaged fiduciary arrangements were no longer monitored under the GRSP. Nevertheless, other development partners have taken related initiatives. The World Bank, Department for International Development of the United Kingdom, Government of the Netherlands, and the Swedish International Development Cooperation Agency provided $15.00 million for public sector financial management reform, the United States Agency for International Development provided $3.29 million to support foreign reserves and payment systems, and the European Union provided €11 million to support a second phase of public financial management reform. The completion report for the World Bank project noted that the MOF had strengthened its strategy and annual budget planning processes and improved arrangements for monitoring and oversight of budget implementation through capacity building provided by the project. Capacity and procedures for strategic expenditure planning, budget preparation, and budget management were also strengthened in line ministries. An internal budget policy and public expenditure review process was introduced and capacity building and training strategy for staff in the MOF Budget Department and line ministry budget units were developed and implemented. The World Bank project also supported an external audit of central government spending. This suggests that the coordination among the development partners under the JNA framework worked well for Georgia.
For the envisaged impact to be fully achieved, the government should be encouraged to engage with ADB and other development partners. The IDP housing that the evaluation team visited was intact and in good condition, based on a cursory inspection. Schools, banks, and stores, among other support facilities, have since been established and appear to be functioning well. A more in-depth assessment of the resettlement sites would help to determine the overall success of the resettlement program. It would also confirm the status of the safeguard issues that were not previously considered under the program. A comprehensive analysis of development constraints should also be undertaken to identify binding constraints on economic growth that the government and ADB can focus on, given the active presence of other development partners in the country. This could provide a sound basis for a more strategic support framework moving forward.
The absence of consultants to address issues regarding the legal and technical aspects of O&M planning and funding, measures for cost recovery, tariff collection, and the metering system posed a risk to the sustainability of the water supply and sanitation subprojects. Future projects should include technical assistance that would implemented concurrently with the project. This technical assistance would review the tariff, assess its adequacy to generate sufficient revenue to sustain water supply systems, and evaluate the status of metering consumers. In line with this recommendation, ADB is currently supporting UWSCG’s ongoing review of its water tariff policy under a subsequent TA and loan.
The projects were designed as financial intermediation loans largely because the government wanted to disburse funds and execute subprojects quickly. MDF had the capacity and had prior experience of implementing such loans through an earlier World Bank project. However, MDF operated like a regular executing agency rather than as a financial intermediary institution, whose role is limited to transferring or on-lending funds to municipal governments; assessing the financial soundness of the investment; and determining whether the borrowing entity has the technical, safeguard, and financial capacity to implement the project. ADB argued that because MDF was not a commercial financial institution and the borrowers were not commercial entities, it should not be subject to the same assessment criteria as a financial intermediary. This evaluation disagrees with the view. MDF’s status as a government special purpose vehicle should not exempt it from the requirement to build up capacity to mobilize domestic resources and become a true revolving fund. ADB’s approval of the government’s request to make the subproject allocations mainly grant-based, even for more affluent municipalities, prevented MDF from creating a revolving fund, hence it was not consistent with the expectation that MDF would improve its financial capacity. The RRP for the first project contained several statements to indicate this was an ambition, though perhaps not a central objective. Moreover, almost all the funding from MSDP Phase 2 was for secondary and tertiary roads which do not generate revenue. For any future urban projects using financial intermediation loans, institutional and capacity development, particularly with a view to transforming MDF into a sustainable financial institution, should be key objectives.
The evaluation mission’s difficulty in measuring the efficiency of water supply and road subprojects financed under MSDP and MSDP Phase 2 was the result of an inadequate PPMS that focused mainly on monitoring disbursements and outputs. Baseline data were not collected on the market served by water supply subprojects, such as the number of households, persons per household, water sources, amounts of water produced and consumed, and water loss rates. Nor were baseline data collected that would have enabled the efficiency of road subprojects to be calculated. These data were not collected when the subprojects were completed or for several years after completion for evaluation purposes. Water supply and road projects are similar in nature and ADB should develop a computerized template PPMS that records baseline data on implementation. This would provide the information needed to measure impacts and the efficiency of projects after project implementation. The template PPMS should be part of the project RRP and the loan agreement, modified as needed in consultation with the Independent Evaluation Department and the Economic Research and Regional Cooperation Department.
Discussions and interviews with MDF staff and municipal governments during the evaluation mission pointed to the need for further capacity building of MDF and municipal governments. This was one of the objectives of the projects. The projects should not have reallocated funds from the capacity development and training cost category to civil works even if other donors were providing similar assistance; ADB and other development partners could have coordinated closely to ensure that their training programs were complementary and did not duplicate each other. ADB could have used the funds to train local government staff, in addition to technical staff, consultants, and contractors on procurement processes, new road building techniques, and supervision. Arrangements to retain trained staff at least for the project duration (including incentives), could be included in future projects, ADB should continue investing in capacity building for local human resources (consultants, contractors, technical staff) to help ensure that central and local governments will have the skills to maintain the outputs after the project ends.
Based on the experiences and achievements of COREMAP, it is essential that every level of government—national, provincial, and district—strongly commits to implementing marine conservation programs and activities. Under Law No. 23, strong capacity to address illegal fishing is required at the provincial level. To make this happen, provinces need to work closely with districts to develop and internalize the capacity to manage costal resources. Also, solid functional linkage systems for CRMP implementation should be established between provincial and district governments. A budget for institutional framework should be secured to build provincial governments’ extended offices or technical implementing units at district level. NGOs and extension workers that have worked with fishing villages can play a complementary role in bridging provincial and district governments. They also need to be strongly supported.
Conservation and management are both focused on improving coastal livelihoods. Comprehensive ecosystem management is essential for communities’ ongoing engagement in conservation activities. Given the importance of mangroves, more stress should be placed on mangrove conservation nationwide. Strong legislation should be developed to ban the conversion of mangrove areas for shrimp and fish farming and prohibit illegal and destructive fishing. Mechanisms to counter coral bleaching also need to be developed, e.g., reseeding and introducing bleaching resistant strains. To this end, interaction between the government, research institutions including LIPI, and international agencies such as Australia’s Great Barrier Reef Marine Park Authority should be developed.
Several months after the NGOs left, district governments (Bintan, Natuna) assigned extension workers, but the NGOs’ engagement period was too short to ensure that the community groups were adequately operational and functional. In most villages, NGO staff were not absorbed into extension worker positions. It would have saved time and resources if functional links between NGOs and extension workers had been developed during the project, or at least, if NGO staff had been assigned as supervisors. NGOs and fishery extension workers engaged under the project could have been assigned to continue extension service functions after the project.
Another impact of discontinuity under the project was poor asset management of social infrastructure. The MMAF did not hand over the constructed assets to the district or village at project completion. It is necessary that all infrastructure built under a project is handed over formally to appropriate institutions before the project ends. In COREMAP II’s case, this would have facilitated their appropriate management and sustainable utilization by communities and contributed to the sustainability of project benefits.
With the support of the government and ADB, future conservation programs and projects will need to develop improved implementation systems and provide more practical support for beneficiaries. As mentioned, fishers’ behavioural practices need to be taken into consideration in project design and support for group livelihood activities. Furthermore, technical support for livelihood activities is usually required for a minimum of 2 years. Drawing on the lessons related to marketing and prospective linkage with value-chains, it would be effective for projects to involve private businesses from district capitals or to provide support to local enterprises, both in aquaculture and fish processing. A needs assessment of the private sector and potential business enterprises should also be conducted.
The NRSLLDP, through the VIF, supported CDD-related infrastructure (such as village meeting halls) at the provincial, district, and local levels. Livestock development and commercialization endeavors, on the other hand, will require new infrastructure to address impediments such as access to water, animal shelters, medicinal supplies, cold-chain, access roads, and market infrastructure.
The NRSLLDP aimed to provide farmers with animals to be integrated into their semi-subsistence livelihoods. These additional animals were stores of wealth that were sold occasionally to smooth consumption (e.g., school fees) or support other investments (e.g., motorbikes). With a commercialized approach, the focus is on maximizing a stream of income over a sustained period. This will require substantial changes in the production, marketing, selling, and reinvesting cycle. Compared with the NRSLLDP, this will require much more intense and regular training.
Unfortunately, the NRSLLDP was rather short-sighted and did not seek to develop groups to access or provide benefits to farmers throughout the production chain (from inputs, to husbandry, to selling). The project also dropped the access-to-market component. As such, it will be left to the follow-on project to fill some of these gaps by engaging with stakeholders such as government extension workers, research centers, veterinarians, market centers, and the private sector.
A key decision for IFAD, ADB, and the government will be to agree on a partner—for example, the Bank of Laos—to implement the rural finance component of the NSLCP transparently and professionally.
Ingress and egress to the port area are critical to the efficiency of transport infrastructure and services. Most of the major ports in Asian countries are located in major urban centers, which initially did not pose any problem since cargo volumes were still small. As cargo volumes have increased because of economic and population growth, port areas have expanded while local transport networks have failed to keep pace. There is a need to fully utilize existing and potential intermodal connectivity to serve existing and future cargo growth. The growth of roads, rail, and water transport should coincide with the growth in cargo traffic, with each mode providing its share of transport capacity.