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Asian Development Bank Unveils Risk Management Plan to Boost Economic Sustainability

Manila, Philippines - March 2023

The Asian Development Bank (ADB) has announced a comprehensive risk management plan aimed at ensuring the sustainability of its projects and operations in the region.

Identifying Risks

Several risks have been identified that could undermine the effectiveness of ADB’s development initiatives. These include:

  • Weak budget forecasting
  • Inadequate public financial management capacity
  • Lack of internal auditing mechanisms

To address these concerns, ADB has outlined a series of measures aimed at strengthening its risk management framework.

Measures to Enhance Risk Management

The plan includes the following measures:

  • Building the capacity of line ministries for sector- and project-level budgeting
  • Enhancing public financial management systems
  • Creating ring-fenced operation and maintenance (O&M) budgets

Additionally, ADB will enhance its procurement practices by developing a road map to support the National Procurement Commission (NPC), which includes:

  • Defining the role of the NPC
  • Staff development
  • Introduction of standard bidding documents

Improving Transparency and Accountability

The plan aims to improve transparency and accountability in ADB-funded projects by establishing financial management units within each project management unit or project implementation unit. These units will be responsible for:

  • Preparing comprehensive project financial management manuals
  • Submitting timely financial reports

ADB’s risk management plan also addresses corruption concerns by introducing an independent complaints review mechanism and increasing its oversight of procurement and financial control.

Commitment to Sustainability

“We are committed to ensuring the sustainability of our projects and operations in the region,” said ADB President Takehiko Nakao. “Our risk management plan is designed to mitigate potential risks and enhance transparency, accountability, and integrity in our development initiatives.”

Key Indicators

The effectiveness of ADB’s risk management plan will be measured by several key indicators, including:

  • Increased sector O&M budgets
  • Improved quality of internal audits
  • Reduced unplanned expenditures

Partnerships for Implementation

ADB has also partnered with other development partners to support the implementation of its risk management plan, which is expected to have a positive impact on economic sustainability in the region.