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Chapter 5

In Pursuit of Sustainable Economic and Social Development

Approved in 2010, the IDB-9 Institutional Strategy constitutes an agreed-upon roadmap between the Bank and its shareholders on the most pressing development challenges facing the Region at that time. This roadmap consolidated a shared vision on how to address those challenges by directing IDB support to specific priority areas and objectives. Formal reporting of the Corporate Results Framework (CRF), used to measure progress in implementing this Strategy, began with the 2012 Development Effectiveness Overview (DEO) (published in March 2013) and paved the way for the Bank and its shareholders to systematically take stock of where the Region and the Bank were in addressing these priority areas.

With this in mind, a natural way to conclude this 2015 edition of the DEO edition is by answering the following: To what degree has the IDB met expected results during 2012-2015 as measured by the CRF? How is the IDB planning to incorporate lessons learned into its work with client countries going forward? And what areas will be the focus of the IDB’s work with the countries over the next four-year period?

Two-thirds (66.7 percent) of the CRF targets for IDB’s Output Contributions to Regional Development Goals have been achieved (see Chapter 2 and Table B). As Chapter 4 shows, all four Lending Program Targets have been achieved (Table C). In the area of Operational Effectiveness and Efficiency, 57 percent of all Table D targets have been achieved.

Taken together, these results suggest that, although CRF 2012–2015 indicators have been largely achieved, there is still a long way to go, not only in terms of continuing to support development results across the Region, but also in further refining the Bank’s performance measurement framework.

As mandated by the Board of Governors as part of IDB-9, the Bank recently updated its Strategy to reflect the emerging challenges of the Region. Although still reflecting the IDB-9 strategic goals of reducing poverty and inequality and fostering sustainable growth, the Update to the Institutional Strategy 2010–2020 (UIS): Partnering with Latin America and the Caribbean to Improve Lives recalibrates the Bank’s vision through 2019.

The development of the UIS followed an extensive public consultation process involving nearly 300 partners, public sector officials, clients, academics, journalists, civil society representatives, and IDB employees.

The resulting feedback revealed the Region’s three cross-cutting issues and three challenges; and the IDB Group’s three comparative advantages that it will leverage through six operational guiding principles: Responsiveness; Multi-Sectoriality; Effectiveness and Efficiency; Leverage and Partnerships; Innovation and Knowledge; and Strategic Alignment. A visual overview of the UIS is provided in Figure 5.1. A detailed summary of the UIS, including how each of these issues, challenges, and operational guiding principles are defined can be found on the IDB website.

Figure 5.1
Main Elements of the Update to the Institutional Strategy (UIS)

Measuring the IDB Group’s Progress during 2016-2019

In order to measure progress in implementing the UIS, the CRF was also updated. The CRF 2016-2019 is structured along three levels: Regional Context; Country Development Results; and Inter-American Development Bank Group (IDBG) Performance.

The Regional Context level highlights the Region’s long-term development progress. These high level indicators are not attributable to IDBG-supported interventions because (as with the Regional Development Goals in the first CRF) progress made on each indicator is the result of a combination of actions, policies, and measures implemented or funded by the countries in the Region. The second level, Country Development Results, provides aggregate data on outputs and outcomes supported by IDBG-financed projects. The third level, IDBG Performance, measures how the Bank supports countries and clients in achieving results.

The CRF 2016-2019 comprises 55 main indicators (as opposed to the 84 indicators in the CRF 2012-2015). A set of auxiliary indicators has been included to report on the broader range of IDBG support to its borrowing member countries and clients. A complete list of indicators can be found in www.iadb.org/CRF.

Given the consolidation of the Bank’s private sector activities into the Inter-American Investment Corporation (IIC) as of January 1, 2016 (discussed in Chapter 1), the Update to the Institutional Strategy applies to the entire IDBG. The CRF 2016-2019 will be submitted for consideration and subsequent approval by the IIC Board of Executive Directors once the IIC’s business plan update is approved (at which point, the CRF 2016-2019 might require some adjustments to reflect said plan).

Reflecting on Experience

The IDBG understands that stock-taking is crucial in order to identify and internalize lessons from previous experience and avoid past errors. The 2013 edition of the DEO began a practice at the IDB of candidly reflecting on failure, which continues in this year’s DEO. Box 5.1 reflects on IDB’s experience implementing projects in the Region. Box 5.2 discusses five specific lessons derived from the Bank’s experience in designing and applying the CRF 2012-2015.

Looking Forward

Implementing the Bank’s overarching objectives of sustainable growth and reduction of poverty and inequality in the Region requires having a clear vision for the future. It also entails constantly monitoring signals, having the willingness and institutional capacity to quickly adapt to changing landscapes, and rethinking strategies as often as needed. It involves listening and engaging with a variety of stakeholders from the public and private sectors, civil society, and academia, among others, to systematically receive feedback on which development issues are most important to them.

Looking ahead to 2016 and beyond, the IDB is well-positioned to make this vision a reality – thanks not only to its institutional mandates through the UIS and the CRF 2016–2019, as well as the corporate and project level performance measurement systems that provide data for it, but also its willingness to continuously learn and improve its processes and operations. As the Region faces an uncertain future, the Bank reaffirms its commitment to work closely with each of its borrowing member countries, providing the needed financial resources, technical assistance, and policy advice to meet their unique and evolving needs and fine-tune its strategic direction when necessary. The work is far from finished. It is just the beginning of a new chapter on improving lives in Latin America and the Caribbean.