Middle-income countries in Asia and the Pacific face several evolving development challenges, including poverty, inequality, unplanned urbanization, environmental degradation and climate change, low productivity and lack of competitiveness, macroeconomic instability, and insufficient economic diversification. At the same time, these countries have displayed dynamism that has created new opportunities.
For ADB to engage with these countries effectively, it is critical that it understands these rapidly evolving challenges and opportunities. Examining ADB’s actions at the corporate, country, and project levels, the evaluation finds that ADB has been responsive to middle-income countries' need. As engagement with these countries is embodied in the ADB corporate strategy, ADB’s graduation policy may need to be rethought. While country programs were generally successful, a recurring message from evaluations is the need to orient country programs to address the specific and new nature of their development challenges. Project performance raises concerns about efficiency and sustainability.
Given the growing number of middle-income countries, and the rapidly growing group of upper middle-income countries, ADB needs to make some strategic policy choices These choices have to do with anchoring financial interventions on knowledge solutions, scaling up operations while also targeting the new challenges of this clientele, decisively supporting private sector and public-private partnerships, and revisiting the policy of graduating countries from regular support.