Accelerating Economic Transformation Program

Attaching support for this reform agenda to a crisis fighting effort and to an IMF (International Monetary Fund) adjustment program was a major handicap for the AETP (Accelerating Economic Transformation Program). A multiyear pursuit of structural transformation objectives would have benefited from not being linked to the short-term financial targets that govern macroeconomic stabilization programs, crucial as they are. In terms of both the efficacy of program design efforts and the depth of the necessary policy dialogue, a structural transformation agenda requires a continuity of engagement, experimentation, and monitoring that macroeconomic stabilization support efforts in general cannot accommodate. Macroeconomic adjustment programs often get paused or cancelled if financial targets are not met (irrespective of institutional reform achievements), and the timing of policy agreements is governed by financing pressures. In addition, macroeconomic stabilization programs have had, at best, a mixed track record in promoting medium-term growth. In view of the absence of any other modality in ADB at the time to support the macroeconomic stabilization challenge through quick disbursement of large foreign-currency resources, perhaps the programmatic approach pursued should have been focused exclusively on Output 1.