Introduction

1. Over the past few decades, developing member countries (DMCs) of the Asian Development Bank (ADB), especially those with transitional economies, have been undertaking reforms aimed at promoting more market-oriented policies and preparing themselves for increased interaction with neighboring market-oriented countries and the global economy. One leading example of this has been Viet Nam’s Doi Moi and associated public administration reform. These reforms change the role of the state and the public sector and require officials in the central and local governments to acquire a broad range of skills to address new challenges.

2. ADB has enhanced its capacity-building efforts and public policy formulation in recent years. To this end, in 1996 ADB established the Asian Development Bank Institute (ADBI) as a subsidiary body. The stated objectives of ADBI were to identify effective development strategies and to improve the capacity for sound development management of the agencies and organizations in DMCs of ADB engaged in development work¹.

3. In recognition of the above, the Japanese Government (the Government) is prepared to make available to ADBI a trust fund contribution of ¥905.362 million for the Japan Fund for Public Policy Training (JFPPT) in the Government’s fiscal year 2003. The contribution will finance on a grant basis the support of DMC-based public policy training institutions and/or capacity building activities of midcareer to senior-level officials, to equip them with practical economic management skills.

4. This paper outlines the proposed cooperation arrangements for 3 years from the establishment of the JFPPT between the Government and ADBI. The arrangements concern the initial contribution of ¥905.4 million and further contribution, if any, of the Government to the JFPPT. The 3-year period may be extended by agreement between the Government and ADBI.