Introduction Improving livelihoods in fragile- and conflict-affected situations (FCAS) and small island developing states (SIDS) has emerged as a strategic priority for the Asian Development Bank (ADB) and its development partners. In June 2021, ADB published the FCAS and SIDS Approach, which details tailored ways of working in its most vulnerable client countries. Meanwhile, the African Development Bank, United Nations Development Programme, and European Investment Bank are among several development partners working on new fragility strategies. And the World Bank, which is in the early stages of implementing its Strategy for Fragility, Conflict, and Violence 2020–2025, announced that it will conduct early replenishment of the International Development Association, its fund to support the world’s poorest countries, many of them conflict-ridden. The coronavirus disease (COVID-19) crisis has had an outsized impact on the world’s poorest and most vulnerable countries. However, even before the pandemic, ADB was redoubling its efforts to help these nations advance along the fragility-to-stability continuum. In August 2019, ADB formed a dedicated FCAS team to refine ADB’s approach to economic and social development in FCAS and SIDS. This explainer summarizes that approach. Understanding FCAS and SIDS ADB classifies 11 client countries as FCAS using a classification system agreed upon with other multilateral development banks, and 16 developing member countries self-identify as SIDS, including eight that are also classified as FCAS (Figure 1). Figure 1: FCAS and SIDS in Asia and the Pacific FCAS and SIDS in Asia and the Pacific share similar constraints and fragilities—for example, a strong need for strengthened governance and institutional capacity building, high vulnerability to economic shocks, gender inequality, and less-developed private sectors. Other challenges are more specific to SIDS (e.g., remote and isolated location, small population, and vulnerability to climate change and extreme weather events), or to FCAS (e.g., rule-of-law issues, violence). These constraints present unique challenges to doing businesses in these countries. To overcome these challenges and raise up lives in FCAS, SIDS, and subnational pockets of fragility in Asia and the Pacific, ADB targets four broad stages of the development cycle: strategic planning; country programming; project design; and project implementation, monitoring, and evaluation. Stage 1: Strategic Planning ADB became the first multilateral development bank to bring FCAS and SIDS together under a single operational approach. The combined approach addresses the transient fragilities of FCAS along with the more permanent fragilities of SIDS. The FSA and the complementary Pacific Approach, 2021–2025, which guides development in 12 of ADB’s Pacific SIDS clients, promote tailored approaches in delivering more effective projects in fragile contexts. Tailored approaches represent a pivot away from standard, one-size-fits-all development blueprints toward a nuanced model that accounts for the specific contexts of each country or situation. “Context” comprises the suite of risks, fragility drivers, and other resilience factors specific to a country or situation. These fall into five categories: sociopolitical (e.g., political stability, regional disparity), security (e.g., conflict, terrorism), economic (e.g., narrow asset base, debt distress), institutional (e.g., weak governance, corruption), and environmental (e.g., vulnerability to climate change, disasters). Context-specific development involves deepening understanding of these risk areas, then taking advantage of operational flexibilities offered under the FCAS and SIDS Approach and the Pacific Approach to design programs and projects that better consider the needs and capacities of FCAS and SIDS clients. This fundamental development template lies at the heart of the combined approach. Stage 2: Country Programming The most important tool that helps ADB adopt tailored, context-specific approaches in FCAS and SIDS is the fragility and resilience assessment. A comprehensive assessment of each of the five categories of fragility driver (sociopolitical, security, economic, institutional, and environmental) informs the country partnership strategy. For instance, the fragility and resilience assessment for Papua New Guinea (PNG) highlighted weaknesses in governance, service delivery, and state-owned enterprise performance, among others. To address these fragilities, ADB’s country partnership strategy for PNG, 2021–2025 prescribes extra support for institutional strengthening, procurement, public financial management, and state-owned enterprise reform. The assessment for Timor-Leste highlights the importance of remittances, which have the potential to generate jobs in the private sector. This analysis can feed into the country partnership strategy, and eventually become a component of project design. In preparing these fragility and resilience assessments, ADB’s consultations extend well beyond the usual range of national counterparts. In PNG, where the rural majority depend on traditional tribal and clan leadership structures and on community- and faith-based groups for health, education, and other basic services, ADB engaged heavily with civil society, faith-based organizations, and local chiefs and elders. Stage 3: Project Design At this stage, country teams consider the risks and fragilities outlined in the fragility and resilience assessment—and incorporated in the country partnership strategy—to tailor projects to FCAS and SIDS contexts, with support from ADB’s FCAS team. This often involves novel project modalities, financing instruments, and/or partnerships with humanitarian actors or other development partners. For instance, ADB’s FCAS team is supporting the design of an emergency assistance grant targeting refugees from an FCAS country. The team will review potential engineering designs and project implementation arrangements to ensure that they meet the needs of both the refugees and the host communities. Utilizing available flexibilities under the FCAS and SIDS Approach, the team will help design a procurement plan that is tailored to the capacities of local contractors and mitigates risks associated with procurement in communities of displaced persons. In SIDS, project designers have successfully partnered with innovative financing mechanisms, such as the Global Environment Facility, Green Climate Fund, and Strategic Climate Fund, to help countries meet ambitious renewable energy targets. ADB supported the first private-sector-led solar power project in Tonga, currently under construction, which will unveil a credit enhancement structure under the Pacific Renewable Energy Program. This resulted from the ongoing Tonga Renewable Energy Project, cofinanced by the Green Climate Fund, which is installing large battery energy storage systems to catalyze private investment in intermittent renewable energy generation. ADB finances a growing number of renewable energy projects in the Pacific under the Pacific Renewable Energy Investment Facility, which enables streamlined internal procedures to allow ADB to process small-value projects in SIDS faster and with lower transaction costs. Stage 4: Project Implementation, Monitoring, and Evaluation Capacity building is essential at this stage—not only for government counterparts, who tend to require extra handholding in FCAS and SIDS, but also for ADB staff, who require a broader understanding of political, governance, and other risks. The FCAS team will conduct training for all ADB staff doing business in FCAS and SIDS contexts. Training kicked off in November with the “Leadership in FCAS” series, which targets FCAS champions working across ADB departments. Integration of digital technologies, a key component of the FCAS and SIDS Approach, comes in especially handy for monitoring projects in areas that may be hard to reach because of conflict or geographic isolation. For instance, the Sustainable and Climate-Resilient Connectivity Project in Nauru uses drones and digital technology to gather monitoring data that project officers can use to identify risks and problems. Lastly, to improve evaluation at both the project and portfolio level, the FCAS team maintains the FCAS and SIDS Dashboard, an internal tool that aggregates data from all ADB projects in FCAS and SIDS. The dashboard gives project managers a better idea of what is working and what is not, allowing them to make well-informed decisions about how best to allocate ADB resources in these countries. In conclusion, while the FCAS and SIDS Approach is new, many of its tailored approaches will be familiar to development practitioners. ADB’s challenge going forward is to integrate these approaches into more aspects of its work in FCAS and SIDS. The result will be improved project results and a more resilient future for ADB’s most vulnerable client countries. Resources Asian Development Bank (ADB). 2021. Fragile and Conflict-Affected Situations and Small Island Developing States Approach. Manila. ADB. 2021. Improving ADB Operations in Fragile and Conflict-affected Situations and Small Island Developing States. Video. 18 February. ADB. 2021. Pacific Approach, 2021–2025. Manila. ADB. 2021. Pacific Renewable Energy Investment Facility Annual Report, January–December 2020. Manila. ADB. 2021. Papua New Guinea: Country Partnership Strategy, 2021–2025—Achieving Diversified, Sustained, and Inclusive Growth. Manila. Ask the Experts Samuel Tumiwa Representative, North American Representative Office, Asian Development Bank Samuel Tumiwa is assigned as ADB’s Representative for North America. Prior to this, he was Director for the Climate Change and Sustainable Development Department’s Fragility and Engagement Division. He also served as ADB’s Country Director for Afghanistan and Deputy Representative for North America. He initially joined ADB as a Renewable Energy Specialist. Most notably, he established the bank’s most clean energy and climate program—created to meet its first climate target of $1 billion in clean energy financing in 2008. Follow Samuel Tumiwa on Asian Development Bank (ADB) The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.