Challenges, Lessons, and Prospects for Operationalizing Regional Projects in Asia: Legal and Institutional Aspects

CHAPTER 1

Introduction

For the past decade and a half, the international development organizations (IDOs) have been making continual efforts to finance multicountry projects with regional goals. Despite their efforts, the structure of intervention through projects with regional development goals has not been easy to design and implement. In particular, difficulties have arisen in the Asian, and specifically in the South Asian, context. Experience shows that one of the reasons has been the lack of clarity in the enabling legal framework and tools, to a large extent within the client countries, and, to a limited extent, also within the development organizations.

A cursory review of a sample of projects in a number of sectors financed by the World Bank and a few other international financing organizations reveals different (if not unique) approaches in the design. These differences can often be attributed to the distinct legal, institutional, and political environments of different countries. In difficult environments, more time had to be spent in the preparation of such projects, thus increasing their opportunity costs.

This study, therefore, is born of a need for more precise and comprehensive information about the legal and institutional aspects involved in designing regional projects. Based essentially on desk study, with limited field consultation, its objective is to share information from places where such projects have been successfully designed and smoothly implemented and to review the general legal and institutional tools, prospects, and opportunities for designing and implementing such projects.

It is important to highlight at the outset that, in spite of some brief introductory discussions in chapter 2, primarily meant for setting the stage, this is not a study about regional integration per se, nor the aspects of its delivery, which, understandably, remain a much larger topic, and beyond its scope. It is about regional projects in a narrow sense. Moreover, the study has a particular focus on Asia, so as to adapt the features of the successful regional projects and use them, if deemed applicable, in the Asian context. In this vein, this study intends to examine the emerging practice in the different parts of the Bank, in preparing regional projects and to draw lessons. In so doing, it also reviews the framework for regional projects in which international development organizations operate, the problems they face, and the possibilities they provide for countries that rely on international financing for their development.

This study is divided into eight chapters, broadly covering the theory and the practice in different places, and identifying the opportunities and prospects for adaptability in Asia. Following this introduction, chapter 2 briefly touches upon the concept and meaning of a region, the purpose and the value of regionalism, the needs and justifications for preparing regionwide operations, and briefly describes the different types of regional organizations along with their institutional framework. These discussions are followed by narrowing down the scope to a more detailed discussion of regional projects. The definition of regional projects for the purpose of this study is covered in chapter 3. In view of the significance of political will and commitment in all operations of this type (in other words, ownership of countries participating in such projects), chapter 4 devotes a few paragraphs to discuss the value of political commitment of countries and the efforts required to securing it.

Chapter 5 is about the general legal structure applicable to regional projects. In addition to briefly discussing the different scenarios in which the World Bank may be called for intervention, it also reviews, through several subsections, the instruments and implementation modalities that have been used, both the most common ones and the particular and unique ones. The overview is followed by a recapitulation, in a schematic form, of the organizational and decision-making models.

At this juncture, it is important to emphasize that this study does not purport to describe all the regional operations that have been financed so far, but to portray, as examples, the salient features of some selected projects, as relevant from a legal and institutional standpoint only. It does not necessarily aim at addressing the delivery and implementation aspects, except merely in passing, and for the unique purpose of creating a thread to facilitate the understanding of the general trend, and the legal aspects pertaining to these types of operations. Attempts are made, to the extent relevant and practical, to include at least one sample per region, where the World Bank has intervened through financing.

Chapter 6 is about the special and unique situation of Asia, the main focus of this study, and the challenges resulting from its uniqueness. In that context, it touches upon a number of critical legal and institutional elements that are seemingly absent in the Asian context, and which make it difficult to smoothly operationalize regional projects, along with specific difficulties encountered by project teams. Following the discussions of the critical elements that are absent, chapter 7 makes some proposals for consideration, by teams in developing regional projects. However, it should be made clear, this study intends to neither be proscriptive nor prescriptive, in any manner whatsoever.

Finally, the study provides a brief conclusion in chapter 8, followed by a list of selected references, which, the author hopes, will be useful for those who wish to conduct further research on the topic.

CHAPTER 2

General Setting

To be able to appreciate well the notion of regional projects, it is important to understand broadly the concept of a region, the meaning of regionalism, the purpose and advantages of relying on regional objectives in development, and the different institutional frameworks that exist in the world.

Need for Regionalism

A Region is defined as a broad geographic area containing a population whose members possess sufficient historical, cultural, economic, or social homogeneity to distinguish them from others.¹ Regionalism, on the other hand, a term commonly used by political scientists, diplomats, and development professionals, is an approach to relations among countries that integrates policy and management specifics to deal with the different issues and concerns pertaining to the region. Regionalism is integrative for two main reasons. First, it looks beyond political and jurisdictional boundaries, embracing a distinctly trans-boundary approach that recognizes the natural territory of public issues (such as watersheds, ecosystems, bioregions, or other organic regions).² Second, although it may typically start by focusing on a narrow specific issue, a regional initiative, eventually, touches on a mix of broad social, economic, political, environmental, and developmental