New financing institutions’ focus on cooperation

Competition is an integral part of modern economy, with various players vying with each other to grab market shares and become industrial leaders. But for major development financing institutions such as the Asian Development Bank and the Asian Infrastructure Investment Bank, the buzzword is cooperation, not competition.

At the 50th annual meeting of the ADB in Yokohama, Japan, last week which was attended by more than 5,500 delegates, I was impressed to see officials of both the ADB and AIIB consciously avoid the use of the word “competition” to define their relationship despite the repeated use of innuendoes by reporters.

Asked about whether the two banks will compete with each other in infrastructure financing in Asia, ADB President Takehiko Nakao and Yasuyuki Sawada, ADB’s chief economist, both said the two banks do not see each other as rivals.

“We can complement each other. The financing needs are so large, so we don’t need to regard the AIIB as a kind of a rival in that regard,” Nakao told a news conference on Thursday, when the annual meeting of the ADB’s board of governors began. Nakao also showed his openness to new economic ideas by saying the ADB is willing to participate in the China-led Belt and Road Initiative, which despite not being confined to supporting Asian development, will certainly help boost economic activities in the region.

Their cooperation, more importantly, heralds brighter prospects for the future development of Asia ...