ADB closes 50th meeting determined to back infra
YOKOHAMA, JAPAN — The Asian Development Bank (ADB) yesterday capped here the 50th meeting of its Board of Governors — themed: “Building Together the Prosperity of Asia” — with a commitment to strengthen efforts to develop infrastructure and make economic expansion more inclusive, as well as an agreement among some members to collectively fortify resilience in the face of growing uncertainty.
The Philippines will host ADB’s 51st meeting next year, with the theme “Linking People and Economies for Inclusive Development” and Finance Secretary Carlos G. Dominguez III, in his remarks at a launch ceremony here yesterday, said it cannot be business as usual for the regional lender in the face of “new realities.”
In his closing address, ADB President Takehiko Nakao said “the battle against poverty is not over yet,” hence: “[r]educing poverty will remain our major focus.”
He also said the regional lender “will scale up” efforts to help meet the region’s $1.7-trillion annual infrastructure investment needs, with public-private partnerships playing a key role in this regard.
Mr. Nakao also noted that ADB was “on track” towards meeting a $6-billion financing target by 2020 for climate change mitigation.
In a meeting held on Friday, Southeast Asian finance ministers and central bank chiefs agreed with their peers from China, Japan and South Korea to strengthen resilience against possible financial shocks, with efforts entering on strengthening the $240-billion Chiang Mai Initiative Multilateralization currency swap arrangement.
A separate meeting of Southeast Asian and Japanese finance and central bank chiefs yielded, among others, a commitment to a new bilateral swap arrangement worth $ 40 billion to help their economies “to be ready to address short-term liquidity problems.”
NEW REALITIES
Yesterday also saw the launch of the Philippines’ hosting of ADB’s 2018 annual meeting.
It will be the 16th time the Philippines will host the event.
In a speech read for him by Philippine Ambassador to Japan Jose C. Laurel V at the launch ceremony, Budget Secretary Benjamin E. Diokno said that “as we narrate ADB’s many successes, we should be aware of the many problems that remain unsolved: income inequality, aging populations, urbanization and growing protectionism among others.”
“Perhaps next year’s summit will serve as a venue for meaningful conversations on these issues.”
In separate remarks, Teresita Sy-Coson, vice-chairman of SM Investments Corp. (SMIC), said investors should look through the Philippines’ occasional political dust and noise to see its robust macroeconomic fundamentals, adding that her group was optimistic “because the growth of the economy appears highly sustainable with increasing momentum...”
“I know it is diff icult to understand our politics and our President (Rodrigo R.) Duterte,” Ms. Sy-Coson said.
“In spite of the skepticism, our underlying economy has been conducive to business activities.”
She said SMIC will ride on the government’s ambitious infrastructure build, acceleration of regional development and a growing middle class.
She enumerated sectors that will benefit as property, construction, manufacturing and tourism, which itself “will have multiplier effects on food, transport, entertainment and retail.”
“This will uplift economies of less developed regions and promote inclusive growth, especially in the Visayas and Mindanao, where our President comes from,” Ms. Sy-Coson said.
“We believe favorable conditions will continue for at least another decade.”
In his own speech, Satori Suzuki, president of Toyota Motor Philippines Corp., said “open communication between industry and the government has raised business sector confidence in government actions.”
“While there may be some policy changes in the short term, we are confident that these changes will eventually support the Philippine government’s vision of investment-led growth.”
Mr. Dominguez closed the ceremony with his remarks, saying that in next year’s meeting, ADB should “begin the process of reinvention.”
“The world has changed, the bank should realign its programs to new realities,” he said.
“First, the economic balance of power has shifted: Asia is now expected to lead global growth. We cannot simply be content to track the development experience of the West. We have to rethink our strategies to growth,” Mr. Dominguez noted.
“Second, the world seems a lot more hostile to our progress today,” he added, particularly citing “economic nationalism” and “hostility to globalization” in the West.
“The member economies of ADB will be harmed by these emergent trends. We must prepare our economies to meet these challenges.”
Moreover, he said the ADB should work alongside new multilateral lenders like the China-led Asian Infrastructure Investment Bank.
“It is imperative that the ADB revisit modalities of its intervention in order to remain relevant and effective,” Mr. Dominguez said.
“The development needs of our region are changing: the bank must respond appropriately.” —