ADB: Infrastructure, digitization to push Asia’s economic growth
ASIAN ECONOMIES enjoy robust growth but need fresh approaches in order to provide better lives for all, the Asian Development Bank (ADB) said ahead of its annual meeting this week, with Manila’s infrastructure push and digitization boom capturing the region’s progress.
The ADB will gather leaders and experts at its headquarters in Mandaluyong for its 51st Annual Meeting on May 3-6, working around the theme “Linking People and Economies for Inclusive Development.”
Central to this year’s discussions is the crafting of the Strategy 2030, which will outline the multilateral lender’s long- term strategy for development for its 48 regional members and 19 other states.
“Asia is growing very fast and we should continue to have stronger policies,” ADB President Takehiko Nakao said in an April 11 interview with BusinessWorld.
ADB sees Developing Asia growing by 6% in 2018, sustaining the momentum seen over the past several years as the fastest-growing region in the world. Against this rosy growth momentum, pockets of poverty remain even in the more developed nations.
“We’ll discuss how we must continue to address the remaining poverty,” Mr. Nakao said. “There are issues like urbanization and aging, climate change, and there are more disasters in Asian countries — we should make our systems more resilient.”
TARGETING 2030
The ADB targets to engage delegates pegged at 3,000 in discussions for its Strategy 2030, which
takes off from the current policy framework that factors in new global development agendas and expanding needs for Asia-Pacific amid a fast-changing and more diverse landscape.
Currently, the ADB draws direction from its Strategy 2020 agenda, although Mr. Nakao said that needs have morphed as more economies scale up as middleincome countries.
Embracing new technologies is a main theme of the ADB’s new strategy, taking stock of opportunities for financial inclusion and increased efficiency while also acknowledging risks, such as data privacy in a digitally-driven landscape.
The ADB has also allayed fears that technology and robotics will displace workers, instead pointing out that it will steer employment towards “more cognitive” and “unroutine” jobs.
Intellectual property rights also form part of the picture, Mr. Nakao said, which so happens to be the root of a trade dispute between the United States and China which has led to a showdown in import tariffs.
Among the remaining challenges in Asia are large infrastructure gaps and widening income inequality, given that around 330 million people still live in absolute poverty.
A ‘BETTER’ MANILA
The Philippines plays host to the ADB annual meeting after six years, with no less than Mr. Nakao pointing out the progress made here since then.
“I think it is generally becoming better and there are more middle class enjoying a better life. But one of the problems of the Philippines, of course, is there are many poor people in rural areas,” the ADB chief said, recalling his visit to Manila during the 2012 meetings as a former finance minister.
Mr. Nakao then moved to the Philippine capital in 2013 to take the helm at ADB, which has been based in Manila since 1966.
The multilateral lender remains sanguine about the Philippines as they expect the economy to grow by 6.8% this year and 6.9% in 2019, coming from a 6.7% pace in 2017. This compares to the 7-8% annual growth goal of the Duterte administration, with poverty incidence seen dropping to 14% by 2022.
Investor appetite towards the Philippines is also “becoming better,” Mr. Nakao said, drawing optimism from a solid reform agenda of the government given a local infrastructure push, tax reform, and efforts to deepen the local capital market. Worsening traffic congestion, however, is a pressing problem.
“[T]here is no reason that we cannot be optimistic, positive about the future of the country… But once again, the investment in infrastructure, the investment in education, efforts to raise the living of poorer people is not just for fairness but will also raise the growth potential of the country if people enjoy better lives, they spend more, they educate their kids better — that is the basis of continued growth,” Mr. Nakao added.
The ADB has provided $ 1.08 billion in loans to the Philippines in 2017. Across Asia-Pacific, the ADB has extended over $250 billion in grants and loans over the last 50 years.