Asia development banks share goals

At ADB annual meeting, chief sees no need to vie with AIIB

Asia has a great demand for infrastructure funding, and both the Asian Development Bank and the new Asian Infrastructure Investment Bank can cooperate with each other to provide that capital, ADB President Takehiko Nakao said on Thursday.

Speaking at a news conference in Yokohama, Japan, to kick off his bank’s annual meeting, Nakao said: “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. We can cooperate.”

The ADB is based in Manila, Philippines, and the AIIB in Beijing.

Nakao’s comments came amid discussions on whether the two lenders will team up to promote development of all facets of Asia’s economy, as has been said in repeated comments by both Jin Liqun, president of the AIIB, and Nakao that they would not create friction with each other in the Asian financial landscape.

“I’ve had nine discussions with Mr Jin in the past two years to discuss cooperation,” Nakao said. “There are many things on which we can cooperate.” Among those are the use of local currencies for financing, enhancing expertise and securing environmental and social safeguards, Nakao said.

Analysts said cooperation between the two banks will benefit both. “The ADB has a long history of infrastructure building in Asia; while the AIIB is a new institution, it has wider representation since it includes members from non-Asian regions, such as Europe, Latin America and Africa,” said Liang Haiming, chief economist of the China Silk Road i-Valley Research Institute. “The cooperation can help the ADB to expand in other regions while it will facilitate the AIIB in gaining a foothold in infrastructure construction in Asia.”

Liang said even if there’s any competition between them, it is “constructive”.

“Competition will not affect their respective development,” Liang said.

Nakao also said his bank was open to the proposed Belt and Road Initiative, composed of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, put forward in 2013 by President Xi Jinping. The initiative aims to build infrastructure and trade links connecting Asia with Europe and Africa along ancient land and maritime routes to promote common prosperity of those regions.

“It’s a good idea to connect countries and to promote activities,” Nakao said. “We are happy to cooperate.”

Nakao praised China’s role in the development of the ADB. “China has been a very important member since 1986 (when it became an ADB member),” he said.

At that time, China received $34 billion in loan assistance from the ADB from 1986 to 2015.