Friday, 19 July 2019

Asian Development Bank: Mobilising resources

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Yokohama is an apt setting for the Asian Development Bank’s 50th anniversary meeting. The Japanese port city was one of the earliest to open to international trade, and one of the first beneficiaries of infrastructure financing that combined public and private resources at home and overseas.

Japan’s first railway, a 29km track connecting Yokohama with Tokyo in 1872, was funded in part through bonds sold in the London market. Some 145 years later, the idea of mobilising international finance for Asian infrastructure remains as relevant today as it was then.

Leveraging resources and mobilising capital is a key theme of the ADB’s golden jubilee year. Asia’s infrastructure needs are greater than ever – at an estimated US$1.7trn a year, according to the ADB’s most recent report – and the world is looking for new and innovative ways of financing its commitments to tackling climate change. No multilateral development bank or individual government can meet those challenges alone.

Japan also offers Asian delegates a chance to debate social issues such as gender equality and aged care, both important features of the Japanese economy.

Its battle to revive its economy amid volatile global capital flows also makes Japan a fitting backdrop for discussion of how Asian policymakers can respond to growing exogenous threats. US policy has turned unpredictable since Donald Trump’s inauguration as president earlier this year, and the future of the European Union is adding to global uncertainty. North Korea’s recent sabre-rattling is also raising geopolitical tensions.

The ADB’s 50th anniversary is also a time to reaffirm the bank’s mission in tackling poverty and promoting sustainable development as the region grows wealthier. Already 95% of Asia’s population lives in middle-income countries, and the bank will have to evolve as its members progress towards higher-income status.

While its financial resources remain important, the ADB’s next 50 years are likely to be very different from its first, with a greater focus on leveraging additional resources from public and private partners, and on shaping good policy.

Under its president, Takehiko Nakao, the ADB is in the midst of a thorough review that will shape its strategy until 2030 and hone its focus on environmental and social issues, as well as poverty reduction.

Yokohama’s first railway still runs today between Sakuragicho station in Yokohama and Tokyo central as part of the JR East network, albeit with vastly updated rolling stock. With the right approach, the ADB can look forward to an equally long and productive future. 

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