At the opening of the Asian Development Bank's 50th annual meeting, President Takehiko Nakao had a key message: The region’s largest development bank is as relevant as ever.
Amid talk of growing competition in the development banking sector, shrinking shareholder resources and an increasing focus on protectionism in many countries, Nakao opened the anniversary meeting in Yokohama with a presentation of the ADB’s successes and growth over the past 50 years. Then, he argued for its future.
“We need more investment in infrastructure,” said Takao. In Asia alone, “$1.7 trillion a year is needed for power, transport, communication and so on.”
Meeting those needs will require collaborating — not competing — with the Beijing-based Asian Infrastructure Investment Bank, Nakao said. “We can cooperate with the AIIB because they are focusing on infrastructure with a leaner system,” he said.
In the past two years, Nakao said he has met with AIIB President Jin Liqun nine times to discuss co-financing projects and other cooperation. “The media tries to make rivals of ADB and AIIB as if we are in confronting relationships but there is no need for that,” he said.
Internally, the ADB is focusing on becoming more nimble in a changing sector. Nakao spoke of the bank’s efforts to “economize” operations, including to support funding for the Sustainable Development Goals and COP21 actions to combat climate change.
“We are trying to streamline our processes regarding procurement, safeguards, and others, without jeopardizing or harming our original purpose,” he said. “We are making steadfast efforts to rationalize our systems and also to safeguard our budget and and make our budget value for money.”
At a moment of great political uncertainty in Europe and the United States — the latter of which is ADB’s second largest shareholder after Japan — Nakao suggested that Asian countries may help offset shortfalls. Governments in the region are taking on a growing role as financiers.
Looking at bilateral aid, he said “many countries — including Japan, [South] Korea, China — are now more proactive, so I’m not so pessimistic.”
Nakao sounded a similar note of optimism on trade. “Even if some countries want to adjust certain elements of trade, I don’t think it will have a major impact on trade flow,” he said. “At this point I don’t think protectionism is affecting our growth projections. Of course we must be careful to keep momentum, growth.”
Devex is on the ground at the ADB 50th Annual Meeting. Stay tuned to Devex for coverage.
