As the Asian Development Bank prepares its 2030 strategy roadmap, addressing the region’s rising wealth inequality is crucial if development is to continue apace, bank officials and civil society figures said on Friday.
Speaking at the ADB’s 50th annual meeting, Tomoyuki Kimura, deputy director general of the bank’s Strategy, Policy and Review Department, urged the audience to help the ADB figure out how to make large infrastructure projects more inclusive in the years to come.
“Although we believe economic growth is necessary for reducing inequality and improving inclusiveness, we also fully understand that just higher growth does not automatically trickle down to the poor and vulnerable,” he said, during a session on wealth inequality held with Oxfam.
The ADB, he stressed, would remain primarily focused on infrastructure. “So the question is how can we make our infrastructure project more inclusive?”
“We believe in supporting economic growth through large, national infrastructure such as expressways, transmission lines, mass transit systems is also important. But then we have to continue efforts to make those large-scale infrastructure more inclusive. This is one of the areas where suggestions and ideas from all of you highly appreciated,” Kimura said.
The growth and implications of the wealth gap are stark. An ADB report from 2012 found that had wealth inequality in the region remained stable between 1990 and 2010, an additional 240 million people would have been pulled out of poverty. Last year, an IMF working paper noted that steeply rising wealth inequality had hampered equitable growth across most of the region.
Standing in front of a slide that noted: “Just 8 billionaires own the same amount of wealth as the poorest 3.6 billion people,” Trini Leung, director general of Oxfam Hong Kong, stressed the need for a living wage and said multilateral development banks retained a unique position to push for higher standards.
“We think it’s very important that inclusive growth has indicators and has to be inclusive. If we introduce the private sector and one country is competing with another for trade deals, agreements, contracts, it is a trend of racing to the bottom. How will we arrest this trend? This is what multilateral agencies like ADB, like a lot of regional or international platforms can promote. How can we raise the standard of inclusive growth so that inequality does not have to be a necessary evil nor even a natural outcome of growth and development?”
UNI Apro Regional Secretary Christopher Ng echoed the call for a focus on workers’ rights, saying that the forthcoming Fourth Industrial Revolution — focused on technological advances — threatens to leave behind entire populations unless institutions like the ADB move rapidly.
“I have a special suggestion to ADB, at the end of the day under the Fourth Industrial Revolution, the only safeguard for workers and people in general is to empower them to make sure they are equipped with all the necessary skill so they are employable. It is the only safeguard we can offer them.”
Others highlighted the need for the ADB to address taxation and tax collection, adjust an institutional culture that sometimes prioritizes loan approval rates over development effectiveness, and push for social entrepreneurship. After much advocating, reducing income inequality made it into the U.N. Sustainable Development Goals. Many hope the bank will take its cue from that and make a commitment to combatting inequality a distinct goal of its Strategy 2030.
Nisha Agrawal, CEO of Oxfam India, issued a stark warning about what is at stake.
“There are many people who are disgruntled by what the last 50 years have developed — the last 20 years in particular have delivered to them — and are wanting to tear down global institutions, global systems that have been put in place in the last 20 years,” said Agrawal “It’s a dangerous time in the world and we feel it’s very very urgent to correct course.”
Devex is on the ground at the ADB 50th Annual Meeting. Stay tuned to Devex for coverage.