How different will the Asian Development Bank be in 2020 from how it is today?
As the Manila-based institution undergoes reform, with the overall goal of maintaining its relevance in Asia-Pacific’s rapidly evolving development landscape and with new players like the China-led Asia Infrastructure Investment Bank and the BRICS’ New Development Bank, we shouldn’t expect major changes like those pushed by Jim Kim at the World Bank.
But we recently learned a few of things to watch out for in the coming years.
During a media training workshop at the bank’s headquarters in the Philippine capital, ADB President Takehiko Nakao hinted at plans to delegate more responsibilities to country offices and expand operations in low-income developing member countries, two of his top priorities until 2020.
To combat the bank’s (perceived) reputation as an opaque bureaucratic behemoth, Nakao wants to engage more with the media, and he took some time in his busy schedule to sit down with a select group of reporters from developing countries. Nakao fielded some tough questions about where ADB is headed, how it’s going to liaise with AIIB, Japan’s influence within the institution, and the reality that all but two of its DMCs — war-torn Afghanistan and disaster-prone Nepal — are expected to reach middle-income economy status by the time the bank’s Strategy 2020 internal reform process is concluded in less than six years.
What else did the former Japanese diplomat reveal about what’s cooking in ADB’s near future?
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Expect powerful and more autonomous offices in countries like China, India, Indonesia and Pakistan, as well as more programs directed toward LICs. This is good news for Afghanistan, whose development trajectory may change as foreign troops pull out of the country and new leaders take charge in Kabul. Other DMCs that should benefit from this increased focus on the poorest countries for ADB loans and grants are fragile Pacific island states as well as East Timor, seemingly on everyone’s back burner for a few years now but desperately in need of foreign assistance to not derail the tiny island nation’s development progress following its hard-fought independence from Indonesia.
Nakao mentioned he would like to boost the bank’s ties with its host country, likening ADB’s relationship with the Philippines to that of an old couple whose partners don’t pay too much attention to one another anymore after living together in the same house for so long.
Sometimes, he quipped, Filipinos seem to be more interested in what the World Bank has to say about their country than ADB “because we’re here.”
The Philippines needs heavy investment in infrastructure, Nakao asserted. Infrastructure is an area where Asia-Pacific’s annual financing needs of $800 billion per year are far beyond the bank’s capacity to address on its own. That’s precisely the niche AIIB — Chinese President Xi Jinping’s pet project to boost Beijing’s development footprint in the region — comes into play.
ADB officials — at least officially — say they’re eager to work with the new development bank in all areas where both sides can find common ground. Asked about whether collaborating with AIIB could be potentially problematic due to China’s track record of megaprojects that involve the forced resettlement of communities with scant compensation and disregard of environmental standards, Nessim Ahmad, ADB’s deputy director-general for regional and sustainable development, said he’s confident that the Chinese will learn from ADB’s decades of experience in the region and both institutions together will “raise the bar” on safeguards.
Strategy 2020 is all about working together and seeking feedback from the full array of stakeholders — from staff at headquarters to countries offices, to clients — to build a consensus, ADB Managing Director General Juan Miranda said. The process of crafting the plan involved a much-needed reality check for ADB that in the end turned out to be “quite healthy” for everyone, he added.
Miranda, who has a background in investment banking and was only recently appointed to his current post, stressed that one key advantage the institution has over a commercial bank is the “passion” of its staff to implement whatever changes are necessary to make ADB work better, faster and more efficiently.
One major lesson he’s learned is how to deal with unexpected obstacles.
“You may get it totally right, or you might make a few mistakes,” Miranda said when discussing Strategy 2020. “We know that’s a tradeoff, but we are confident that the path we are taking to bring about change is to respond better to our clients.”
If adjustments need to be made along the way, he said, ADB will respond immediately to leave no gaps.
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