World|economy|May 6, 2019 / 09:57 AM
52nd annual meeting of ADB Board of Governors concludes in Fiji, Republic of Korea to host annual meeting next year

AKIPRESS.COM - The 52nd annual meeting of the Asian Development Bank Board of Governors closed in Nadi, Fiji.

In closing address at the 52nd Annual Meeting ADB President Takehiko Nakao spoke broadly on six points: regional economies, Strategy 2030 and operations, private sector operations, concessional support, differentiated pricing and graduation policy, organizational issues.

1. Regional Economies

The regional economy has been steady and some countries are even accelerating, supported by consumption and investment. Countries’ economies are also promoted by innovation and technological development in the region.

There are uncertainties, including trade tensions, requiring vigilance. If trade tensions escalate, they could seriously undermine consumer and investor confidence and weaken growth in the region.

It is necessary to continue to pursue strong macroeconomic and structural policies and maintain open trade and investment regimes.

Tourism is becoming an important contributor to gross domestic product (GDP) and jobs. To make tourism sustainable, it is necessary to protect the environment, cultural heritage, and communities through appropriate policies and regulations.

2. Strategy 2030 and Operations

Governors commended ADB on its achievements last year, including commitments and disbursements, private sector operations, and climate finance.

There was very broad and strong support for Strategy 2030.

Governors emphasized the importance of the unfinished poverty reduction agenda. In that context, support for micro-, small-, and medium-sized enterprises and financial inclusion were discussed.

Social sectors are important and universal health coverage is one of the important issues that will be discussed in this year’s G20.

Gender equality is one of our seven operational priorities. Governors appreciated the target that at least 75% of the number of ADB’s committed operations will promote gender equality by 2030. The target is for both sovereign and nonsovereign operations. We will encourage private companies to include gender elements.

Tackling climate change is another priority. At least 75% of the number of ADB’s committed operations will be supporting climate actions by 2030.

Regarding the 2009 energy policy, because there have been many developments since then, such as the Paris Agreement and Sustainable Development Goals, we will review the energy policy, informed by the Independent Evaluation Department’s evaluation.

The Action Plan for Healthy Oceans and Sustainable Blue Economies was launched. Governors stressed the need to pay greater attention to ocean health for the future of the planet, as well as lives and livelihoods of the people. Under the action plan, ADB investment and technical assistance will be increased to $5 billion by 2024.

3. Private Sector Operations

Governors appreciated Strategy 2030’s target that one-third of ADB operations by number by 2024 will be private sector operations.

There was a discussion on the importance of expanding to frontier economies and social sectors such as health and education.

ADB is expanding staff resources for private sector operations and risk management, and will increase outposting to resident missions.

In 2018, ADB secured commercial co-financing (including short-term cofinancing) of $7.2 billion on top of $3.1 billion from our private sector operations. It is necessary to continue to expand it to achieve the Strategy 2030 target of every $1 financing from ADB for private sector operations being matched by $2.5 of long-term cofinancing.

4. Concessional Support

Governors expressed their continued strong support for ADB’s grant operations through the Asian Development Fund (ADF) and other concessional assistance.

Fragile and conflict-affected situations like Afghanistan should continue to be supported. There was appreciation for ADB’s quick response in providing a $100 million grant for the displaced people in Bangladesh.

Governors discussed the need for income transfer from ordinary capital resources (OCR) to ADF. In the paper we provided for the ADF Donors Meeting in Fiji, we already included the increasing number of net income transfers from OCR for ADF 13 based on the numbers in the Board paper regarding the merger of the OCR balance sheet and ADF lending operations. Azerbaijan said they will start making contributions to ADF as a donor.

The ADB President expressed hope that substantial support will be realized from traditional developed country donors for ADF as well as graduated developing members—Brunei Darussalam; Hong Kong, China; Republic of Korea; Singapore; and Taipei,China—and regular OCR countries—India, Indonesia, Kazakhstan, Malaysia, People’s Republic of China, and Thailand.

5. Differentiated Pricing and Graduation Policy

Governors discussed the need for differentiated pricing among regular OCR loans reflecting the evolution of country situations.

Governors discussed the application of the graduation policy. This should be done in consultation with countries based on the three criteria of (i) per capita national income, (ii) availability of commercial capital flows on reasonable terms, and (iii) strength of key economic and social institutions, and in the context of country partnership strategies.

There was a discussion that the graduation policy and differentiated pricing should be applied properly and fairly. Continued engagement with upper-middle income countries (UMICs) was emphasized, focusing on such areas as climate change, the environment, and other regional public goods as mentioned in Strategy 2030.

6. ADB Organizational Issues

About ADB itself, a stronger staff base for implementing Strategy 2030 is needed. To develop and deploy staff more effectively, ADB will promote staff mobility between departments, introduce flexible work arrangements, and continue to strengthen training for managers and staff.

There is a need for staff diversity, including gender.

The Republic of Korea will host the annual meeting next year.

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