With China making generous loans to countries around the world, the Asian Development Bank should be seen more as an inspiration than as a rival
The Asian Development Bank (ADB) was proactively responding to new challenges arising in its mission to help developing countries when its board of governors gathered in Fiji on May 1 for the agency’s 52nd annual meeting.
In a speech, ADB president Takehiko Nakao outlined action plans to
implement “Strategy 2030” while
highlighting the bank’s 2018 loans and grants operations, which grew to a record $21.6 billion, up 55 per cent from 2013. The ADB will begin focusing more on quality and innovation in its operations while maintaining moderate
volume growth, he said.
According to Nakao, addressing the poverty and inequalities that continue to mire nations across Asia will remain a key priority for the ADB. “We will strengthen our support to the poorest and most vulnerable countries in the region, including those in fragile and conflict-affected situations and many small-island developing states,” he said.
Second, the ADB is speeding progress in promoting gender equality and will develop projects that integrate gender-equality designs into a range of operations, including transport, energy and urban infrastructure, he said. Third, it will focus on climate-change mitigation and adaptation around the region. Fourth, it will continue to support regional cooperation and integration. Based on ADB-led sub-regional cooperation platforms, the bank will further boost regional connectivity, promote regional public goods, help strengthen cooperation in the financial sector and rely on macro-prudential policies. In addition, it will encourage the sharing of knowledge in such areas as education and agriculture.
Fifth, the ADB will continue to expand its private-sector lending, equity investments and guarantees to reach a target of one-third of its total
operations by 2024. To that end, it will enter new markets while broadening its business reach to cover education, health and agrobusiness.
The ADB, founded in 1966, is owned by 68 member-countries, including 49 from the region, with Japan and the US being the two biggest shareholders with leadership roles. Geopolitically, China, which is also an ADB shareholder, has stepped into the global development agenda with a separate scheme called the Belt and Road Initiative (BRI), which has gained some momentum in recent years.
At the latest Beijing summit of BRI leaders late last month, more than 40 Asian and European countries including Thailand were represented, signalling the progress of China-led efforts to offer alternative development assistance. Chinese President Xi Jinping said US$64 billion worth of BRI agreements were signed during the gathering.
Despite criticism over a perceived lack of transparency, limited governance and other standards, as well as what’s been termed “debt-trap diplomacy”, the BRI has earned support in several countries. Proponents view the BRI as an alternative development path that could serve both the needs of the host countries as well as commercial interests of Chinese companies involved in infrastructure construction and related work.
While the BRI programme is certainly tied to China’s geopolitical and economic ambitions both domestic and international, it covers thousands of small and large projects in many countries that have turned out to be successes. In this context, the BRI could offset its failures by learning lessons from the older ADB development platform and in the end integrate the strengths of both into a global effort that serves populations better.