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ADB President Stresses Importance of Human Resources in Asia's Development

The development of human resources is of vital importance for Asia's developing countries, yet insufficient funds are often allocated for such resources, Mr. Mitsuo Sato, President of the Asian Development Bank said today.

In an opening address at an "International Conference on Financing Human Resource Development in Advanced Economies" held at the Bank's headquarters in Manila, Mr. Sato said that the growing emphasis on human development in the operations of the Asian Development Bank reflects an emerging consensus within the development community about the role of education and health in the development process. The modern theory of growth lays great emphasis on the role of human capital accumulation. This new paradigm has been described as "human development led growth."

"Education and health must be seen as ends in themselves, fundamental rights which must be ensured to all people," Mr. Sato said. "This was one of the important messages which came out of the Social Summit at Copenhagen earlier this year."

Mr. Sato observed that there is nevertheless an important trade-off between the needs of human development and alternative claims on available resources. This is a particularly serious constraint on many of Asia's developing countries.

"Enough resources are not allocated for services like education and health," Sato said. "Yet it is difficult to allocate more when budgets are already strained and deficits need to be reduced. Resources are not unlimited in supply. They must be efficiently and appropriately allocated between the development of physical capital and the development of human capital. This is essential in order to maintain a healthy pace of growth, which is the ultimate long term solution for the alleviation of poverty.

For a period of over 30 years, Mr. Sato said that some East Asian economies have maintained exceptionally high rates of growth, outperforming all the economies of the rest of the world. At the same time, their record in human development has been quite remarkable. One of the key factors which accounts for this high economic growth is the massive investment in human resource development.

Mr. Sato added that an equally important factor has been the very high levels of private spending on education in these societies. The share of private spending in total education in these economies is much higher than in the industrialized countries, even in the United States.

"It is this combined effort of the state and market which accounts for the capital development of human resources in the advanced Asian countries," he said. At the same time, the mobilization of private resources was not at the cost of equity. "The targeting of public social spending on primary education and primary health care has ensured access for all to basic education and health," he said.

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