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Public-Private Partnerships for Nutrition and Human Development: the Asian Development Bank’s Perspective

This meeting is compelling beyond description because we are addressing why enormous human potential is being lost when clear solutions are readily available. As development specialists, business leaders, and investment planners, we cannot justify the loss of life and the chronic disabilities of mind and body that micronutrient deficiencies impose on most nations in Asia and the Pacific. Others will detail the nature of this crisis for us, so that we can return to our places of work with a deep commitment to change the situation for the better. My role is to look squarely at the problem and start to see the way forward, with your help and insights.

As I look out at this distinguished assembly of leaders in the food industry and the public health service from the region and beyond, I am struck by the thought that the Manila Forum could be the beginning of the solution to a chronic nutrition problem associated with poverty. The region accounts for three quarters of the world's malnutrition problem. Asia is the Big Show. If we solve it here, the world will literally be a different place.

Malnutrition holds back economic development in a major way, and that is inexcusable in a recovering region that is anxious to rejoin the world's leaders in sustained growth. In an era driven by knowledge rather that muscle, the region will either be capable of orchestrating a new architecture of learning or simply fall behind the world's leaders. The Asian children of the millennium can be full of potential for life-long learning and productivity, but not if they are afflicted with what we call "hidden hunger". By the end of this Forum, I think the problems will be clearer to us, and so will the potential solutions.

I appreciate the high cost to each of you in leaving your leadership role back home to join us for three days. But you have come because you sense that Asian and Pacific countries must work together to become a global manufacturing and trading force in the food industry. I also suspect that you are idealistic competitors, eager to be successful and serve the public good at the same time. I know you share our hope that a collective vision will emerge from this Forum that will guide our actions as a region in the future.

The Asian Development Bank (ADB) has recast its mandate to reflect what we call the twin pillars of sustained development: poverty reduction and catalytic support to the private sector. The old adage that wealth can buy health has a more profound flip side: health makes wealth when human capital is enriched at minimal cost. I am obviously not a nutrition specialist, but the social and economic benefits of eliminating micronutrient deficiencies far outweigh the public and private investment costs. Lives, intact mental faculties, and earning capacity for the poor lie in the balance. So let's see if we can answer these four questions to our satisfaction:

What We Know

We know that the public and private sectors must work together or the problem will not be solved. This meeting will build upon successful partnerships and the lessons learned that can be applied regionally. The stunning success story of iodized salt's movement throughout Asia in the 1990s needs to be understood and replicated with other widely consumed staples.

We know that the solution to eliminating iodine, iron, and vitamin A deficiencies is primarily a challenge for industrial policy, not health policy in the narrow sense. The private sector has been the vehicle for improving the quality of widely consumed foods in the industrialized countries, with the public sector creating a fair and transparent regulatory frame. Unless there is an enabling environment for the private sector to improve dietary quality through market-based solutions, the problem will persist and place a chronic drag on economic growth. The key is to create an environment in which private companies can see the economic potential of food fortification programs and capture some of the vast benefits their participation helps create.

Lastly, we know that we have to change the pattern of discourse in the region. Lack of transparency is injurious to business confidence, inimical to trade prospects, and unlikely to strengthen Asian leadership in the food industry. The Forum is the first step forward.

The strategic advantages of fortification are irresistible, despite widespread inertia.

Fortification does all of the following:

There is also a moral issue. At the World Summit for Children (1990) all the governments in the region proclaimed that most micronutrient deficiencies would be eliminated by 2000, and that is still far from happening. When Dr. Hill of UNICEF informs us that nutrition security should be based on fundamental human rights, he touches a chord in us all.

What We Need To Know

Four issues that need addressing come to mind.

First, we need to discuss candidly with each other what the obstacles are to moving properly fortified products forward in the region. As you know, this kind of discussion is often avoided. Aside from salt, Asia has fallen behind Latin America and the Caribbean in fortifying staple foods, and "Produced in Asia" lacks resonance with the international business community. Whether it's lack of knowledge or lack of trust, Dr. Maberly's notion of "sharing risk and reward" is important.

Second, we need to explore ways to create a regional "learning laboratory" for the exchange of information, results of research, and transfer of technology concerns so that today's cutting-edge options will be adopted quickly and consistently within the food industry. This will strengthen the competitiveness of fortified foods within and between countries.

Third, we need to involve the consumer and women's movements in our dialogue so that we know that we are responding to people's felt needs. The educated and informed Asian woman is the key decision maker who will determine the physical and intellectual development of children, and without her involvement in the transition to fortified foods, industry will simply continue to produce high-value food vehicles in small quantities for the middle class. The poor would then be priced out of the "dietary revolution". The positive slant is that the public sector can help create demand among the poor using social marketing techniques perfected by industry.

Fourth, we need to look closely at the problems faced by governments in creating and administering regulatory environments favorable to fortification, particularly what is feasible in the poorer countries where governments' capacity to deliver is strictly limited. The international framework is equally important. What do the codes of international business practice and the new rules of trade under the WTO mean to the food producer and consumer in today's global marketplace? How can we harness the global information revolution? How can we make sure the same standards apply to exported foods as apply to food produced for the domestic market?

The expertise is in this room to address all these issues, and we will leave wiser for the opportunity to share that expertise with one another.

The Way Forward

What is urgently needed is to identify a set of priority actions and initiate a continuous dialogue between the various sectors in order to move quickly toward the implementation of schemes that will permanently eliminate malnutrition. Specifically, a multisectoral partnership needs to be built among industry, national governments, international agencies, expert groups, and other players. Partners need to work closely on specific issues relating to technology development, food processing and marketing, free-market approaches with minimum price-support mechanisms, standards, quality assurance, product certification, social communications, and demand creation, monitoring, and evaluation. Guidelines on these issues should then gain acceptance and be implemented at the country level. A multisectoral group within each country should define a feasible affordable strategy designed for the target population, identify opportunities for the involvement of the food industry, and assist in promotional and educational efforts to reach the target population.

This coalition will benefit private-sector partners, not just as a lever to improve performance in the marketplace, but also to show that the private sector has social as well as economic interests. It will benefit the government, which has a mandate to improve the lives of people. And it will allow national and international development agencies to provide technical support and seed investment in an efficient way.

This coalition should help government to better understand how to engage the private sector. To build an environment in which food producers with good products, consistent quality, and honest packaging can build brand image, market share, and public recognition. Also, in the same environment, poor products, misleading labeling, and bad business practices must be properly exposed.

The basic challenge is to bridge the communications gap between the public and private sectors in understanding their needs and respective roles and responsibilities. While constraints and shortcomings do exist, there is no need to delay immediate action. We expect that the Forum will produce a consensus statement on a regional action plan.

ADB's Role

As a regional financial institution, ADB sees fortification as a win-win situation for governments, producers, and consumers, and a good example of how human development and economic growth are mutually reinforcing. Here are four possible roles that ADB can fulfill in moving the fortification agenda forward on a regional level.

1. Prepare a regional feasibility study through technical assistance support to some of the governments participating in the Forum. ADB will seek your wisdom on the scope of this regional study, which will look at both the needs of the public and private sectors in the region. The study, when completed in 2001, will form the basis for discussion on priorities for investment.
2. Mobilize resources and possibly provide loans. ADB will hold a regional investors' roundtable based on the regional feasibility study, and will seriously consider its role in meeting financing gaps within individual countries. There are many possibilities that we can discuss during the course of the Forum. ADB's role can certainly include lending to the public sector to help create the regulatory environment, raise public awareness, and support research. For example, multicountry lending for a core "menu of options", such as quality assurance laboratories for the public health service for the salt and flour industries. Central Asia might be a good example where both industrial and regulatory practices can be upgraded and the trade environment modernized with the application of WTO notions of discipline. ADB may also assist in funding private companies on a commercial basis to help them meet demand for fortified products and attain higher quality standards. ADB would seek to play a catalytic role, to help mobilize private capital, and would only participate when the right environment has been created for profitable private-sector participation. We might work through financing vehicles suitable for reaching small and medium agribusiness, for example an equity investment fund. Some linkage between public- and private-sector lending may also be possible in order to build sustained public-private partnerships.
3. Engagement with the international philanthropic foundation network for sustained poverty reduction in Asia and the Pacific. The recent beneficence of the Gates Foundation to support the Asian Vaccine Initiative inspires us to look for broader partnerships than the usual donor community, and ADB would be happy to assist this dialogue.
4. Agricultural research and extension for micronutrient-dense staples (rice in particular) is an area that ADB intends to support. The potential for broad agro-industrial partnerships for elimination of malnutrition is in its infancy, but ADB may be a useful broker at the regional level.
5. Joining hands with the United Nations community. ADB considers that this is important in order to ensure that dialogue on governance and rights-based programs are complementary. Perhaps our UNICEF and WHO colleagues would like to expand on the possibilities.

The Asia-Pacific region is on the verge of a second green revolution that will focus on dietary quality for the poor and others. The private sector will lead the way, and ADB will do what it can to support them.