ARIC Website Launch
Opening Remarks
by
Masahiro Kawai
Asian Development Bank
2 October 2006
ADB Headquarters, Manila
Distinguished guests, ladies and gentlemen: Thank you for joining us today.
The Asia and Pacific region is at a moment of great opportunity. Not only are many countries in the region growing rapidly, they are collectively making substantial headway in the fight against poverty. Moreover, leaders across the region recognize the need to work together to sustain these important trends. Through greater regional cooperation and integration, countries can achieve economies of scale, build on each other’s comparative advantages, and bring all economies to higher levels of growth and development, which are so essential to poverty reduction.
Asia’s leaders have on many occasions expressed their vision of a thriving regional economy, well integrated within itself, and with other parts of the world. The website we are launching today – the online Asia Regional Integration Center, or ARIC – will provide a new tool for all of us to monitor the region’s progress in regional cooperation and integration, and understand its various ongoing and planned regional initiatives undertaken by the region’s governments and groups as well as by ADB.
As a regional development bank, ADB has an important mandate to promote regional cooperation and integration in Asia and the Pacific. It is within this broad context that ADB in 1994 adopted a regional cooperation policy that, for the first time, articulated its approach to promoting regional cooperation.
Of course, the global and regional economic landscapes have changed extensively since 1994. Globalization has been a powerful trend characterizing economic life. Intraregional trade has significantly increased in Asia. In East Asia for example, intraregional trade as a share of total trade grew from about 40% in the early 1990s to 55% in 2005. Improved physical connectivity, the spread of information and communication technologies, the rapid growth of large emerging market economies such as the People’s Republic of China and India, and the expansion of vertically integrated production networks now link Asian economies together much more closely than before. Free trade agreements are proliferating. And the initial conditions for greater regional integration have emerged in East Asia and beyond through ASEAN, ASEAN+3, East Asia Summit, SAARC, CAREC, Pacific Plan, and many other subregional frameworks.
Given these emerging trends and the vision of a more integrated Asia and Pacific, ADB has taken a fresh look at its regional cooperation and integration activities from a strategic perspective. Our new strategy for regional cooperation and integration, adopted in July 2006, aims to build cooperation and deepen integration in four focus areas: (1) regional and subregional programs for cross-border infrastructure and related software; (2) trade and investment cooperation and integration; (3) monetary and financial cooperation and integration; and (4) cooperation in regional public goods.
On infrastructure, our new best estimates are that Asia as a whole would need to invest some $3 trillion over the next ten years to keep up with the growing demand for national and cross-border infrastructure—including transport, telecommunications, energy, and water. At current investment rates, less than half of such demands will be met. Clearly, the infrastructure gap must be bridged quickly. The software aspect of infrastructure needs to be strengthened even more than ever, as this is vital to make physical infrastructure work effectively, particularly in a cross-border, multi-country context.
On the trade and investment front, given the recent stalling of the WTO Doha Development Round, it is vital for all member countries in Asia to continue their efforts to pursue further market opening and structural reforms so that they can benefit more from the world trading system. At the same time, given the proliferation of bilateral FTAs in the region, it is important to minimize the risk of “Asian noodle bowls” by coordinating on rules of origin, standards and various regulations and consolidating the overlapping FTAs into a single, Asia-wide best-practice FTA. This will ensure the expansion of Asia’s trade and investment within the region and with the rest of the world.
On monetary and financial issues, Asia needs to strengthen its national financial systems and its collective effort at promoting regional macroeconomic and financial stability. These include the financial authorities’ policy dialogue processes under ASEAN, ASEAN+3, APEC and ASEM, regional reserve pooling arrangements, and Asian bond market development initiatives. Asia needs to channel the large pool of regional savings for productive investment, including infrastructure and SME investment. Through this effort, Asia can also make a significant contribution to resolving global payments imbalances.
Finally, with the rising cross-border business activities and movements of people, efficient management of economic transactions, environment, and health has become vital. Regional cooperation in the provision of regional public goods, or in the prevention of regional public bads, in the form of containing the spread of environmental degradation, communicable diseases and various types of cross-border crimes is critical. ADB is ready to assist developing member countries in strengthening national and regional capacity to monitor and respond.
The aim of these four pillars is to reduce poverty in developing member countries through regional collective action that leads to greater physical connectivity; an expansion of trade and investment; development of financial systems and macroeconomic and financial stability; and improved environmental, health, and social conditions.
While Asian countries themselves must take the lead on such matters, ADB can provide financial resources, help developing member countries build their institutional capabilities through technical assistance for regional and subregional cooperation projects, act as a catalyst and coordinator for regional cooperation and integration, and create and disseminate knowledge and information to support national and regional efforts. This is where the ARIC website comes in – a website that gathers in one place the latest available knowledge, information, and ideas on this important subject. It is our sincere hope that governments, researchers, academics, businesses, commentators, journalists, and indeed all interested parties will find it a useful contribution in pursuit of a more integrated, poverty-free, prosperous and peaceful Asia and Pacific region.
We will provide you with more details on the types of information we have collected under these four pillars of regional cooperation and integration. I am sure you will be able to provide us with your views on other types of data to be collected and disseminated. I would like to thank the ARIC team for their hard work and dedication in getting the site prepared. Once again, thank you for joining us. I look forward to our Q&A interactions after the presentations.
Thank you.
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