Opening Remarks by
President Tadao Chino
Asian Development Bank

at The Governors' Forum on Investing in Infrastructure for Poverty Reduction

15 May 2004
ICC Jeju, Republic of Korea

Governor Shaukat Aziz, Alternate Governor Li Yong, Distinguished Guests, Ladies and Gentlemen,

I would like to join Vice-President Jin in welcoming all of you to this important public policy forum. This is the first such open forum, at which members of the Board of Governors have been invited to share their views and insights on topics of vital importance to the future development of Asia and the Pacific. On behalf of the Asian Development Bank's Board of Directors, Management, and Staff, I wish to express our sincere appreciation to the Governors and Alternate Governors participating in this Forum this afternoon.

In the past four decades, the Asia and Pacific region has seen remarkable social and economic development. Per capita incomes have risen considerably. Today, people are healthier, better educated, and live longer than previous generations. The driving force behind much of this positive change has been strong and inclusive growth. I emphasize the significance of inclusive growth because I believe that it will continue to be the fundamental driving force for the region to strive for sustainable poverty reduction.

Today's Forum will examine the role of infrastructure in this process. I am looking forward to hearing views of distinguished speakers and participants on this important issue. By way of introduction, I would first like to emphasize that infrastructure is critical for growth.

Infrastructure underpins connectivity. By linking different parts of a national economy together, and by integrating different economies into the regional and global economies, infrastructure expands markets. Market expansion, in turn, creates new opportunities for increasing the scale and scope of economic activities.

Efficient infrastructure networks also reduce transaction costs and facilitate the exchange of goods and services. With improved access to markets, information, and other services, infrastructure also contributes to higher productivity and enhances the mobility of factors of production.

As there are significant forces at work in this region, infrastructure development must play an even greater role in ensuring inclusive growth in the future. Let me offer a couple of illustrations.

Globalization and growing regional economic integration are extending the frontier of growth, by offering larger markets, new technologies, and growing sources of foreign direct investment (FDI). In order to benefit from the expansion of markets and trade, national infrastructure systems must be connected through global and regional links. Experiences across the region also show that FDI and new technologies are most likely to bypass countries with inadequate infrastructure and poor investment climates.

Infrastructure development offers the foundation on which a country can seize and capitalize on the opportunities ushered in by globalization and regional integration. Turning to domestic economies, the lack of access to product and factor markets leaves many people and areas bypassed by the development process. Indeed, in a number of economies in developing Asia, we see growing economic disparities among different districts and sectors within individual countries.

Moreover, many studies confirm that infrastructure development contributes to inclusive growth. For those living in poverty, improved access to education and health services can be vastly improved through better infrastructure such as roads, electricity, communications, water supply, and sanitation services.

For example, with better roads and access to water, girls are freed from the drudgery of fetching water for hours each day, making school a realistic option. Similarly, improved health in rural areas is crucially dependent on the availability of safe drinking water, sanitation, and access to transport. Such examples reemphasize the vital role of infrastructure in achieving many of the Millennium Development Goals.

Ladies and Gentlemen, these are just a few illustrations of the critical importance of infrastructure to ensuring inclusive growth. As ADB works to strengthen its effectiveness as a development partner, we must broaden and deepen our understanding of the linkages among infrastructure, inclusive growth, and sustainable poverty reduction.

In this regard, I am sure that we will be able to gain some significant insights from your active participation in today's Governors' Forum.

I would like to thank all of you for contributing your time, knowledge and experience to this important event. I hope that it will offer guidance in further enhancing of our efforts to achieve inclusive growth and sustainable poverty reduction in Asia and the Pacific.

Thank you.