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p. 4 of 14 BACK | NEXT Preface Emerging Asia: Challenges to Development Regional Development Challenges The Global Context ADB’s Response to the Region’s Challenges The Strategic Agenda Implementing the Strategy Resources for the Strategy Next Steps

The Long-term Strategic Framework of The Asian Development Bank (2001-2015) : Emerging Asia: Challenges to Development

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The Global Context

Globalization. The Asia and Pacific region’s development will be greatly influenced by global forces and trends. The term globalization has been used to describe many of the recent changes with which the world economy is now coping: the emergence of an increasingly integrated world, expanding trade and investment flows, mobile capital, a changing structure of global production, an increasingly open policy environment, the spread of market forces, and the central role of information and communications technology. These forces are reshaping relations among countries, regions, and social groups, and changing the nature of the development process itself. Globalization creates new opportunities for developing countries, but also involves risks that must be overcome. The information revolution, which provides an example of the opportunities of globalization, is also an example of its risks: globalization can divide as well as integrate.

Capital Flows. The globalization of capital flows has changed the composition of net long-term resource flows to developing economies. Private capital flows have dramatically expanded; accompanying this shift has been a change in the intellectual and institutional foundations of development, emphasizing the central role of markets and the private sector in the development process. The expanding role of private capital and markets has changed the role of government increasingly from that of a provider of goods and services to that of a regulator. Moreover, where market forces result in overly skewed, market-determined distributions of income and wealth, governments can help strike a balance between such forces and social cohesion. Therefore, the role of official finance in development, especially for poverty reduction, continues to be essential in order to supplement private capital.

Commitment to Policy and Institutional Reform. Clearly, strong country “ownership” of policy and institutional reform is essential for development and poverty reduction; a wide range of stakeholders, especially the intended beneficiaries, can and must contribute to the development process; and such participation changes the role and responsibilities of government—in particular, with respect to civil society.

The Aid Environment. The global environment of multilateral development banks (MDBs) has in the past few years been much more competitive, as overseas development assistance (ODA) resources have been shrinking. At the same time, MDBs are being asked to expand their roles and agendas, both to fill the aid gap and to respond through their operations to a widening range of issues in social development, environmental conservation, and governance. Cooperation is thus increasingly important to ensure the efficient and effective use of resources to support the development process and bring about the desired outcomes. Such cooperation must include all participants in the development process: aid agencies, international financial institutions, civil society, nongovernment organizations (NGOs), the private sector, and all levels of government.

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