Regional Cooperation and Integration in Asia and the Pacific

Speech | 20 February 2009

Keynote speech by Rajat M. Nag, ADB Managing Director General, at the archipelagic Southeast Asia (aSEA)-Pacific Subregional Cooperation Programs Indonesia-Papua New Guinea, Indonesia-Timor Leste Senior Officials Meetings, Manila, Philippines

Distinguished guests, ladies and gentlemen.

I am honored to be here with you today to speak about regional cooperation and integration in Asia and the Pacific, and especially as it relates to Indonesia, Papua New Guinea and Timor Leste. The meetings today and yesterday mark a unique occasion in the history of the Asian Development Bank as we mark the start of two new cross-border, regional cooperation initiatives. ADB is proud of its track record of supporting regional and subregional cooperation programs, and we believe that the new programs that you have been discussing these last two days are unique, and present an important opportunity to advance development in remote regions.

In my address today, I would like to briefly discuss some of the other regional cooperation initiatives that ADB supports, and what lessons to draw, focusing especially on the question of why communities and countries should cooperate, and finally discuss some of the opportunities that I see for your programs going forward.

No discussion of regional cooperation in the Asia-Pacific region is complete without mentioning the Greater Mekong Subregion or GMS program. Started in 1993 among the 6 countries bordering the Mekong River, the program has been very successful because it has been project based. From the very start, countries worked together on very concrete projects, leading to buy-in from all concerned. The initial focus of the GMS was on connectivity; improving cross-border links in transport, power and telecommunications. ADB has coordinated approximately $10 billion of investment in the GMS, largely in these areas. And it is this experience that has taught us that one of the key success factors of regional cooperation is a focus on connectivity, and on actual results on the ground.

Another program that we are supporting is the South Asian Association for Regional Cooperation, or SAARC, which has focused mainly in agriculture, rural development, and health. More recently, SAARC is delving into broader integration issues such as cross-border infrastructure and services, free trade agreements, financial and monetary cooperation, and regional public goods. The Central Asia Regional Cooperation Program, or CAREC, organized in 1997, promotes shared infrastructure projects and is working on improving the region's policy environment in priority areas-including transport, energy, trade policy, and trade facilitation. Here again, early success reflected project investment in transportation.

In the Pacific, there has been substantial progress in regional initiatives that aim to improve regional connectivity and promote capacity sharing. ADB has been a strong supporter of the Pacific Plan, which provides a blue print for regional cooperation in the Pacific. Our efforts have included support for establishing the Pacific Aviation Safety Office, along with a regional initiative aimed at sharing and building capacity amongst Pacific audit institutions. We are currently designing activities that will support enhanced ICT connectivity, in partnership with University of the South Pacific and the Secretariat of the Pacific Community. We are also progressing regional initiatives in support of renewable energy, financial management, and importantly in assisting countries deal with the impact of the global financial crisis.

Our experience, and our continued support for these programs, is reflected in ADB's Regional Cooperation and Integration (RCI) Strategy that aims at improving the quality of our lending and non-lending services, and strengthens support for trade, investment, monetary, and financial integration. The RCI Strategy is a coherent and strategically-focused approach covering four essential "pillars":

  • Physical connectivity - the bedrock of regional and subregional initiatives-to enhance cross-border infrastructure and the related services that ease the movement of goods and people;
  • Cross-border trade and investment - to link fragmented national markets for goods, services, and capital;
  • Monetary and financial cooperation - enhancing support for regional systemic reform, opening new avenues for finance via bond market development, and promoting East Asian exchange rate stability; and
  • Regional public goods - to improve environmental, health, and social conditions, for example, through the prevention of environmental degradation and communicable diseases, or promotion of energy security.

In all of these programs, we try never to lose sight of the essential issue of why communities and countries cooperate in cross-border programs: through cooperation countries can improve the opportunities for livelihoods and quality of life for their people and the competitiveness of their firms. The fact that you are here this week, at the invitation of ADB, shows that you have recognized this. And I hope that you will come away from these meetings with a strong and positive feeling that regional cooperation in your border regions will have very positive and definitive economic and welfare benefits.

This initiating meeting has brought together government officials from the central and subnational governments concerned. I strongly believe that to be successful in the longer run, this type of cooperation will need to involve local communities as well as other potential partners, including NGOs, private sector and other development partners. As we move forward, and aim at getting actual activities going on the ground, we may want to consider how to involve other partners to ensure successful and lasting cooperation.

As we all learn to work together effectively in the border regions of both islands, we will also encounter some of the potentially negative impacts of opening up borders. Here, important lessons can be drawn from the GMS Program. When ADB started to finance roads between countries, and started to support efforts to make crossing the borders easier for both goods and people, much concern was expressed by local communities and NGOs about the potentially negative aspects such as smuggling of timber and the trafficking of people and illicit goods. Our response has been to recognize such dangers, and to work with those concerned to find solutions. It is not always easy, but it has had some success. I know that similar concerns exist in the border regions under discussion. I would like to encourage you to work to find solutions. Moving forward will take facing some difficult problems, but the solutions will yield large benefits to your people.

With these few words, I would like to express our gratitude to all the delegates who have come together in Manila this week. Some of you have had a long journey, a good example of the need to improve connectivity in our region. I personally wish you a successful completion of the meetings this afternoon, and look forward to hearing about the decisions you may make today about the next steps. ADB stands ready to help you in this endeavor.

Thank you.