Keynote speech by ADB Vice-President Stephen Groff at the Harvard Project for Asian and International Relations (HPAIR) 2015 Asia Conference held 24 August 2015 in Manila, Philippines. The conference theme is Confronting Asia's Development Challenge through Innovation.
Magandang gabi po sa inyong lahat. It is my honor to be here today at the HPAIR 2015 Asia Conference. On behalf of the Asian Development Bank, I would like to commend De La Salle and Harvard for organizing this important event on Asia and the Pacific’s development challenges.
It is truly impressive to see such a large gathering of bright young minds here tonight. Your collective presence is a remarkable display of youth leadership. Based on your discussions over the past four days, I have every confidence that you will continue to pursue cooperative and constructive approaches to our region’s development challenges – particularly those related to sustainable and inclusive growth.
The Asia and Pacific region has grown remarkably over the past 50 years, gaining global admiration for its achievements. Poverty has declined dramatically and the region’s share of global GDP has risen sharply. It is not inconceivable that Asia and the Pacific’s share of world GDP could surpass 50% by the middle of the century.
Yet, against these gains, the region also faces daunting development challenges such as climate-induced natural disasters, intense competition for natural resources, and growing inequality. Most strikingly, 1.4 billion people in the region still live on less than $2 per day.
The international community is expected to set the post-2015 development agenda in September through the adoption of the 2030 Agenda for Sustainable Development. Included in it will be 17 Sustainable Development Goals (SDGs) and 169 targets that build on the Millennium Development Goals and advance that which has not yet been achieved. More than ever, we need improved and innovative approaches to addressing persistent development challenges such as high maternal mortality, while tackling new ones such as rapid urbanization, and the depletion of critical natural resources like water.
ADB welcomes the far higher ambition of this new universal development agenda – and is at the forefront of transforming approaches to development. We have recently merged our concessional and market-based funding in order to leverage more development financing for our member countries; particularly small Pacific Islands (countries) and more vulnerable economies. This is a first among the multilateral development banks. We are promoting continuous performance improvement and are increasingly providing funding for development results actually delivered such as in education or infrastructure. In addition, we are actively supporting government and private sector-led solutions to development with innovative service delivery models. Going forward, I see three challenges which your generation will need to tackle. Allow me to touch on each of these briefly.
First, financing the post-2015 development agenda will require trillions of dollars in development resources. In the case of Asia and the Pacific, the cost is estimated to be around $1 trillion a year. While it is imperative that we make every dollar count, the good news is that financing our region’s development needs will not require finding new sources of funding. Instead, it can be done by leveraging public and private resources already available and using them effectively. While fiscal revenues remain an important source of development finance, the largest sums are in fact in private hands. Potential sources of financing development include over $6.2 trillion in regional savings, much of which today are invested outside Asia and the Pacific. Other sources like pension and sovereign wealth funds also hold enormous potential with $3.5 trillion in assets. So our first challenge is to re-direct these resources toward the region’s development needs.
Second, human-induced climate change is threatening the development and security of Asia and the Pacific. More than 4 billion of the world’s 7.3 billion people now live in Asia. Our rising population and expanding demands have strained the the region's resources, and the negative impacts are now evident in rising sea levels and increasingly devastating storms, droughts, and floods, which reduce whatever assets the poor have, and render them even more vulnerable. Combined with other strains on the environment, these forces risk reversing hard- won development gains. Promoting the sustainable use of resources by improving efficiency, reducing demand, regenerating resources, and voicing concern for ethical practices by consumers, businesses, and government is our second challenge.
Third, given the interrelatedness of development challenges, regional cooperation and integration will become even more critical in the years ahead, not only for economic development but for promoting peace and stability. The Greater Mekong Subregion (GMS) is an excellent example of how adversity can be turned into mutual advantage. Cooperation between the GMS countries has helped narrow development gaps through trade integration, intraregional supply chains, and stronger financial links. In a sign of strong cooperation, leaders of the six GMS countries recently agreed to promote trade, tourism, industrial development, and other economic activities along their borders by encouraging “economic corridors”. We hope the resulting development of new special economic zones, support for e-commerce, and other activities will have a transformative impact for businesses and communities in every GMS country. Ensuring regional harmony, peace, and stability is our third challenge.
To conclude, Asia and the Pacific is in the midst of a massive social and economic transformation. How it navigates development pathways, and how it identifies the right kind of development-oriented investment, will impact not just the region but the entire globe. As leading students and young professionals, your support and partnership is critical in effectively addressing the region's development challenges and achieving sustainable and inclusive growth for all in Asia and the Pacific. Congratulations on a most successful conference.
Thank you.