ADB’s Work to Support Regional Cooperation in Asia and the Pacific
Regional cooperation and integration (RCI) is a process by which national economies become more interconnected regionally.
RCI plays a critical role in accelerating economic growth, reducing poverty and economic disparity, raising productivity and employment, and strengthening institutions. It narrows development gaps between ADB’s developing member countries (DMCs) by building closer trade integration, intraregional supply chains, and stronger financial links, enabling slow-moving economies to speed their own expansion. It is an important platform on which countries work together toward unlocking their vast economic potential, achieving sustained, rapid growth, and reducing poverty.
Regional Cooperation Policy
ADB adopted a regional cooperation policy (RCP) in 1994 that, for the first time, articulated ADB’s approach to promoting regional cooperation. The RCP thus fleshed out one of the key mandates of the Agreement Establishing the Asian Development Bank (the Charter): “The purpose of the Bank shall be to foster economic growth and cooperation in the region… and contribute to the acceleration of the process of economic development of the developing countries in the region, collectively and individually.”
Changing global and regional economic landscapes since then have highlighted several limitations to ADB’s earlier support for RCI, such as, fragmented efforts across departments and offices, varied quality of lending and non-lending services for RCI due to the absence of a coherent strategy, and limited support for trade and investment integration, especially in view of the recent proliferation of free trade agreements in the region.
Countries in Asia and the Pacific are growing at different rates and have differing social and economic priorities. Although there has been progress in regional cooperation and integration, more is needed to better link national with regional priorities so countries may fully benefit from each other’s strengths and overcome mutual problems.
The Office of Regional Economic Integration (OREI) was created in April 2005 to support ADB’s work in regional cooperation and integration (RCI). With the establishment of a new Economic Research and Regional Cooperation Department (ERCD) on 1 January 2015, research and operations support for RCI (except for support to the ASEAN+3 Asian Bond Markets Initiative) now rests with ERCD.
ADB adopted an RCI strategy in July 2006 to support ADB's overarching goal of poverty reduction through regional collective actions, emphasizing ADB's active role as catalyst, coordinator, and knowledge leader of RCI in Asia and the Pacific.
The RCI Strategy is anchored on four pillars:
- Regional and Subregional Economic Cooperation Programs on Cross-border Infrastructure and Related Software - physical connectivity through regional and subregional infrastructure complemented by harmonized regulations, procedures, and standards that will facilitate cross-border trade.
- Trade and Investment Cooperation and Integration - elimination of trade and investment barriers through improvement of the transparency, efficiency, and procedural uniformity of cross-border transportation of goods and services.
- Monetary and Financial Cooperation and Integration - ensuring economic and financial stability through establishment of regional financial mechanisms
- Cooperation in Regional Public Goods - promotion of regional public goods (RPG) through coordinated actions to supply RPGs, such as clean air, control of communicable diseases, and management of natural disasters.
In 2007, ADB established the Regional Cooperation and Integration Fund (RCIF) and the RCI Trust Funds under the Regional Cooperation and Integration Financing Partnership Facility. The facility helps pool and provide financial and knowledge resources to support RCI.
Under Strategy 2020, ADB will scale up its support for RCI, increasing volume of operations and the share of RCI in total operations. ADB is committed to achieving sustained and equitable development, improving the quality of life, and eradicating poverty with the aim of contributing most effectively to the harmonious growth of the region in keeping with the Charter.
Four roles have been designated for ADB to fulfill under Strategy 2020:
- Increasing financial resources for RCI projects, programs, and related technical assistance (TA), and/or helping DMCs mobilize funding and TA
- Expanding the creation and dissemination of knowledge and information on RCI to DMCs
- Furthering its support to DMCs and regional bodies to build their institutional capacity to manage RCI
- Strengthening ADB’s role as a catalyst and coordinator of RCI for DMCs
RCI can play a key role in accelerating the region’s economic development and in fighting poverty. ADB’s assistance programs will coincide with the goals of Strategy 2020 in the years ahead: understanding where it can be most relevant and where it can have the most impact.