MANILA, PHILIPPINES - A report by an independent panel of eminent persons projects that by 2020, Asia will be dramatically transformed into a region that has largely conquered extreme poverty, with 90 percent of the continent's people living in "middle income" countries, and with a regional economy comprising 45 percent of global GDP and 35 percent of world trade.
The panel, chaired by Mr. Supachai Panitchpakdi, Secretary General of the UN Conference on Trade and Development, was established to advise the President of ADB on trends and challenges facing the Asia Pacific region, and to inform the Bank's long-term direction.
The panel is also comprised of Ms. Isher Ahluwalia, Chairperson, Indian Council for Research on International Economic Relations; Mr. Nobuyuki Idei, Chief Corporate Advisor, Sony Corporation; Mr. Caio Koch-Weser, Vice Chairman, Deutsche Bank Group; Mr. Justin Yifu Lin, Professor and Director of the China Center for Economic Research, Peking University; and Mr. Lawrence Summers, Charles W. Eliot University Professor, John F. Kennedy School of Government, Harvard University.
The panel's report sets forth a new paradigm for development banking in Asia that moves beyond the traditional model emphasizing transfers of external aid resources. The report sees ADB as the institution of choice to continue delivering development assistance to the region.
"To effectively carry out its new role in a rapidly changing Asia, ADB must radically change itself, and adopt new models of development banking that allow it to be responsive to the region's evolving needs between now and 2020," said Mr. Supachai.
The report says the "New ADB" must be more focused, and driven by three strategic directions: from fighting extensive poverty to supporting higher and more inclusive growth; from economic growth to environmentally sustainable growth; and from a primarily national focus to a regional and ultimately global focus.
To achieve this, the report says the "New ADB" must realign operations and focus its work on six core areas:
- infrastructure development, with an emphasis on public-private partnerships
- financial sector development that supports the growth of regional financial markets
- energy and environment activities focusing on global issues, such as climate change
- regional integration, which would be central to all of the Bank's operational activities
- technological development and innovation
- knowledge management, with the Bank serving as a platform for knowledge sharing
Under this new paradigm, the ADB's work would significantly differ from its main areas of activity in the past.
The report suggests that as ADB embarks on this transition, it should continue to focus on poverty alleviation in low-income and fragile economies, begin to address new challenges in countries expected to become middle-income, and strengthen its internal capabilities in its core activity areas.
The report envisages a more nimble, flexible and decentralized ADB, with clusters of technical staff housed in regional hubs in major Asian business and academic centers, which the report says is an essential step for attracting world-class talent consistent with the new agenda.
On receiving the report, ADB President Haruhiko Kuroda expressed his appreciation to the EPG members and said, "The panel's report is both thoughtful and thought-provoking, and provides us with invaluable insights that will help chart the future course for ADB."