15th Informal Meeting of the South Asian Association for Regional Cooperation (SAARC) Finance Ministers - Shixin Chen

Speech | 16 September 2020

Speech by Shixin Chen, ADB Vice President (Operations 1) at the 15th Informal Meeting of the South Asian Association for Regional Cooperation (SAARC) Finance Ministers, 16 September 2020

Thank you, Mr. Chair. Honorable Ministers; Heads of delegations; Secretary General of SAARC; Ladies and gentlemen. 

I’d like to thank the Government of Nepal for serving as Chair of SAARC in the last several years, and the SAARC Secretariat for organizing this meeting with ADB. Let me also thank the Ministers and heads of delegations for attending this important virtual gathering.

Taking this opportunity, let me strongly commend all SAARC member countries’ remarkable achievements in economic development. From 2013 to 2019, average growth in South Asian countries stood at more than 6% per annum, which made South Asia the fastest growth region in the world. In particular, a swath of people has been lifted out of poverty. 

ADB has been privileged to partner with SAARC in promoting regional cooperation in South Asia since the signing of our MOU more than 16 years ago.In 2019, ADB committed almost $9.3 billion in sovereign and nonsovereign financing to SAARC countries, representing nearly 43% of ADB’s total commitments. In most SAARC countries, project implementation performance, as measured by contract awards and disbursements, was better than the ADB-wide average.

As we face this once-in-a-century pandemic, ADB responded swiftly to support our developing member countries. Soon after WHO declared the outbreak of COVID-19 a pandemic on March 11,  ADB announced a $20 billion response package, focusing on health, social protection and economic recovery. Total funding commitments to SAARC countries in 2020 is expected to reach $11.7 billion, of which $5.2 billion will be for COVID-19 response.

ADB continues to actively support regional cooperation programs, benefiting SAARC countries through South Asia Subregional Economic Cooperation Program (SASEC) and Central Asia Regional Economic Cooperation Program (CAREC). Under SASEC, the program’s priority action plan for the next three years has been developed. Under CAREC, strategies and implementation plans for health, tourism, information, and digital technologies have been added and are under preparation.

In 2020, the South Asia region's impressive growth trajectory has been severely disrupted by the COVID-19 pandemic.GDP in the region is projected to contract by 6.8%.  My colleague ADB’s Chief Economist, Yasuyuki Sawada-san will share his latest findings to this meeting.

To further cope with the impacts of the pandemic, prepare for the “new normal”, and determine a path to a faster recovery, I’d like to highlight several key areas for revitalizing our economies.

First, health.We are pleased to note that as part of the SAARC program, member countries are exchanging information and data on health surveillance, sharing research results, and developing online learning platforms for medical front liners. In the medium term, SAARC countries could coordinate health policies to ensure minimum health standards and promote safe cross-border travel for migrants and tourists. Over the longer term, there is a need to invest more in public health systems and put in place universal health coverage.

Second, social protection. Beyond providing emergency cash transfers, social protection measures should include strengthening system outreach and efficiency. SAARC countries can benefit from knowledge sharing of best practices, which will entail establishing robust digital platforms for registering vulnerable people, creating disaggregated databases, sound monitoring, and strong budget support.

Third, the global supply chain. It is critical for SAARC countries to pursue effective trade facilitation, seize more opportunities for FDI, and to integrate micro, small and medium-sized enterprises (MSMEs) into the global value chain. SAARC countries should also develop high-quality multi-modal transport infrastructure, and establish stronger trade and supply chain financing mechanisms.

Fourth, digital technology. Digital technology is changing people's behaviors and social norms, contains significant economic opportunity in the future. The economies of SAARC countries will benefit tremendously in strengthening digital networks in various areas, namely, health surveillance, immigration and custom protocols, food safety and security, and e-commerce, among others.

In addition, it is also worthwhile to highlight the role of the private sector in the economic recovery. We are pleased to note that the environment for doing business in SAARC countries has improved significantly over the past years. In the future, it is also vital for the governments to continue this effort in fostering a more competitive environment for the private sector. Comprehensive structural reforms would be necessary.

In conclusion, enhancing collaboration in a post COVID-19 world could be a daunting task for SAARC countries.Through our collective actions under the SAARC framework, I am hopeful that South Asia will regain its status as the fastest growing region in Asia. ADB is strongly committed to support SAARC countries on your journey toward economic recovery and inclusive growth.

I look forward to a successful meeting. Thank you.