Opening remarks by Masatsugu Asakawa, President, Asian Development Bank at the ADF 13 and TASF 7 Replenishment Meeting, 16 September 2020
Mr. Chair, ADF deputies and delegates, representatives of developing members, Board members, ladies and gentlemen,
It is my great pleasure to welcome you to this virtual pledging session for the ADF 13 and TASF 7 replenishment. I would like to thank Mr. Mike Callaghan for chairing this meeting and supporting the entire replenishment process.
ADB’s response to the COVID-19 pandemic
After almost one year of fruitful discussions, we are approaching the conclusion of the ADF 13 and TASF 7 negotiation. The world is in a very different place compared to a year ago. The coronavirus disease (COVID-19) pandemic is taking a devastating toll, in terms of human lives and health, and on jobs, growth, and economic and social progress. To help our developing members mitigate the adverse impact of the pandemic, we announced an ambitious $20 billion response package in April 2020. We also implemented several other measures to streamline ADB’s processes for faster and more flexible delivery of assistance.
As of mid September, we have committed about $11.2 billion toward COVID-19 related operations including $1.6 billion through ADF and concessional ordinary capital resources lending (COL).
About $8.2 billion of our assistance was provided through a quick disbursing and tailored budget support under a new financing modality called the COVID-19 Pandemic Response Option, or CPRO. This support is focusing on the poor and vulnerable, including women and children.
ADB’s COVID-19 response also includes emergency response loans, grants, and disaster-contingent financing totaling about $1.2 billion; and scaled up resources for knowledge solutions and technical assistance amounting to $145 million in grants and technical assistance.
ADB has committed $1.7 billion to the private sector in order to rejuvenate trade and supply chains, and provide enhanced microfinance and guarantees for liquidity-starved businesses, including those run by female entrepreneurs.
Working closely together with other development partners and the private sector, we have mobilized an additional $7.2 billion in cofinancing.
Today, we continue to direct all possible resources to help our developing member countries to fight the COVID-19 pandemic and have responded with speed and scale.
Challenges in ADF and COL countries
In ADF and COL countries, the pandemic is having even more severe impacts through numerous channels. These countries find it extremely difficult to prevent and handle the pandemic due to their limited capacity in health care systems. We are also seeing sharp declines in consumption, a collapse in cross-border tourism and remittances, disruptions to supply chains, and a large contraction in trade and investment. These, combined together, have catastrophic and lasting negative impacts on ADF and COL countries, and many of them are SIDSs (Small Island Developing States) and FCAS (Fragile and Conflict Affected Situations). All of this is impacting the most vulnerable segments of populations, including women and children, and is exacerbating existing economic challenges such as debt sustainability.
Overall, years of gains in poverty reduction are at stake. Inequalities are increasing. Progress against the Sustainable Development Goals (SDGs) is also likely to be set back.
Strong relevance of ADF 13 in the COVID-19 response and post-crisis recovery
In facing these immense challenges, the relevance of the ADF 13 strategic directions and resource allocation framework, discussed in February 2020, has been carefully assessed. And overall, the framework is considered adequate and flexible enough to respond to the crisis, including potential recurrent waves. To cope with the uncertainty, ADF recipients will have a flexibility to partially frontload their country allocations, when necessary, within available resources. ADF 13 will also build the foundations of an inclusive and sustainable economic green recovery in ADF and COL countries.
Over the years, ADF has provided stable and predictable resources for recipient countries. Now, as we all face this devastating crisis, an ambitious ADF 13 and TASF 7 will be critical to support the poorest and most vulnerable countries of the region in their recovery.
I do believe the ADF 13 resource allocation framework and the proposed financing framework represent a reasonable balance—between the expected increasing demand for ADF grants and the fiscal constraints that many of our ADF donors are facing as a result of COVID-19.
I also believe ADF 13 and TASF 7 will be a powerful instrument to implement Strategy 2030. ADF 13 and TASF 7 will support quality infrastructure in line with the G20 principles and strengthen governance and institutional capacity. Its implementation will pay special attention to the following six areas:
(i) supporting FCAS and SIDS;
(ii) achieving the SDG 5 transformative gender agenda;
(iii) addressing climate change and supporting disaster resilience;
(iv) fostering regional cooperation and integration, including the provision of regional public goods such as regional health security, which is part of the universal health coverage agenda, ocean health, biodiversity, and ecosystem services;
(v) supporting private sector operations in group A countries; and
(vi) enhancing debt sustainability through a combination of policy dialogue, interactive incentive schemes, and capacity building underpinned by set-aside resources from the Technical Assistance Special Fund.
All of these special areas become even more relevant in the context of the fight against the COVID-19 pandemic and the need to support a post-crisis recovery. ADF 13 will be implemented in close coordination with other development partners, particularly the IMF and the World Bank.
Let me conclude by reaffirming ADB’s commitment toward tackling this pandemic and the economic downturn as well as achieving a more prosperous, inclusive, resilient, and sustainable Asia and the Pacific. Once again, I hope your continued strong support will be translated into a strong ADF 13 and TASF 7 and a successful replenishment.
I want to sincerely thank all ADF deputies for your constructive engagement since the beginning of the replenishment process. Your perspectives and feedback have helped us tremendously in refining our proposals. Your cooperation in finalizing the ADF 13 donors’ report and your support in smoothly preparing this virtual meeting is highly appreciated. I want also to thank you in advance for your generous contributions.
I will now turn the meeting over to Mr. Callaghan, who will continue the discussions with you, together with the members of my management team present here today.