Closing Address at the 50th Annual Meeting of the Board of Governors - Takehiko Nakao

Speech | 7 May 2017

Closing Address by ADB President Takehiko Nakao at the 50th Annual Meeting of the Board of Governors on 7 May 2017 in Yokohama, Japan

Mr. Chair, Honorable Minister Taro Aso; ADB Governors; ladies and gentlemen: 

As we come to the end of this Annual Meeting, I sincerely thank all of you for your active participation and important contributions over the last few days. We have had rich interaction at this meeting. Let me briefly highlight several important recurring themes.

1. ADB at 50.  This Annual Meeting gave us the opportunity to celebrate ADB’s 50 years of development work in Asia and the Pacific. Your strong support over the past five decades has been key to establishing ADB as the premier international financial institution in the region. The meeting helped us collectively reflect on how the region has grown over the past 50 years, how ADB has contributed to the region's growth and development, and what role ADB should play in the future. ADB will continue to evolve to stay responsive to the changing needs and aspirations of our developing member countries.

2. Support for poorest and fragile countries, and inclusiveness. While progress in Asia has been impressive, many of you reminded us that the battle against poverty is not over yet. Reducing poverty will remain our major focus. ADB will continue to prioritize the needs of the poorest and the most fragile countries, including small island countries in the Pacific. Growing inequalities are a major concern for many countries. We will enhance our support for addressing inequality across groups and regions. Strengthening financial inclusion and supporting inclusive business will be integral components of our approach to deepen inclusiveness.

3. Continued strong support for infrastructure development. As I mentioned in my opening address, ADB will continue to play a key role in mobilizing the vast resources needed for infrastructure development in the region. According to a recent ADB study, Asia will need $1.7 trillion per year in infrastructure investments through 2030. We will scale up to help meet this large infrastructure deficit, increasingly use high-level technology in infrastructure, vigorously pursue our commitment to climate finance, and actively promote public–private partnerships. In this context, I thank the Governments of Canada, Germany, Japan, and the Netherlands for their new funding commitments for climate change actions, high-level technologies, and water.

4. Mobilizing private sector resources. Governors encouraged ADB to crowd-in larger private sector financing to support the region’s development, especially for infrastructure. We are placing a strong emphasis on public–private partnerships. In our private sector operations, we plan to expand our guarantee operations, equity investments, and cofinancing. At the same time, I would like to note that in a way ADB was created to mobilize private sector resources by leveraging our equity to tap capital markets. The merger of our Asian Development Fund (ADF) lending operations and Ordinary Capital Resources (OCR) balance sheet allows us to further leverage these resources. Our experience in the past 50 years demonstrates that both public and private sector investments by ADB through preparing necessary infrastructure and setting conducive policy environment help crowd-in private sector resources and activities.

5. Expanding private sector operations. Many of you stressed the need to scale up ADB’s private sector operations. I assure you that we are deeply committed to increasing our private-sector operations to 25% of regular OCR operations by 2020. In particular, we intend to expand such operations in poorer countries. We are expanding staff resources for our Private Sector Operations Department to facilitate this scale up. 

6. Climate change and disaster risk reduction actions. You emphasized the urgent need to address climate change. We are on track towards meeting our ambitious financing target of $6 billion for climate change by 2020. We continue to pay special attention to the challenges facing Pacific island countries, particularly in adaptation.

We are actively supporting our developing member countries’ access to concessional resources, including from the Green Climate Fund. We are providing policy advice and capacity building support to our client countries for their nationally determined contributions. We will increase our support to prevent and reduce risks from natural disasters.

7. Lifting social development. Many of you underscored the need to create jobs and support human capital development, and better prepare the region to meet challenges of the aging population.  In particular, we will increase support for universal health coverage, technical and vocational education and training (TVET), and social protection.

8. Strengthening gender equality. Achieving gender equality remains a key agenda in many of our developing member countries. We have strengthened gender mainstreaming in our projects. We will continue to proactively pursue gender equality outcomes across all our operations. We will design projects that help women and girls secure higher skills, better health, more jobs, and a larger voice in decision making.9. 

9. Improving governance. The importance of addressing governance and institutional challenges was highlighted. We will continue to support structural and sector reforms to strengthen governance and support capacity development. Both project and policy-based assistance will be deployed to support governance and institutional improvements in developing member countries.  

10. Supporting different needs of countries. You asked us to be responsive to the diversity of countries and their changing needs. The Pacific Governors offered several suggestions for ADB's expanded support to their countries. Some Governors discussed the important role of ADB in upper middle income countries in areas such as supporting regional public goods, climate change and the environment, and policy reforms for boosting private sector led growth. Depending on country circumstances, we will use an appropriate combination of project lending, results-based lending and policy-based lending. Some Governors recognized the importance of supporting countries in economic distress through our countercyclical support facility. We are coordinating closely with the International Monetary Fund and other development partners for policy-based lending.

11. Deepening regional cooperation and integration. Governors expressed strong support for ADB’s role on regional cooperation and integration. This is the core of our mandate.

We will continue to deepen our own regional economic cooperation initiatives and coordinate closely with other existing and emerging regional cooperation platforms. We will continue to facilitate South–South cooperation that supports knowledge transfer and expertise among developing member countries. 

12. Expanding knowledge support. Many Governors urged us to provide effective knowledge solutions and expertise, together with expanding lending assistance. ADB is strengthening its capacity to provide knowledge solutions, and to support innovation and the integration of high-level technology in project design. ADB’s sector and thematic groups have been mainstreamed into our organizational structure and assigned roles critical for ADB operations.

13. Procurement and project implementation reforms. As mentioned by many of you, we will continue to pursue reforms to improve our responsiveness and to streamline our procedures. ADB has just approved a new procurement framework to reduce overall procurement time, improve the quality of procurement outcomes, and strengthen the procurement delivery system. We will continue to strengthen our resident missions by providing them greater authority, and out-posting more staff. We will uphold the highest levels of environmental and social safeguards in all our projects and increasingly use country systems.

14. Human resources reforms. As several Governors emphasized, highly-skilled and motivated staff is critical to deliver quality financing operations and value-adding knowledge services to client countries. We will continue our efforts to attract, retain, and motivate a highly talented and diverse workforce. We plan to strengthen gender balance of staff at all levels, including for senior positions. Many of you share my concerns about the sustainability of the staff pension plan and support its reform. We will continue to pursue utmost efficiency in our administrative budget and achieve value for money.

15. Cofinancing and partnerships. I acknowledge the importance of partnership for expanding our cofinancing and leveraging knowledge and expertise. We will continue to strengthen cofinancing efforts with our private, bilateral and multilateral financing partners, including new institutions such as the Asian Infrastructure Investment Bank and the New Development Bank. We will also enhance our partnership with think tanks, civil society organizations and innovative private sector companies.

16. Strategy 2030. I thank you for providing extensive feedback on our future strategy. You supported our focus on reducing poverty and inequalities, implementing the Sustainable Development Goals, and promoting climate actions. You also expressed support for our continued country focus, and differentiated approach to engaging countries based on their development needs, and our comparative advantage. We will balance the need to be selective to ensure our effectiveness and the need to be responsive to countries’ priorities. The strategy will have a strong emphasis on achieving results and development effectiveness. We will continue to have an inclusive and meaningful consultative process as we develop this strategy and finalize it in 2018.

Ladies and gentlemen: 

Before I conclude, I would like to express on behalf of us all our deepest gratitude to the Government of Japan and this beautiful city of Yokohama for hosting this landmark Annual Meeting, and for their warm hospitality and excellent arrangements. I thank officials and volunteers who helped make this meeting a great success.   

Finally, please join me in thanking the Philippines for hosting our next Annual Meeting in Manila in 2018.

I thank you all again and wish you a safe journey home.