Speech by Masatsugu Asakawa, President, Asian Development Bank, at the ASEAN+3 Finance Ministers’ and Central Bank Governors’ Joint Meeting (AFMGM+3), 18 September 2020
Your excellencies, ladies and gentlemen:
Today, I would like to share with you what ADB has been doing to help our developing members cope with the coronavirus disease (COVID-19) pandemic. Then, I will present five key policy areas that I believe are critical to ensuring a robust, inclusive, and sustainable recovery.
I. ADB’s response to the COVID-19 pandemic
Together with our development partners, ADB responded quickly to the pandemic. On April 13, we launched a $20 billion comprehensive support package that consists of three pillars.
The first pillar is to provide grant and technical assistance to help governments purchase urgently needed medical and personal protective equipment.
The second is to provide countercyclical budget support through our new financing instrument called the COVID-19 Pandemic Response Option—also known as CPRO. This financing helps governments implement expenditure programs to respond to the pandemic, with a particular focus on assisting poor and vulnerable people.
And the third pillar is to support the private sector by providing working capital and short-term financing to rejuvenate the supply chain and trade, as well as to maintain employment.
As of mid-September, ADB has committed $11.2 billion, including $8.2 billion in CPRO for 19 countries; and mobilized $7.2 billion in cofinancing for COVID-19 operations.
Close collaboration with the IMF, World Bank Group, World Health Organization, UNICEF, and other UN agencies has also been crucial to our response.
II. Key policy issues
Looking ahead to the recovery phase, I urge ASEAN Plus Three to consider five key policy issues.
First, we need to continue strengthening regional cooperation and integration in order to deepen trade, supply chains, and investment—as well as to build resilience.
I believe that, in spite recent border closures and travel restrictions due to the pandemic, globalization will eventually come back; but it will take a different shape. Our region’s ability to seize the opportunities that emerge after the pandemic—while also managing the ongoing risks—will hinge on our collective efforts to strengthen regional cooperation and integration.
The ASEAN Plus Three member states can play a very important role in paving the way forward, with a spirit of open regionalism that fosters more resilient and inclusive globalization.
Second, we must address worsening income inequality and absolute poverty with further investments in education, health, and social protection—again, with a particular focus on the poor and the vulnerable, including women and marginalized populations.
Third, investing in quality infrastructure is crucial for rebuilding smartly and getting back on track to achieve the Sustainable Development Goals. To support implementation of the G-20 Principles for Quality Infrastructure Investment, ADB is promoting knowledge, capacity development, and digitalization across our projects.
Fourth, let us harness IT and Big Data to improve accessibility and the quality of health, education, and financial services, while also closing the so-called digital divide and strengthening cyber security.
Digital technologies also contribute to and can help accelerate climate-smart development. ADB will identify and capture emerging opportunities while staying aware of the risks involved.
And fifth, but not least, we need to enhance domestic resource mobilization once there are signs that recovery is taking hold. Appropriate tax policy measures will be critical at that stage. Among them are:
- A more progressive tax system to redistribute income and help narrow the income gap that has widened because of COVID-19;
- International cooperation to close tax loopholes and capture profits generated by the digital economy; and
- Proper tax incentives to incentivize economic activities toward achieving the SDGs through measures such as carbon taxes.
I’ll stop here and welcome your comments and questions.