Leading through Global Influence and Strong Country Presence: My Vision for ADB as the Partner of Choice for Asia and the Pacific - Masatsugu Asakawa

Speech | 5 February 2020

Town Hall Address to ADB Staff by Masatsugu Asakawa, President, Asian Development Bank, at ADB Headquarters, Manila, Philippines, 5 February 2020

I. Introduction

Good afternoon. It is a pleasure to be with you today at ADB Headquarters, and to be joined by staff through video from our field offices. I am very excited to be back at ADB and the Philippines after thirty years. I was here from 1989 to 1992 as an advisor to then ADB President Mr. Kimimasa Tarumizu.

When I was last here as a staff member, ADB’s headquarters had just moved to Ortigas. Back then, there was almost no development in this area.

One peaceful Saturday afternoon in June 1992, when I was on a tennis court near the airport, Mount Pinatubo erupted. This created major disruptions to our operations and internal management. I learned from that experience how important and difficult it is for us to prepare for and respond to disasters. Just before my return to ADB last month, the Taal Volcano erupted.

And, we are now facing a serious regional and global challenge caused by the coronavirus. I want to extend my deep sympathy for those who suffer from these events. Let me also stress that ADB management is providing support to the staff and families of our resident mission in the PRC. ADB continues to monitor the situation closely and stands ready to provide swift assistance to affected countries if requested.

This afternoon, I want to introduce myself and share with you my ideas about ADB’s important work in the years ahead.

II. My background

I am returning to ADB with thirty eight years of experience in the Ministry of Finance of Japan, the IMF (International Monetary Fund), and the OECD (Organization for Economic Cooperation and Development), where I worked on a wide range of international economic and financial issues. Let me share with you three memorable events.

First, in September 2008, I became the executive assistant to Prime Minister Taro Aso. That was right after Lehman Brothers collapsed. I took a lead in coordinating the global response to this Financial Tsunami through close collaboration among G7 and G20 countries as well as international organizations. The G20 Summit Meetings were in Washington, D.C. in November 2008, followed by the second meeting in London in April 2009. Thanks to the close policy coordination among the G20 countries, the world economy started to recover in the second half of 2009.

I learned from this experience how deeply interconnected we are, and how quickly a problem in one country can spiral into a global problem. I also realized that if countries and international organizations act quickly and collectively, we can deal with global crises.

The second area I want to share with you is about my long-term efforts as Chair of the OECD Committee on Fiscal Affairs from 2011 to 2016, when we moved the Base Erosion and Profit Shifting—or BEPS—Project forward. The Project aims at getting multinational companies to pay their fair share of corporate taxes in the country where their profits are generated. This experience also shaped my belief that a global problem requires a global solution with cross-border collaboration, while preserving the sovereign rights of each country.

The third set of events involve the G20 meetings last year under the Japanese presidency. As Vice Minister for International Affairs, I served as Finance Deputy for these meetings. Throughout our work on G20, I saw that ADB made substantial contributions to the discussion. I also realized that so many of the G20’s key agendas intersect with ADB’s Strategy 2030—a strategy that reflects our clients’ emerging needs.

For example, high quality infrastructure principles are very important for our developing member countries. Universal health coverage is becoming a priority for many of our clients. Aging, which was a topic never before discussed in the G20 until the meetings under the Japanese presidency, is increasingly relevant to our members in the face of demographic trends. Strengthening domestic resource mobilization with well-designed tax policy and strong tax administration is a foundation for all countries to achieve the Sustainable Development Goals. I believe ADB can draw from the progress made in G20 discussions in our operations where relevant.

III. Development challenges for the Asia Pacific region

As I begin my tenure here as President of ADB, I want to highlight the remarkable achievements of countries in Asia and the Pacific in recent decades.

Since 1990, when I was previously an ADB staff member, GDP per capita in developing Asia increased from $1,078 to $4,093 in constant 2010 dollars. Average life expectancy extended from 63 years to 71.8 years. Years of schooling increased from 6.4 years to 8.9 years. Many countries now work together under regional cooperation and integration initiatives, which provide a basis for regional stability and economic growth.

I am proud that ADB has been a reliable partner for clients in these successful journeys. However, I also bear in mind that our region is undergoing fundamental and structural change caused by three major factors: globalization, digitization, and aging. With this in mind, let me present the key issues that I want to address during my tenure.

1. Tackling extreme poverty. Extreme poverty still exists in Asia. There are 260 million people in our region living below $1.90 per day. Income inequality is widening in many developing member countries.

We need to help countries maintain high economic growth and introduce strong social safety nets such as universal health coverage. It is critical that growth be inclusive. Let us enable every citizen to contribute to economic growth and benefit from quality job opportunities. To achieve this, let us invest more in human capital.

2. Achieving gender equality. Gender equality should continue to be a main focus in ADB’s operations. Investing in gender equality in human capital development, jobs, and decision making can contribute to better social indicators and higher GDP. We aim to promote gender equality in at least 75% of ADB’s committed operations by 2030. Though ADB achieved strong performance in 2019, let us accelerate our collective efforts to sustain this high performance target.

3. Addressing climate change. I believe that protecting the environment and tackling climate change is a foundation, rather than an obstacle, for economic growth. The poor and the vulnerable suffer the most from the impact of climate change, ocean pollution, and natural disasters. I am proud that ADB achieved the target of doubling our annual climate finance to $6 billion last year. Let us continue to be a leader in the global community that helps keep our planet livable by offering concrete actions to address climate change.

4. Developing quality infrastructure with private sector participation. Infrastructure is still a major priority in the region. Our analysis found that there is a $1.7 trillion infrastructure need in Asia and the Pacific annually. This will continue to pose a barrier to development if not addressed. We should bear in mind that multilateral development banks (MDBs) are not enough to meet these financing needs.

We must mobilize more private sector resources to support infrastructure development. At the same time, let us focus more on maintaining quality as much as quantity. We have to look at issues such as lifecycle cost, environmentally friendly approaches, disaster-proof design, technology and knowledge transfer, and debt sustainability. Let us also encourage our clients to embrace advanced technologies so that they can reap the benefits of digitization.  

5. Mobilizing domestic resources. We should also support our developing member countries in the area of domestic resource mobilization. Strengthening tax policy and administration will be a key priority, including in the area of international taxation and exchange of tax information across countries. This will support broader efforts to strengthen governance as well as global initiatives to combat money laundering and terrorist financing. It is also important to increase domestic savings and channel resources efficiently through improving the financial sector and domestic capital markets.

IV. ADB then, now, and in the future

Let me step back a bit to consider where ADB started and where we can go in the future.

ADB was established in 1966 as a “home doctor” for countries in Asia and the Pacific. Since then, ADB has evolved significantly. When I first joined ADB, a quarter century after its establishment, we had 1,785 staff members. Ninety-four of them, or just 5% of ADB staff, were assigned to our field offices in five countries. Today, the number of total staff stands at 3,556. Twenty-six percent of our staff are stationed in over thirty field offices.

I am also glad to see progress in the representation of women at ADB. Back in 1989, there were only 27 women out of a total 604 international staff, or just 4% of IS staff. Today, over one third of international staff are women.

Our strengthened and more diverse workforce has supported ADB’s growing operations. Our total annual approvals grew from $3.7 billion in 1989 to U$19.5 billion in 2019. Private sector operations grew by tenfold in the same period. And ADB now produces a variety of knowledge products, including Asian Development Outlook (ADO) and Asian Economic Integration Reports, which are renowned globally.

Going forward, I want to highlight three key areas that will enable ADB to keep up with changing circumstances in our region and globally.

The first is to further develop our explicit and tacit knowledge to help solve emerging issues with our clients. These include aging, disaster preparedness and response, and a widening income gap. We should also disseminate our practical and cutting-edge knowledge within and beyond Asia and the Pacific. Let us create new development models that can eventually be replicated across the globe, so that ADB will stand out as a leading development institution with global impact.

Second, I want you to take full advantage of ADB’s unique feature of having private sector and sovereign operations under one roof, with one balance sheet. Our One ADB approach will consolidate our expertise and knowledge seamlessly. We will further promote staff mobility, enhance knowledge sharing, and equip promising staff with a broader perspective to apply an integrated approach to our operations. I believe a person with a breadth of experience is better able to manage a diverse workforce.

Third, let’s foster a culture of innovation. To stimulate innovation, we should nurture a corporate culture that promotes mutual respect among staff at all levels. I will take the lead in creating an environment where everyone can contribute in the most effective manner—regardless of nationality, job category, gender, sexual orientation, ways of thinking, or religion.

In conclusion, I want to remind myself of the motto introduced by the first ADB President Takeshi Watanabe: "Learn before teaching.” As the new President of ADB, I am keen to learn from staff, board members and management, clients, and development partners. I believe careful listening will prepare me to do my best as I lead this institution.

Just as I listen and learn, we as an institution must do the same in our efforts to evolve from the role of “home doctor,” so that we can best serve as the partner of choice for our clients—known for its global influence and strong country presence.

Let me conclude this address by offering my heartfelt thanks for the contributions you make every day to our mission. It is my immense pleasure to join you in pursuing our common goal: achieving a more prosperous, inclusive, resilient, and sustainable Asia and Pacific.

Thank you.