Speech by Ashok Lavasa, ADB Vice President for Private Sector Operations and Public–Private Partnerships, at the Second ASEAN Global Dialogue, 13 November 2022, Sokha Phnom Penh, Cambodia

Thank you Chair for so clearly outlining the challenges that the world in general and this region in particular faces. I join the other speakers in commending your leadership in dealing with these challenges.

The ASEAN region is recovering well from the pandemic and other geopolitical shocks, but its revival is facing many difficulties ahead. Let me highlight three

  • First, pandemic outbreaks will continue to impact economic and social stability and we need to continue building strong health systems that are able to prevent, detect and respond to future public health threats.
  • Second, the destruction of human capital through prolonged spell of unemployment and education losses poses a likelihood for economic scarring and a risk to inclusive recovery.
  • Third, GHG emissions continue to increase, destroying our biodiversity and ecosystems, and contributing to the spread of communicable diseases in the region.

Health

One key lesson from the pandemic is the importance of investing in our public health systems to scale up emergency response capability, improve logistic and supply chain management for medical goods, strengthen access to vaccines and other critical medical technologies, and improve public health communication and education. We can only attain this if we raise our health spending to get closer to the universal health coverage (UHC) benchmark of 5% against the average public health spending in ASEAN of 2.1% in 2018. The region also has the highest share of out-of-pocket spending for health, at 40%; far greater than the recommended UHC benchmark of 15%–20%. of current health spending.

Investing close to 5% of GDP for public health could deliver about 1.5 percent to the growth in the region. In addition, the use of data analytics tools and big data to direct highly targeted public health interventions can also generate about $15.5 billion in potential benefits to the region.

ADB supports the ASEAN’s objective to achieve regional health security through its new strategic framework for public health emergencies. This includes support to bolster future vaccine security, establish a regional service for medical supplies, and the establishment of the ASEAN Center for Public Health Emergencies and Emerging Diseases (ACPHEED), which will allow a stronger ASEAN-wide disease surveillance system and region-wide outbreak response.

As the world emerges from the pandemic, ADB will prioritize investments in Southeast Asia that will continue to support DMCs pursue and implement UHC including strengthening national health insurance systems, building, and upgrading health facilities and hospitals, and enhancing human resources for health.

Education

The pandemic has also destroyed jobs and people’s livelihood in the region, particularly for women and the youth.

Education is one of the key priority sectors for ADB operations with a corporate priority of scaling up lending for education to 10% of total lending by 2025 from the current level of 6-7%. ADB’s Strategy 2030 recognizes the importance of investing in human capital development and places education, together with health and social protection.

Climate change

As far as Climate Change is concerned, ASEAN countries are highly vulnerable to impacts of climate change. An ADB study in 2015 on economics of climate change estimated that the countries might lose 11% of GDP annually by 2100. Recent estimates show much higher losses of GDP (~30%).

ASEAN is one of the regions experiencing very high growth rate (>5% per year) in emissions. Despite low per capita emissions, ASEAN countries have committed to global goals on climate change.

ADB is the top multilateral institution providing climate finance to ASEAN and aspires to become Asia Pacific's "Climate Bank". ADB has raised its ambition to mobilize $100 billion from its own resources over a period of 2019-2030.

Given high vulnerability of the region, ADB commits to allocate at least $34 billion for adaptation. One example of adaptation finance is the Strategic Program for Climate Resilience in Cambodia - $588 million spent on adaptation in 4 sectors - agriculture, water resources, urban development, and transport.

For mitigation, ADB has launched several new initiatives such as the innovative Energy Transition Mechanism to retire coal power plants and increase renewable energy. ADB is also coordinating the $2 billion ASEAN Catalytic Green Finance Facility (ACGF), under the ASEAN Infrastructure Fund, which is supporting countries’ sustainable recovery by helping to develop numerous bankable green and blue projects in the region.

Let me end by stating that promoting a green recovery is important to save our planet, restore our health and create more sustainable jobs and ADB is committed to supporting our DMC’s efforts in this regard.

Thank you for the opportunity

Speaker

  • Lavasa, Ashok
    Lavasa, Ashok
    Vice-President (Private Sector Operations and Public-Private Partnerships)