Opening address by Carlos G. Dominguez, Secretary of Finance, Republic of the Philippines, and Chair of the Board of Governors at the 51st ADB Annual Meeting on 5 May 2018 in Manila, Philippines
Asian Development Bank President Takehiko Nakao, Fellow Finance Ministers and ADB Governors, distinguished guests: good morning.
We are greatly honored to be hosting the Asian Development Bank’s 51st Annual Meeting this year.
As we begin the sixth decade of the Bank’s work, there is a sense of a cycle ending and another one beginning. In the midst of the major shifts in the region and the changes driven by new digital technologies, we certainly have to examine the work of this institution in terms of what is new and what is forthcoming.
Hosting the ADB headquarters over the past five decades has been a source of immense pride for the Philippines. It certainly brought us into close contact with the experts and the emerging development thinking from across the vast expanse of countries served by this great institution.
Locating in Manila was a sound decision. It certainly brought the Bank closer to the realities of an emerging society—especially an emerging society such as ours with its intermittent episodes of turbulence and also moments of impressive achievement. It definitely brought the bank an ample supply of highly talented English-speaking personnel to support its operations.
The partnership between the ADB and the Philippines has been an especially fruitful one. The Bank has been a reliable and responsive partner in mobilizing resources and technical support needed for our development. The Bank helped us build critical infrastructure to support our economic growth. The ADB was generous in its support during the debt crisis of the 1980s and the Asian financial crisis of the late nineties. The institution stood with us in solidarity when calamities struck in this vulnerable archipelago.
We are extremely grateful for this strong partnership. It has enabled us in many ways to help improve the quality of life of our people. It contributed to the strong foundations on which we now build a strongly resurgent economy.
We commend ADB President Takehiko Nakao for the great work he put in leading this institution through a dramatically changing world. He is committed to the Bank’s long-term vision and remains open to the reinvention of the institution’s programs as we move into a more technologically-driven age.
Many things have changed in the Asia-Pacific the past five decades.
The center of gravity of the global economy has decisively shifted to Asia. The world’s two most populous countries—China and India—are now also among the planet’s largest economies. They have become the principal engines of growth for the global economy. The ASEAN region, a common market with 640 million consumers, includes some of the world’s fastest growing economies. In a period haunted by rising protectionist regimes and threatened by autarkic politics, the Asia Pacific stands as compelling proof that free trade brings rapid progress.
This part of the world, after all, saw the liberation of hundreds of millions of people from the grip of poverty. Over the next few years, this part of the world will demonstrate to the rest that free markets are adapting to rapidly changing technologies that provide the best conditions for inclusive growth.
The Asia-Pacific is proud of its economic achievement over the past few decades. The ADB played a catalytic role in that economic achievement.
I am particularly proud of the fact that the Philippines is fully engaged with the rapid growth of the region. Fully capacitated by the economic reforms and more efficient institutions built over the past three decades, the country is at the forefront of the region’s remarkable development. Over the past two years, our GDP grew by an average of 6.7 percent. We seek to grow at 7 percent on a sustained basis. By 2022, we expect to bring down the poverty rate to just 14 percent.
Today, we are in the process of completing a comprehensive tax reform program to further expand the fiscal space making possible immense investments in infrastructure and human capital. Our ambitious infrastructure program benefits from the support of the ADB and other partner development institutions. With this program, we will increase public sector infrastructure spending to 7.3 percent of GDP by 2022. This program will link all islands and all communities to the mainstream of wealth creation.
The infrastructure program will, at the same time, reduce our vulnerability to natural calamities. It will also foster the growth of manufactures that will lessen our dependence on remittances from our overseas workers and from the business process outsourcing sector.
We are encouraged by the ADB 2030 Strategy formulated by the present leadership of the institution. This roadmap offers a new vision and strategy for the Bank to maintain its relevance and improve its capacity to adapt to changing conditions. It is fortunate that the Bank today has sufficient financial resources to enable it to boldly expand operations and respond in a highly-differentiated way to the growing diversity and aspirations of its member-countries.
We live in a world where the pace of change is dictated by rapid advances in digital technologies. These technologies present us with upsides as well as downsides. They could improve productivity dramatically but they could also eradicate jobs and introduce greater inequalities. Our institutions must either master the technological surge or be swept away by it.
There is a need to “future-proof” our economies so that technological change makes them strong rather than undermines them. Smart technologies bring great promise but also some amount of peril.
The ADB, as the region’s main concourse of development ideas, should help member countries to better harness the forces of technological change. It needs to develop the means to support member countries from falling into the wrong side of the digital divide.
Rapid, and especially disruptive, technological progress carries both risks and rewards. The ADB is a vital institution for the region ensuring the risks are mitigated and the rewards evenly distributed.
As we adapt to a more technology infused environment, we know that technology could dramatically improve productivity. But they will also radically transform the way our societies are structured. They will demand skills our schools were not prepared to provide. They will produce virtual constituencies our political orders were not conceived to include. They will dramatically improve access to the financial system but also open doors to such things as virtual currencies that no government is prepared to regulate.
ADB Strategy 2030 is a good beginning. It is not a fully developed program for fully adjusting to the new economic balance of power as well as coping with the enormous forces unleashed by new technologies. That program will evolve into place—but only if we are prepared to reinvent and rethink.
Thank you and good day.