The Asian Development Bank (ADB) needs to increase support for inclusive and green economic growth for developing member-countries (DMCs), according to a recent study.
In the “Inclusion, Resilience, Change: ADB’s Strategy 2020 at Mid-Term” report released by the ADB’s Independent Evaluation Department (IED), the ADB still lacks projects and programs that support socially inclusive and environmentally sustainable growth in Asia and the Pacific.
An increase in the ADB’s support is necessary given that many of its DMCs, including the Philippines, have recently experienced devastating natural disasters that make it imperative for countries to shift to sustainable strategies to attain and maintain inclusive economic growth.
“Amid ADB’s great strengths, there’s an important gap to be addressed in gearing the institution’s operational priorities more squarely with its strategic agenda for inclusion, sustainability and regional integration,” IED Director General Vinod Thomas said.
“Immense development benefits could result from such a shift that supports social inclusion more directly through job creation and improving livelihood, and furthers environmental care and climate action, while generating high growth,” he added.
The IED noted that while developing Asia and the Pacific countries, including the Philippines, would continue to deliver robust economic growth of around 6.2 percent this year, income inequality persists.
But IED said income inequality is widening in the 12 countries that make up 80 per cent of the region’s population, which, in turn, is weakening the impact of growth on reducing poverty and could threaten social cohesion.
To help in addressing this, the IED urged the ADB to promote inclusion by supporting projects that benefit lower-income and vulnerable groups, including women. Examples include projects that improve access to energy and social services in rural areas and public transport in cities.
The IED added that if the ADB combines financing in infrastructure-related development areas, projects will be bound to be more inclusive and sustainable. It added that efforts to promote good governance and private-sector development will also contribute to inclusiveness.
The IED said concerns over rising inequality, the environmental costs of the current pattern of economic growth, and the dangers of climate change are at the forefront of the emerging issues that are shaping a new development path for the region.
“Asia and the Pacific is at a turning point, as recognized in the national plans of many countries. In view of the intensity of the challenges, Strategy 2020’s goal for strong, socially inclusive, and environmentally sustainable growth is even more urgent today than when it was approved five years ago. ADB, as the region’s premier development institution, can and must rise to the challenge of helping to meet this goal operationally,” Thomas said.
The study notes that the ADB makes sizable investments in rehabilitation and reconstruction following natural disasters; extending, for instance, $892 million to the Philippines last December for the rehabilitation of areas ravaged by Supertyphoon Yolanda.
This amount includes a $500-million emergency loan, a $372-million loan for a community-driven development project, and a $20-million grant from the Japanese Fund for Poverty Reduction.
“But following a succession of devastating disasters in recent years—in the People’s Republic of China, India, Pakistan, the Philippines, Thailand and the Pacific—the need for ADB to increase financing and other resources to help countries prepare better for disasters and to manage the ever-growing risk of climate change is especially urgent,” Benjamin Graham, a co-author of the study, said.
The study assesses the ADB’s development strategy, which runs from 2008 to 2020, at the halfway mark. Experts from the United Nations and the European Union and senior government officials from Asia contributed to the review.
