Lender offers Asia-Pacific help in putting up infrastructure in place
The Asian Development Bank (ADB) urged Asia-Pacific economies to boost the productivity of their investment in human and natural resources and said the bank is in a position to help them put in place infrastructure that incorporates both climate change resilience and inclusion of lower-income groups in the growth process.
Such move will allow the Asian lender to increase its financing commitments to countries to up to $20 billion, and if leveraged one to one with co-financing, up to $40 billion, according to a new annual review from Independent Evaluation at the ADB.
That agenda is expected to dovetail with the planned combination of its concessional Asian Development Fund lending operations and ordinary capital resources balance sheet, it said.
“ADB is uniquely placed to scale up its program in Asia. In part, it can raise the returns to the projects it finances with continued improvements in their design and delivery. The far bigger shift would be that ADB’s infrastructure strategy, along with the region’s, targets the growing income inequality and the reality of runaway climate change,” the report quoted Vinod Thomas, director general of Independent Evaluation, as saying.
The region must focus on increasing overall productivity from its investments in physical, human, and natural resources to sustain quality growth, according to the evaluation review.
The region continues to grow economically but its regional and global challenges are also daunting, it said.
The report noted that in recent years in Asia and elsewhere, growth in overall productivity has slowed, particularly since the 2008 global financial crisis.
As a result, there is need for countries and the ADB to be more strategic in getting the most from their investments, the report said.
“A part of boosting productivity is making the most of human resources, which therefore is also good for greater inclusion,” Thomas said in the report.
“Another part is relying on more high-yielding public investments, which is good for environmental sustainability and climate friendliness as well,” he added.
According to the report, “To sustain quality growth, it is vital that productivity improvements complement investments. In the face of growing inequalities and the reality of runaway climate change, the region’s challenge is to generate productivity expansion, which seems to have slowed relative to that in previous decades.”
Investing in knowledge, innovation, healthcare
That means stronger results have to be achieved from investments in physical, human, and natural resources, with greater efforts made to strengthen knowledge and innovation.
Walter Kolkma, the study’s principal author, said stronger results have to be wrung from investments in physical, human, and natural resources through efficiency and sustainability gains.
“Human development is critical for raising productivity and this means aggressive commitments to education, training and healthcare,” he said.
The study stressed that multilateral development banks can help strengthen the pace and quality of growth.
The challenge, however, is to link infrastructure investment to inclusive growth objectives and climate change, it added.