The arrival of a new Asian Development Bank (ADB) president, Masatsugu Asakawa, is therefore an opportunity to review the direction of the bank. What priorities should the new president focus on now, and during the next five years or so?
Asakawa has certainly been thrown in at the deep end. Barely three months after taking office, he is faced with the need to dramatically reshape ADB’s immediate programs to response to the multiple problems that the COVID-19 virus is causing across Asia.
The main longer-term challenge that Asakawa faces — a challenge that all presidents of the bank have faced — is balancing stakeholder expectations. Asakawa must ensure that the ADB tackles key development challenges in Asia in a way that is acceptable both to the largest countries in the organisation and to the broader international community.
The new president already has his own views about these challenges. After his presidential nomination last year, Asakawa issued a vision statement outlining his aspirations for the bank. This approach follows on the steps taken by previous president Takehiko Nakao, who began the practice of issuing vision statements when he was first nominated as ADB president in 2013 and then later issued a quite detailed statement when he was re-nominated in 2016.
Three things stand out in Asakawa’s vision statement.
First, Asakawa emphasised the idea of the ADB being a ‘trusted partner of the region, and the preferred choice of its clients and partners’. This conveys the idea that the bank should aim to work closely with developing countries in Asia to support their own goals, rather than promote external objectives which might not reflect domestic concerns.
Second, Asakawa emphasised the strength of economies in Asia. He noted that the region is now an engine of global growth. He also listed a range of challenges including poverty, inequalities, climate change and the need to expand investment in infrastructure.
Third, he discussed how the ADB could maximise its impact. Asakawa pointed to the bank’s work in fragile and vulnerable countries and the urgency of building human capital. He also highlighted the importance of paying close attention to local needs in member countries.
The ADB’s strategic plan for the 2020s, ‘Strategy 2030’, summarises the international consensus on what the ADB should do over the coming decade.
The first two priorities are the need to address poverty in the region and to accelerate progress in gender equality.
It might seem surprising that the need to address poverty is seen as urgent when economic growth is strong across Asia. But current growth began from a low base. Many decades of further growth will be needed to make significant inroads into widespread poverty in the region.
Tackling climate change and making cities more liveable were listed as the next two priorities. These goals are linked — as cities across Asia rapidly grow, the demands on inadequate infrastructure facilities expand.
But although urban challenges are pressing, rural poverty remains widespread. The fifth goal listed in Strategy 2030 is promoting rural development and food security, especially for poor people. Strengthening governance and institutional capacity — the sixth priority — has been recognised as key to the national programs of Asian countries for many years.
The strategy’s final objective is to foster regional cooperation and integration in Asia. Activities to strengthen regional cooperation have always been a key focus of the bank’s work. The ADB supported efforts, for example, to combat the SARS virus in 2003 and has already committed resources to respond to the coronavirus emergency.
There is no shortage of other suggestions for ADB programs that Asakawa might draw on. The Lowy Institute, for example, produced an 80-page report on the bank in 2017 with numerous recommendations. The first recommendation noted that the bank’s role in the region ‘is even more important as geopolitical tensions and uncertainty in Asia mount’ and that the ADB ‘should be more vocal about the value of its development credentials’.
Given these pressures, any ADB president must navigate between numerous shifting shoals. In the short term, of course, the immediate priority is to provide rapid support across Asia in response to the COVID-19 emergency. Looking further ahead, some broad directions can be set down.
One is that the bank will need to balance the favoured agendas of OECD countries against the concerns of developing countries. The larger Asian developing countries have a strong hand to play in pushing back when they wish to because they only need borrow from the ADB for activities that they choose to promote.
Finding a balance between the priorities of OECD nations and developing countries will be especially tricky in the energy sector. The bank will need to pay attention to environmental issues and, at the same time, respond to rapidly rising energy needs in Asia.
A second challenge is to avoid mission creep. While the ADB is subject to a wide range of demands from many groups, the bank needs to focus. If the ADB tries to please everybody, it will become just another international agency that is trying to do too much with too little.
Another challenge is managing the bank’s relationship with major borrowers such as China, India and Indonesia. The bank’s role in Asia would be diminished if it did not have a strong relationship with these large countries.
A fourth key goal for the ADB is to continue promoting Asian regionalism. The bank has supported many regional activities across Asia since it was established in 1966. The ADB’s support for regional activities distinguishes its work in Asia from the programs of the World Bank.
It is safe to predict that in the coming decade, President Asakawa will wish to see the ADB maintain a focus on expanding regional cooperation and integration in Asia.
Peter McCawley is Honorary Associate Professor in the Indonesia Project at the Crawford School of Public Policy, The Australian National University. He was formerly an Australian Executive Director on the Board of the Asian Development Bank, Manila.
*This article was updated 21 March 2020.