Creating quality jobs, developing the private sector, and combating climate change are critical for a vibrant and sustainable region, Asian Development Bank (ADB) President Takehiko Nakao said in the opening address at the recent 49th Annual Meeting of ADB’s Board of Governors. He also said that Asia-Pacific’s long-term outlook is “strong,” despite a slowdown in some economies this year.
“Jobs empower people and reduce poverty in the most fundamental way,” said Nakao. “Employment opportunities, especially for our youth, are essential to make the economy vibrant and to promote social stability. We should also ensure a safe and decent work environment.”
ADB is contributing to job creation and improved workplace conditions by supporting education and skills development for the youth, particularly young women; promoting core labor standards; and investing in key infrastructure, such as power plants, roads, and railways, especially in fragile and conflict-affected countries.
‘The basis for Asia’s vibrant future’
Nakao emphasized that the private sector is Asia’s “engine of growth.” By driving innovation and creating opportunities, he said the private sector has become “the basis for Asia’s vibrant future.”
In 2015, ADB directly provided $2.6 billion in finance to private sector companies and projects, up 37% from 2014. “It ranged from supporting financial sector development, to delivering infrastructure, to providing critical social services through the private sector—all with a strong focus on poorer countries,” he said. For every dollar ADB provides, it mobilizes at least $4 more in commercial financing. ADB is also promoting public-private partnerships by helping prepare bankable projects to attract private investment.
Climate action is fundamental
The third area Nakao highlighted is climate change. “Climate action is fundamental to the region’s sustainable development,” he said. ADB has pledged to double annual climate financing to $6 billion by 2020 as evidence of its commitment to action. Partnerships with the private sector and other cofinanciers are key to delivering the finance and new technologies needed.
Nakao also looked back at the progress ADB has made over the past year in terms of both quantity and quality. ADB’s own loan and grants approvals hit a record $16.3 billion in 2015, 21% higher than in 2014. With an additional $10.7 billion in cofinancing, total financial support to developing member countries reached $27 billion last year, also a record high.
Nakao reviewed the economic outlook of the region and observed that Asia’s long-term growth potential is strong. In many countries, the population remains young, and is growing. This will bring large demographic dividends if we can create quality jobs. The middle class is expanding, providing a basis for strong consumption. There is still much scope to grow to catch up with advanced economies.
Nakao emphasized that “in order to realize their full growth potential, Asian countries must maintain sound macroeconomic policies, invest more in infrastructure, human capital and technology, develop efficient financial markets, and improve the investment climate.”