The past few decades have seen the economic growth and subsequent rise of the Asia-Pacific region as one of the world’s powerhouses, much of it based upon export-oriented manufacturing. This, in turn, has seen a sweeping drop in poverty levels across the region since 1966, a year that saw the establishment of the Asian Development Bank (ADB), the start of the Chinese cultural revolution, India’s first foray into wide-ranging economic liberalisation, ongoing war in Vietnam, and Fiji’s last election before its independence from British rule.[1]

At that time, the ADB’s focus was upon poverty eradication across the region in the face of such challenges. A little over 50 years later, the region finds itself in a decidedly different environment. Asia-Pacific is home to some, if not the only, leading global economies (China, Japan, India),[2]but also the fastest growing economies (India again, but also Indonesia, Kyrgyz Republic, Pakistan and Vietnam). Most of the region is now considered to be middle-income or high-income economies,[3]with the remaining Least Developed Countries (LDCs) on the path to graduation (such as Bangladesh and Cambodia). However, the manufacturing development model upon which much of this development rests is struggling in the face of the US-China Trade War and the rise of technology that will allow for automation, or the possibility of reshoring.[4]  Connectivity challenges also remain.

Against this backdrop, in July 2018 the ADB launched its Strategy 2030, which aims to expand the vision of the Bank to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining efforts to eradicate extreme poverty.[5]Whilst poverty levels in general have been dropping, pockets of extreme poverty still exist (which are acute in some isolated regions of China and India), but more than ever the region is marked by high levels of inequality, particularly between urban and rural populations, and ongoing problems with regards to access to healthcare, education, ICT, energy, and transport.

The Strategy 2030 recognises the rapidly changing economic landscape of the region, as well as the diversity of the individual economies. According to Mr Tomoyuki Kimura, Director General, Strategy, Policy and Review Department, ADB, the Bank is attempting to ‘break the economic and sector silos’, whilst harnessing innovative technology. To do this, the Bank has its sights set on increased engagement with the private sector to bridge the estimated annual $1.7 trillion financing gap by 2030.

The aim is to better understand the unique and different challenges of individual countries – whether that be of post-conflict members, such as Afghanistan and Myanmar, those struggling with an uneven spread of wealth, as is the case in China and Azerbaijan, or the unique challenges encountered by the Pacific Islands, who, whilst prosperous, remain vulnerable due to their population sizes and geographic isolation. The key approach will be a focus on cross-cutting thematic areas – urbanisation, ageing populations, technology challenges, which can encompass health, environment, transport and finance all at once for example. The next decade will see the Bank focused upon expanding private sector operations, acting as a catalyst for blended financial instruments, and strengthening knowledge services.

By Kerry O’Donoghue, Director of Consulting Services at International Economics Consulting Ltd

[1]Based on a Keynote Address at the European Institute for Asian Studies (EIAS) by Mr Erik Famaey, Senior Associate, EIAS, Mr Tomoyuki Kimura, Director General, Strategy, Policy and Review Department, ADB, and Mr Robert Mr Robert Schoellhammer, Euorpean Representative, ADB (October 2018)

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[1]For more on India, see Ankit Mital, ‘India and liberalisation: There was a 1966 before 1991’, in The Mint on Sunday. Available at: https://www.livemint.com/Sundayapp/h4nQPwoxX2j8HnftPQt2BI/India-and-liberalization-There-was-a-1966-before-1991.html(January 2016)

[1]See Rob Smith, ‘The world’s biggest economies in 2018’, World Economic Forum: https://www.weforum.org/agenda/2018/04/the-worlds-biggest-economies-in-2018/(April 2018)

[1]See World Bank Country and Lending Groups. Available at:

https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups

[1]For more on reshoring, see Tom Hancock, ‘Adidas boss says large-scale reshoring is ‘an illusion’’ in The Financial Times. Available at: https://www.ft.com/content/39b353a6-263c-11e7-8691-d5f7e0cd0a16(April 2017)

[1]ADB Strategy 2030. Available at: https://www.adb.org/documents/strategy-2030-prosperous-inclusive-resilient-sustainable-asia-pacific