Asia’s rebalancing needs better regional infrastructure says ADB President at ESCAP public lecture
As a part of its Distinguished Person's Lecture Series, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) hosted the Asian Development Bank (ADB) on 11 November 2010 at the United Nations Conference Centre.
President Kuroda was welcomed by Noeleen Heyzer, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP, who gave some brief introductory remarks.
“Beyond doubt, the global economic crisis has forever changed the economic landscape of the world,” Ms. Heyzer said in her opening remarks. “Asia’s dynamism in the future has to be sustained by finding new aggregate demand within the region. This in turn, requires the region to rebalance itself towards greater domestic consumption and investment and through deepening regional cooperation and strengthening regional connectivity.”
Mr. Kuroda said in his remarks to the packed hall that developing Asia has recovered remarkably from the recession, but faces longer term challenges to sustain growth. One priority area would be infrastructure development, which at its current levels, is acting as a bottleneck to growth and an obstacle to poverty reduction. In this regard, Mr. Kuroda highlighted the Asian Highway and the Trans-Asian Railway projects, which together represent about 250,000 kilometers of roads and rail networks connecting capital cities, major industrial zones, and other important commercial areas. He also introduced recent initiatives such as the Asia Infrastructure Financing Initiative and the ASEAN Infrastructure Fund.
Mr. Kuroda went further to emphasize, “But an expanded infrastructure stock by itself will be insufficient…. We must invest in smart policies and regulations to foster effective cross-border movements of goods, services, and people.” A prime example of this holistic approach would be the Master Plan on ASEAN Connectivity, which was adopted at the recent ASEAN Summit in Hanoi and was supported by both ESCAP and ADB. The Master Plan identifies key strategies and actions to enhance the region’s connectivity in three dimensions: physical, institutional, and “people-to-people.”
Closing his lecture, Mr. Kuroda mentioned that an efficient system of regional infrastructure will provide the foundation for Asian common markets and facilitate the creation of an eventual pan-Asian community. In this regard, he did not believe that any single institutions can, or should, address these questions. Therefore, a “Pan-Asia Infrastructure Forum” would be needed to coordinate and guide the natural evolution of infrastructure connectivity.
During the open discussions which followed the lecture, Ms Heyzer challenged the audience, which included senior representatives from several ESCAP Member States, to move the connectivity agenda forward by bringing together the diverse sub-regional arrangements, such as the Central Asian Regional Economic Cooperation (CAREC) program and the South Asia Subregional Economic Cooperation (SASEC). Such Pan-Asian efforts would great greater synergy.
Several insightful comments and questions were made during the open discussions. Attention was brought back to the fact that Asia-Pacific is home to close to one billion people living in poverty and hence the question of how infrastructure development – national and local as well as region – could contribute to inclusive growth and poverty reduction.
It was also pointed out that in addition to the major economies of China and India, several other countries in the region like Indonesia, Viet Nam, Bangladesh and Sri Lanka are recording strong growth. However, in cases of poorer and smaller economies, substantial external assistance would be required to close the development and infrastructural gaps. Regional cooperation involving those countries would be essential, including efforts to better link them with big emerging markets like China and India.
This event was organized by ESCAP as a part of its Distinguished Person's Lecture Series which has featured talks delivered by Nobel Laureates Professor Joseph Stiglitz and Professor Amartya Sen, among others. Today’s public lecture was attended by a large audience, which included the diplomatic corps and officials from the Thai government and think tanks.