The rise of China-led The Asian Infrastructure Investment Bank (AIIB) is not seen as a threat to Asian Development Bank (ADB) and in fact, both can cooperate to finance the large infrastructure funding needs, Takehiko Nakao, president of the ADB, said on Thursday.
Addressing the media ahead of the multilateral funding agency’s annual meeting, Mr. Nakao said, “AIIB, it’s not the kind of threat to us. We can cooperate with AIIB because we need larger investment in Asia and we can collaborate.”
China’s clout
In 2016, China unveiled the international development bank as Beijing sought to change the unwritten rule of the financing game. With several large countries agreeing to join the bank, despite the United States’ reservation, it reflected China’s growing clout.
“We have a large system, including staff and resources like equity and so on. We can collaborate with AIIB very effectively. ADB has 3,100 staff as compared to AIIB’s 100 something,” Mr. Nakao said.
Long-term strategy
ADB has initiated a long-term ‘Strategy 2030’ to address the changing dynamics — the way Asian countries need finances to deal with poverty.
When asked, Mr. Nakao clarified that AIIB was not a motivation for initiating the ‘Strategy 2030’.
“We are forming the strategy because of so many new developments in Asia. We have COP-21, sustainable development goals, there is observation that we might have more severe kind of phenomenon due to climate change issues and must address those. So there are many reasons to review our strategy.”
The ADB president also said that the agency was looking at options on how to fund the ‘one-belt-one road’ initiative, which would connect China with the rest of Eurasia, and was open to collaborate with AIIB.
Regional cooperation
“On the belt and road initiative (BRI), we have an MoU with the Chinese authorities about things to do together. We have been promoting these ideas since 1990. ADB started this idea of regional cooperation and we are happy to cooperate with BRI when there are appropriate projects because good connectivity is important,” Mr. Nakao said.
With regard to the apprehension of a trade war between the United States and China, Mr. Nakao said while that was an area of concern, the recent tensions were yet to have any impact on investment sentiments.
“Of course, we are concerned about the ongoing disputes among some countries and if trade is interrupted it could cause damage to Asian and other countries. At this point, trade has picked up very strongly since 2017 because of higher prices of resources and stimulated by stronger growth in countries, including the U.S.,” he said.
“Trade dispute and its negative impact if escalated, is a concern, but at this moment it does not have major impact on sentiment of investor and market player. But if it continues and is escalated, it might have an impact,” Mr. Nakao added.
(The writer is in Manila at the invitation of ADB )
