Kazakhstan – historic venue for fertile ideas

By Satinder Bindra on Sun, 04 May 2014

Almost 1,500 years ago in the sixth and seventh century, southern Kazakhstan was part of the famous Silk Road that carried goods, ideas and cultural influences from as far as China to Europe.

Along with heavily laden caravans of silk, spices, gold and silver, Kazakhstan also attracted and welcomed artists, philosophers, dealmakers and intellectuals.

A thriving civilization evolved with Kazakhstan gaining the best of both East and West, while building itself an enviable reputation for being at the centre of global trade.

Hundreds of years later, the country is once again bubbling with ideas and energy and is increasingly attracting international attention, thanks in part, to its flourishing economy.

At the opening session of ADB’s 47th Annual General Meeting in the country’s capital, Astana, President Nursultan Nasarbayev reminded delegates how far the economy has come in a short time.
 
“Since 1997 Kazakhstan’s GDP has gone up twenty times’’ and it is now one of the ``top five fastest growing developing countries," he said.

ADB and Kazakhstan have been working together since soon after the country became independent in 1991 and that relationship was cemented further today when we signed a ground-breaking co-financing agreement to support the diversification of its natural resource-heavy economy so the fruits of growth are more inclusive.

The deal will see Kazakhstan provide up to $5.5 billion equivalent from its National Fund in support of ADB’s public sector investment country program.  This injection of finance will give a real lift to our joint efforts to modernize infrastructure and utilities, increase access to finance for SMEs, expand local capacity and knowledge, and to grow the private sector, including PPPs.

Now let’s switch to a broader, hot topic in the development world —the extreme poverty line figure of $1.25 a day.  Right now, based on that mark, Asia and the Pacific has around 700 million people struggling to survive, but thanks to ongoing efforts in the region, we are likely to see an end to extreme poverty by this measure within the next decade.

However, as our President Takehiko Nakao pointed out in his speech at today’s opening session, the world can’t afford to be complacent. This poverty line is now well over a decade old and can’t support even a minimum standard of living in most countries.   The time for a rethink on a minimally acceptable daily income figure is clearly here and is likely to be up and front and center as the world grapples with new development goals in the wake of the end of the Millennium Development Goal’s (MDG’s) in 2015.

Finding the necessary funds to meet development goals is, of course central to our mission. And it’s a stiff task. We’ve estimated that our region requires infrastructure investments alone of $800 billion a year for a decade. A staggering $8 trillion. That’s well beyond our existing resources which is why we work with partners and seek to leverage finance from willing sources.

Right now there’s much talk of a  planned new $50 billion Asian infrastructure investment bank led by People’s Republic of China which one press report today suggested could ``undermine and marginalize ADB.’’  

But that’s not how we see it with President Nakao pointing out at his press conference earlier this week: “Once this bank is established we are very happy to collaborate with them, and I have already mentioned to the Chinese authorities I’ll do that.”

How to use our limited resources for maximum impact is of course something ADB constantly grapples with. Here in Astana, President Nakao has unveiled an innovative plan to combine our two lending sources, Ordinary Capital Resources (OCR) and the concessional Asian Development Fund. (ADF)

The beauty of this idea of a shared resource pool is that we can leverage off our expanded equity base, and by doing so increase our lending capacity by over 20% from both our OCR and ADF windows.  In real terms, this will allow us to step up support to our neediest lower income member countries.

ADB is often criticized for not being creative enough in finding solutions to current development challenges.  But I hope you will agree that the above ideas are all good examples of where we are really walking the talk on responding to our member countries and working more closely with our partners.

Our President captured this sentiment best in his opening remarks today by quoting an old Kazakh proverb: ``The more the friends, the wider the road.’’