Asia needs both hard infrastructure, software

Published on Monday, 15 May 2017

Published by Stephen P. Groff on Monday, 15 May 2017

In Beijing for the official launch of the Belt and Road Initiative led by the People's Republic of China, ADB Vice-President Stephen Groff highlights the important role in economic development played by investment in physical infrastructure.

I am in Beijing with leaders from around the world launching the People’s Republic of China (PRC)’s Belt and Road Initiative (BRI).

The BRI is a PRC-inspired plan to promote the integration of Asian, European and African markets through investments in connectivity networks.

While here, I am signing a memorandum of understanding (MoU) with the PRC government and the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the New Development Bank, and the World Bank.

This MoU explores opportunities for collaboration in investments, financial mechanisms, capacity building and the implementation of the Sustainable Development Goals and the Paris Agreement on Climate Change.

ADB welcomes the PRC’s interest in expanding infrastructure development across Asia and increasing connectivity with other parts of the world.

Our institution is celebrating its 50th anniversary and a successful history of supporting regional cooperation and integration, or RCI.

Our experience across the region leaves us convinced that sound, economically feasible, infrastructure investment and RCI both have central roles in reducing poverty and inequality as well as accelerating economic development.

On infrastructure, the needs for developing Asia are large and growing. We estimate that Asia-Pacific must invest $1.7 trillion per year if the region is to maintain growth momentum, eradicate poverty, and respond to climate change. That is a total of $26 trillion between 2016 and 2030.

As far as RCI is concerned, the BRI builds on international community-supported regional economic cooperation that has been underway for many years.

For our part, the ADB has been at the forefront of a number of regional economic cooperation efforts in the Greater Mekong, Central Asia and South Asia subregions.

Under each of these initiatives, we focus on "hard" infrastructure as well as "software" in the form of cooperation and integration of trade, investment, monetary and fiscal policies; harmonization of logistics, customs and quarantine; and cooperation on regional public goods.

We've learned that while physical infrastructure investment is key, this “software" side of the equation is equally important. Also crucial is ensuring that all efforts are anchored in regional—and national—development plans.

Promoting greater connectivity for shared prosperity has been central to ADB’s work for the last five decades.

Building on the legacy of the Silk Road, we believe that together we can continue to make significant contributions to greater connectivity across Asia and beyond.

Needless to say, we look forward to working with the BRI and all partners—old and new—who share this vision and are willing to work to achieve a more integrated, dynamic, and prosperous Asia-Pacific.

Watch above to learn more. Stay informed by following Mr. Groff on Twitter @spgroff and Facebook.