Taking the line that capital increase of the Asian Development Bank cannot wait, Finance Minister Arun Jaitley today hammered home the need for making the multi-lateral lender “bigger and better” to support growth in the region.
The Asia-Pacific, he said, is trying to navigate its course amid shifting tides in the global economy and ADB’s ability to make valued, timely and effective contribution is on test.
“I… hope that the winds of change sweeping the region will manifest in transforming ADB into a bigger and better bank,” Jaitley said while addressing the meeting of the board of governors of ADB.
Resource limitation need not constrain operations of the bank, he said, adding that “capital increase to enable ADB to meet its objectives in the medium and long term cannot be delayed for too long”.
Recalling his speech at the last annual meeting of ADB, the finance minister felt that ADB needs to become not just bigger, but better as a model among multilateral development banks (MDBs).
He was of the view that much more needs to be achieved to transform ADB, acknowledging that various steps have already been taken.
Jaitley made it a point to mention that India continues to maintain a high growth rate despite the global slowdown. “Our economy is projected to grow at 7.6 per cent in 2015-16 compared to 7.2 per cent in the previous year,” he added.
The minister also referred to the government’s approach of ‘Reform to Transform’ through various structural reforms. “We have taken several initiatives to boost business climate and improve ease of doing business,” he said.
Calling for reforms in processes of ADB, Jaitley said decline in disbursements under sovereign projects is a cause of concern and needs to be corrected although disbursements in 2015 showed an increase of 20 per cent over 2014.
Jaitley cautioned that as a development bank with strong footprint in infrastructure, ADB’s focus on projects should not get diluted.
“Business process reforms envisioned under the mid-term review of strategy 2020 need greater thrust and attention,” he said.
Stating that India will continue to support ADB, Jaitley said India has increased its contribution to USD 40 million for Asian Development Fund (ADF) as part of the country’s commitment to foster development and poverty alleviation in poorest countries of the Asia-Pacific region.
Strategy 2030 to guide ADB’s operations post 2020 should focus on making ADB an agent of change through its support for innovative projects, which would otherwise not happen through local intervention, Jaitley noted.
He underlined the need for delegation and decentralisation to be closer to the client to enable quicker and effective response.
“… steps have been taken for empowering resident missions into total solution providers. Creating well-equipped regional hubs at strategic locations can make a significant difference in our response time,” he said.