The Asian Development Bank (ADB) last week reaffirmed its strong commitment to support Sri Lanka’s continued development activities, during its 50th Annual Meeting of Board of Governors, in Yokohama, Japan.
Finance and development ministers, central bank governors, other senior government officials, business executives, journalists, academics, and representatives from civil society, development organizations, and youth from the Asia and Pacific came together during the meetings to discuss Asia’s economic and social challenges during the four day event.
Operating under the theme, ‘Building Together the Prosperity of Asia’, this year’s Annual Meeting focused on the region’s growing need for infrastructure as a critical sector towards achieving sustainable and inclusive development. Discussions on how to address urban challenges and strive for clean and climate-resilient development were held during the four day event. ADB’s President Takehiko Nakao who emphasized on the ADB’s strong push for developing infrastructure in the region over the next decade, mentioned how the lending agency is planning to support Sri Lanka, by way of funding the island’s transport, agricultural and water sector projects.
Over the past couple of years the ADB has been adjusting its operations in Sri Lanka to align them with the evolving needs of the island and its people. More than five years since the end of the war in 2009, Sri Lanka’s development is entering a new phase.
It was only in February last year that ADB’s President Takehiko Nakao visited Sri Lanka and shared with the government the Bank’s plans to scale up its operations in the country.
Together with the government, ADB agreed to build a strong pipeline of projects. The Bank also committed to provide over US$2 billion in loans and equity in 2016 through 2018, compared with $1.5 billion in the preceding three years.
Speaking at the opening press conference of the ADB meetings in the Japanese city, Yokohama, Nakao said, he would like to visit Sri Lanka again in the near future and further discuss the financial support process.
Nakao was of the impression that Sri Lanka still has the potential to grow its economy rapidly if the government maintained consistent and outward policies. ADB estimates Sri Lanka’s GDP growth this year to be around 5%. Nakao was positive about the recent International Monetary Fund (IMF) facility extended to Sri Lanka. He hoped that Sri Lanka has the potential to do well by using its natural resources in a more meaningful way in the future. “Tourism and agriculture should do well for your country,” he said.
Infrastructure
ADB which has completed 50 years of services is now pushing quality infrastructure in emerging nations. The Bank wants to look at how to promote investment in high-calibre infrastructure among its members in a broad range of fields, including transportation and energy.
The demand for infrastructure in Asia is expected to grow to $ 1.7 trillion a year by 2030 and the Bank seeks to attract more funds from the private sector.
During the meetings, Nakao, the ninth president of ADB stressed the importance of the role the Bank continues to play in a world witnessing growing demand for infrastructure projects, especially, in Asia, where China’s “One Belt, One Road” policy is gathering attention.
The Asian Development Bank will lend USD 4.2 billion to develop water sector projects in Asia Pacific countries in 2017, a senior official said.
ADB Financing that Sri Lanka gets, includes, ADB loans, grants, and identified co-financing, allocated for the projects such as, Jaffna and Kilinochchi Water Supply and Sanitation Project (additional financing) 100m, Mahaweli Water Security Investment Program (tranche 2) 130m, Mahaweli Water Security Investment Program, Phase 2 (TA loan) 3 0.83m, Mahaweli Water Security Investment Program (tranche 3) 173m and Greater Colombo Water and Wastewater Management Improvement Investment Program (additional financing) USD 180 m.
Developing Trincomalee
ADB has also responded well to a request made by the government to improve the basic facilities in the Trincomalee city.
Sri Lanka government is keen to develop Trincomalee as a major investment area. Prime Minister Ranil Wickremesinghe last week said in Parliament the government has taken a decision to develop the World War II-used tank farm in Trincomalee as a joint venture between the Ceylon Petroleum Corporation and Lanka IOC.
Tabling the Memorandum of Understanding (MoU) on cooperation in economic development projects signed between Sri Lanka and India during his recent Indian visit, the Premier said: “Since 2003, the Government receives $ 100,000 per annum from Lanka IOC as lease rental.”
In this backdrop, ADB representatives were in Colombo last week for talks with government officials in this regard. ADB Technical Advisor – Urban – Vijay Padmanabhan said, ADB has lent around $2 to $2.5 billion for urbanization within the past three years and hopes to reach $4 billion by 2020.
In addition, he said, the ADB would provide assistance to set up a desalination plant worth $100 million in Jaffna for drinking water.
“We are now focusing on strengthening irrigation in Jaffna. The funds will be disbursed within this year,” he added.
According to him, the ADB is currently engaged in three key water-related projects in Colombo, Jaffna and Chronic Kidney Disease (CKD) prone areas in the Districts of Anuradhapura, Polonnaruwa, Matale, Badulla, Moneragala, Puttalam and Kurunegala – under a project called Pura Neguma.
Padmanabhan said the Pura Neguma project has been successful and $60 million in funds would be utilized for the implementation of safe drinking water supply schemes for CKD prone areas in the districts. He said, the Ministry of Provincial Councils and Local Government would be the Executing Agency of the project, while the respective Provincial Councils would implement the project at provincial levels.
“We are working on an irrigation tank in Kilinochchi to support the agricultural sector in the area, while supporting another project in Puranagama,” he said.
Future
Nevertheless, ADB stresses that Sri Lanka should take measures to diversify and expand its manufacturing and export bases to increase foreign exchange earnings.
The flagship Governors’ Seminar on May 5 discussed reforms in trade, investment, and finance, as well as lessons learned from the past 50 years of development in the region. A special book launch, as part of ADB’s 50th anniversary celebrations, was held on May 5. The Annual Meeting also highlighted the role of the private sector in supporting development programs in Asia and the Pacific through seminars focused on public-private partnerships and co financing.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, the ADB is celebrating 50 years of development partnership in the region.
It is owned by 67 members - 48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in co financing.
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ADB President calls for new infrastructure investment as part of ADB’s long-term strategy
More investments in infrastructure are needed to support continued growth in Asia and the Pacific and combat climate change, Asian Development Bank (ADB) President Takehiko Nakao said in his opening address at the 50th Annual Meeting of ADB’s Board of Governors. Investment in infrastructure, he said, will remain a priority for ADB as the Bank prepares a new long-term strategy to respond to rapid regional changes.
ADB’s Annual Meeting hosts about 6,000 government officials, academics, business officers, civil society representatives, and members of the media. Held in Yokohama, Japan, under the theme “Building Together the Prosperity of Asia,” the Annual Meeting is also a celebration of ADB’s 50 years of development work in Asia and the Pacific.
In his remarks, Nakao said ADB’s achievements over the past half century can be summarized as combining knowledge and finance, promoting good policies, and fostering regional cooperation and friendship.
Nakao said, ADB’s future direction will be led by Strategy 2030, ADB’s new long-term strategy that will map the best ways the Bank can support Asia’s growth and address development challenges including poverty, climate change, urbanization, aging, and widening inequalities. ADB continues to hold consultations on the strategy with a wide range of stakeholders from around the region and in donor countries.
Investment in infrastructure will be an ADB priority under Strategy 2030, including enhanced support for infrastructure projects that incorporate advanced technologies. Mr. Nakao remarked that “Asia will need $1.7 trillion per year in investments in power, transport, telecommunications, and water through 2030.”
Support for social sectors, especially, health and education, is a second ADB priority area under Strategy 2030. For this Nakao stated that ADB “will support universal healthcare systems and cross-border initiatives to combat communicable diseases such as, malaria, tuberculosis, and HIV.”
Strategy 2030 will also prioritize support for gender equality. Gender is a cross-cutting issue that influences all aspects of society and economic development. According to Nakao, ADB will “design projects that help women and girls secure higher skills, better health, more jobs, and a larger voice in decision-making.”
ADB will upgrade efforts to mobilize private resources for development, including through public–private partnerships under the emerging new long-term strategy. “ADB is supporting an increasing number of private sector projects in education, health, and agriculture,” said Nakao. “Funding micro, small, and medium-sized enterprises through local banks will remain a priority.”
Finally, Nakao stressed the need to continue to reform ADB as part of Strategy 2030. Among the reforms, he said, ADB will “strengthen its sector and thematic expertise, enhance staff capacity, and streamline procedures.” He added that the institution will deepen its collaboration with civil society, academia, the private sector, and local governments.
Nakao highlighted ADB’s progress in 2016. He noted that total ADB operations last year, including co financing and technical assistance, reached $31.7 billion. ADB’s loan and grant approvals reached a record high of $17.5 billion, a 9% increase from the previous year. Climate finance reached $3.7 billion, up from $2.6 billion in 2015.