Going forward

In many ways, Asia continues to struggle with its own success. Rapid growth in trade has put tremendous pressure on transport systems in the region. Population and income growth has raised the demand for electricity, communication, and travel opportunities. Urbanization is putting additional strain on sanitation and water systems, as well as logistics. Rapid change, and the desire to stay competitive, puts the additional burden of time on governments and businesses alike. In light of limited human and institutional capacity in the region, the challenges seem especially daunting.

Asia is struggling to meet these challenges by implementing institutional reform. Some countries have embraced the process of decentralization. However, to the extent that governance measures are reliable, these countries have not, as yet, achieved the desired results. All countries must attract private investment and develop the necessary infrastructure, including human capacity, to meet the demands of a growing economy.

There is a resounding call throughout the region for assistance in these matters. Countries attempting to gain expertise often find themselves competing for the same resources as the private sector, and unable to match the terms of private companies. There is also a shortage of expertise to help in the region, which can lead to conflicts of interest when dealing with many experts.

The ADB sees itself as filling a vital role in this area by providing training and acting as an ”honest broker” in many deals. This is a departure from the early years of lending (the 1970s) when ADB’s efforts to improve roads and highways were mostly directed toward construction or development of physical infrastructure. In the 1980s, road safety measures became an important project component. More recently, starting in the 1990s, lending programs began to include environmental protection measures, expanded capacity building initiatives in policy and institution strengthening, to include private sector participation. Lending in the new millennium has an HIV/AIDS and anti-trafficking component (Figure 8 [ PDF 16.9KB | 1 page ]).

Until recently, about 50% of ADB’s lending was for infrastructure. However, ADB’s approach to lending for infrastructure is changing, and steadily expanding in scope. Further, a lower proportion of infrastructure lending has been on highly concessionary terms (from ADB’s Asian Development Fund [ADF]), and ADB operations are responding more to quantity gaps in infrastructure and market gaps in private sector participation. Recently, ADB’s infrastructure lending has become more specialized and focused on a few key areas, including roads and highways, power transmission and distribution, and energy sector development. ADB’s infrastructure private sector infrastructure lending has increased sharply.

While the basic business of lending will remain the core of ADB’s activity, future programs will be focused on facilitation, training, and support for attaining the primary goals of inclusive and sustainable growth and poverty reduction.

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