ADB backs free trade amid protectionism threats

AFP FILE PHOTO

NADI, Fiji — The Asian Development Bank (ADB) sees free trade as key to sustainable economic growth, such that the Manila-based multilateral lender supports moves to combat protectionism, its president Takehiko Nakao said Friday.

“Economic growth in the region remains solid, while there is much discussion about a slowdown and uncertainties in the global economy. Domestic consumption and investment have provided a strong growth foundation. In some countries, growth is even accelerating. Countries need to continue to pursue prudent macroeconomic policies, implement structural reforms, and invest in human capital and infrastructure,” Nakao told the governors who represent its 68 member-countries during the lender’s 52nd Annual Meeting.

Nakao said economies across the Asia-Pacific region were expected to grow by an average of 5.7 percent this year.

“If we can grow 6 percent annually, the economy will double in 12 years,” he said.

However, Nakao warned “trade tensions remain a concern,” a downside risk to the rosy outlook.

“If tensions escalate, they could seriously undermine consumer and investor confidence and weaken growth in the region,” he warned.

As such, Nakao said “maintaining open trade and investment regimes is key to vibrant and sustainable growth.”

“In this respect, the ongoing efforts by Asian governments to promote new multilateral trade agreements within the region and beyond are encouraging,” he added.

To support not only sustained economic growth but also inclusive development in the region, Nakao said ADB will focus on six areas supportive of its “Strategy 2030” launched in July last year.

Nakao said the six focus areas are as follows: addressing remaining poverty and reducing inequalities across Asia-Pacific; accelerating progress in gender equality; focusing on climate mitigation and adaptation efforts; continuously supporting regional cooperation and integration; expanding private sector lending, equity investments and guarantees; and using concessional resources effectively.

“There has been much discussion lately about the value of multilateralism. I am a firm believer in the multilateral system, which includes multilateral development banks such as the ADB. National interests and multilateralism go hand in hand because we need international cooperation and collective action for the interests of people in nation states and the world,” he said.

“Because multilateral development banks leverage taxpayers’ money by tapping capital markets, they can efficiently and effectively support poverty reduction, invest in infrastructure, address climate change, and provide other global and regional public goods. But we must continue to reform and reinvent ourselves to achieve our missions and ensure the support of member countries and their taxpayers,” he added.