ADB urges stronger ASEAN+3 cooperation

MANILA, Philippines — The Asian Development Bank (ADB) ha s urge d ASEAN+3 economies to strengthen regional coopera­tion and integration to take advantage of post-pandemic opportunities.

In an address during the ASEAN+3 Finance Ministers’ and Central Bank Governors’ Joint Meeting held yesterday on the sidelines of the bank’s 53rd annual meeting, ADB president Masatsugu Asaka­wa said globalization may take on a more regionalistic shape as the global economy recovers from the ravages of the pandemic and economies in the bloc are in the position to pave the way for recovery.

ASEAN+3 groups the econ­omies of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singa­pore, Thailand and Vietnam, plus China, Japan and Korea.

“We need to continue strengthening regional co­operation and integration in order to deepen trade, supply chains, and investment as well as to build resilience,” Asakawa said.

“I believe that, in spite recent border closures and travel restrictions due to the pandemic, globalization will eventually come back; but it will take a different shape. Our region’s ability to seize the opportunities that emerge after the pandemic—while also managing the ongoing risks— will hinge on our collective efforts to strengthen regional cooperation and integration.”

As a k awa a l s o urg e d ASEAN+3 economies to con­tinue addressing the worsen­ing income inequality and absolute poverty with invest­ments in education, health, and social protection with a particular focus on the vulnerable sections of the population.

Likewise, investing in qual­ity infrastructure is crucial to recovery and getting back on track to achieving the Sustain­able Development Goals.

Closing the digital divide and improving cybersecurity in the region will also improve access to health, education, and financial services.

“Digital technologies also contribute to and can help accelerate climate-smart de­velopment. ADB will iden­tify and capture emerging opportunities while staying aware of the risks involved,” Asakawa said.

Enhancing the use of do­mestic resources once recovery has taken hold will also be critical moving forward, he said.

These include several changes in the tax systems such as having more progres­sive ones to redistribute in­come and narrow the income gap that has widened because of the pandemic.

Having mechanisms that capture profits generated by the digital economy will also contribute to the mobilization of domestic resources.

Also, having tax incen­tives for economic activities geared towards achieving the SDGs will aid in recovery, said Asakawa.

Supply chain disruptions caused by the pandemic have been prompting multinational companies to rationalize their operations and lessen depen­dence on China.

Even as lockdowns have been lifted in many countries and supply chain disruptions have been easing, companies have nonetheless become wary of vulnerabilities in a China-centric operation and risks associated with various geopolitical tensions such as the US-China trade tensions that continue to escalate par­ticularly in the technology sector.

Countries in Southeast Asia are widely believed to benefit the most from this shift as com­panies look for alternative des­tinations that will enable them to keep production costs down and at the same time, serve as ready markets for goods.