平和
和平
평화
ASIA
26 March 2014
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Change of direction at Asian Development Bank?

Could the Asian Development Bank be heading in a new direction under the prospective new leadership of Takehiko Nakao?

As former Asian Development Bank President Haruhiko Kuroda has now taken up the post of Governor of the Bank of Japan, the country's finance minister Aso has nominated Takehiko Nakao as his replacement. Could Mr Nakao's appointment herald a change in direction for the ADB?

Haruhiko Kuroda will be remembered as an outstanding President of the Manila-based Asian Development Bank. Intelligent, personable, visionary and truly international in outlook. He was one of the very best presidents of the ADB.

Kuroda's reign was distinguished by his vision and emphasis on regional co-operation and integration as a driver of peace and prosperity in Asia. Landmark studies were completed and promoted on "Asia 2050: Realizing the Asian Century"; "Institutions for regional integration: toward an Asian economic community"; and "Infrastructure for a Seamless Asia".

History shows that regional cooperation and integration are indeed key for achievable politically sustainable economic development. Europe is the classic example. Despite the old continent's present woes, Europe's post-war development is a great achievement when viewed from an historical perpsective. Previously warring neighbors are now working together for shared peace and prosperity. And if Europe makes it through its present euro crisis, this will truly be a unique case of international cooperation. Even the North American Free Trade Agreement is a very impressive achievement in regional cooperation and integration.

When Mr Nakao recently presented his vision of how he would lead the ADB if elected, he highlighted Asia's remaining developmental challenges, absolute poverty, overcoming the middle income trap, climate change, food security, fragile states, gender equality, regional integration, the ADB’s “Strategy 2020”, private sector development, public-private partnerships and so on. He argued that "development should, by nature, be country-driven."

Nakao's vision is very striking by its merely fleeting reference to regional cooperation and integration, and its emphasis on "country-drive" development.

This could be a sign of the times, and also the sign of a new direction for the ADB. Indeed, since President Kuroda's appointment, the prospects for regional cooperation and integration in Asia have diminished.

China has become decidely feisty regarding its territorial ambitions in the East and South East China Seas. Japan and Korea have been squabbling over disputed territory. More recently, representatives of the Sultan of Sulu in the southern Philippines invaded the Malaysian Sabah province in Borneo.

The prospects for a free trade agreements (FTAs) in Asia are not getting any better. True ASEAN has a FTA, and ASEAN has FTAs with many other countries including China, Japan and Korea. But the likelihood of an FTA between these latter three countries now seems to be receding. And Japan now seems to be opting for the US-driven Trans Pacific Partnership, driven in part by security reasons and its long-term alliance with the US.

And while Mr Nakao is arguing the merits of aid coordination to make the support from the international community still more effective, the reality is that official development assistance to ASEAN and Pacific countries is an important instrument of competition and rivalry between Japan and China, and increasingly Korea. Witness Japan's fast move into Burma, as that country seeks to reduce its reliance on China. And witness also the growing road and rail links between China and its Asian neighbors which locks them onto the Chinese economy.

Rising economic interdependence in East Asia means that the economic destinies of these economies are ever more closely linked. But the rapidly growing Chinese market is absorbing its neighbors, which are becoming increasingly reliant on the big dragon. And the increasing economic power of China is being translated into military and political power, and is reflected in China's desire to dominate rather than cooperate with its neighbors.

In these circumstances, the imperative for regional cooperation and integration is greater than it has ever been. But the prospects for a productive regional partnerships may be farther away than they have been for a long time.

The job of future President Nakao and the ADB may now be more challenging than they have ever been.

Author

John West
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
Tags: asia, Asian Development Bank, regional cooperation and integration, Takehiko Nakao, Haruhiko Kuroda, Japan, China

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