Press Release: IMF-JICA High-Level Conference Discussed How to Achieve Sustainable Growth in Low-Income Asia
October 12, 2011Press Release No. 11/361
October 12, 2011
The International Monetary Fund (IMF) and Japan International Cooperation Agency (JICA) today held a conference entitled “Sustaining Development in Low-Income Asia: Infrastructure Investment and Financial Sector Development” in Tokyo, Japan. The conference brought together senior policy makers from the region, academics, donor community, private-sector players and other stakeholders to discuss how Asia’s low income countries (LICs) can achieve growth and overcome poverty amid an uncertain global economic climate.
In opening the conference, Mme. Sadako Ogata, President of JICA, emphasized the contributions of infrastructure investment and financial sector development to the improvement of people’s standard of living and social welfare, and JICA’s focus on these areas of work. She also explained the significance of JICA and IMF’s collaboration, as the two institutions’ orientations converge, with JICA paying more attention to macroeconomic situations of aid-receiving countries, and the IMF being more involved in LICs’ inclusive growth. In his keynote speech, Mr. Takatoshi Kato, President of Japan Center for International Finance, and Member of the G-20 High Level Panel for Infrastructure Investment, outlined the work of the High Level Panel, and noted that many of the key themes the Panel is considering are covered in this Conference, such as the source of long-term financing for infrastructure investment. He stressed the need for donors and Multilateral Development Banks to provide support for LICs’ project preparation, including through funding such preparation process, to ensure that the right projects and right project specifications are chosen.
The discussions of the subsequent sessions centered on three themes: (1) macroeconomic lessons from emerging market economies on infrastructure investment and its financing; (2) lessons from the region on important policy considerations for infrastructure development; and (3) policy challenges facing the LIC financial sector. Participants agreed that LICs will need to ensure macroeconomic stability, while strengthening infrastructure investment and financial sector development, in order to enhance their growth potential. Discussions focused on the need for LICs in Asia to make further progress with developing broader financing options, including the private sector, and attracting foreign direct investment into infrastructure and other sectors crucial for raising the growth potential. Participants agreed that this would require structural change to boost longer-term resilience, including developing broader domestic engines of growth. Here, a national strategy that looks at issues such as infrastructure improvement and financial deepening is crucial.
During his luncheon speech, Mr. Rajit Nag, Managing Director General of the Asian Development Bank, discussed the possibility of the “Asian Century” to come. After laying out a number of challenges that Asia needs to overcome to make this happen, he concluded that “It is plausible but not pre-ordained.”
In the concluding policy roundtable, participants looked at options for developing investment and financing channels with the private sector, with emphasis on learning from other experiences with public private partnerships and deepening them in Asia’s LICs. Mr. Anoop Singh, Director of the IMF’s Asia Pacific Department, observed that despite fast growth and progress in poverty reduction, income inequality in Asia has increased over the last decade and by more than it has in other regions, including in the LICs. Key elements of a strategy to reduce the share of vulnerable households would include better social safety nets and more investment in health and education. He suggested that such measures would help make growth in Asia more “inclusive.”
The outcome of this conference will be reflected on global dialogues on developmental aid such as at G-20 Meetings and the Fourth High Level Forum on Aid Effectiveness. The program of this conference and some of the speeches and presentations are available at: http://www.imf.org/external/np/seminars/eng/2011/lic_tokyo/