YOKOHAMA, Japan -- Multilateral lenders such as the Asian Development Bank and the Asia Infrastructure Investment Bank must work together to address the region's massive infrastructure needs and ensure further growth, ADB President Takehiko Nakao said.
"We don't need to regard the AIIB as a kind of rival, because there is a very large need to finance, so we can cooperate," Nakao said on May 4 at the opening news conference of the ADB's 50th annual meeting, in Yokohama.
His remarks address widespread concerns that the Chinese-led AIIB will pose a challenge to the ADB's operations in the region.
The ADB estimates Asia needs to invest $26 trillion from 2016 to 2030, or $1.7 trillion yearly, to meet its infrastructure needs. At present, only 2.5% of total infrastructure investment is funded by multilateral lenders. Excluding China and India, the ratio rises to 10%.
The ADB and AIIB have co-financed three infrastructure projects since the latter started operations in 2015: a highway project in Pakistan, a natural gas field upgrade in Bangladesh and a bypass road in Georgia.
More than 5,000 delegates from the ADB's 67 members, including finance ministers and central bankers, are gathering in Japan to tackle some of the region's most pressing development issues. "There are many challenges, although Asia has achieved a lot," Nakao said.
The four-day event -- the fifth annual ADB meeting to be held in Japan -- will address a wide range of challenges. These include mobilizing private-sector funds for infrastructure projects, coping with aging societies, addressing income inequality as the middle class continues to grow, sustaining the region's economic expansion and making cities more resilient to the threat of climate change.
If we cannot keep the stability, we'll lose much. Leaders of Asia must make efforts to keep the stability in the regionADB President Takehiko Nakao
While rising protectionism has yet to affect Asia's growth outlook, Nakao said the region should keep up efforts to lower trade barriers. Negotiations on proposed free trade agreements, such as the Regional Comprehensive Economic Partnership, which involves the Association of Southeast Asian Nations and its six trading partners, must continue, along with bilateral arrangements.
Nakao also addressed the threat posed by rising geopolitical tensions and the need for stability.
"If we cannot keep the stability, we'll lose much. Leaders of Asia must make efforts to keep the stability in the region," he said.
The ADB was founded in 1966 to help developing economies in Asia bolster economic growth. From an impoverished and largely agricultural region, Asia has become the world's fastest-growing region, accounting for almost two-thirds of global growth.
The ADB expects the region to grow to 5.7% this year and next as China, which accounts for nearly a third of output, continues to rebalance toward a consumption-driven economy from an investment-led one.