ADB and the challenge of inclusive growth
By Kalayaan Pulido-Constantino
4 May 2012, Manila – Leaders from all over Asia are in Manila this week for the Annual Meeting of the Board of Governors (AGM) of the Asian Development Bank (ADB). The meeting revolves around the theme of ‘inclusive growth’ as the proposed focal point of development goals and strategies of countries in the region.
The ADB defines inclusive growth as one that creates economic opportunities and ensures that everyone has access to these opportunities. This concept was born in response to observations that rapid economic expansion in Asia in the last two decades has not sufficiently contributed to the realization of crucial development goals, such as reducing poverty and income inequality, promoting food security and improving the welfare and condition of millions of poor people in the region. A publication of the Internal Evaluation Department of the ADB reported that “the absolute numbers of poor have come down insufficiently,” and that “in some countries, the numbers of extreme and vulnerable poor have even been increasing” with “more than 300 million people in countries that have been recipient of the Asian Development Fund living on less than USD 2 a day.”1
The failure of economic growth to adequately address the issue of economic inequality undermines the sustainability of the much-vaunted Asian economic progress. The ADB is keenly aware of this. In its annual economic report, the Asia Development Outlook, the ADB acknowledges that, “rising inequality can damp the poverty impact of economic growth, and even undermine the basis of growth itself.”2 Responding to inequality and equity issues is crucial for sustaining economic progress and development.
However, for ADB and for many countries in the region, the real challenge is how to exactly actualize the idea of inclusive growth, beyond the general prescription of promoting high and sustained economic growth and social inclusion policies. What specific interventions are needed to create economic opportunities that are accessible and beneficial to all? What support must be given to poor people to empower them and put them in a position where they can take advantage of economic opportunities?
Responding to this challenge is at no time more urgent than today. The world’s population is presently at 7 billion, and is still rapidly growing. In Asia, ensuring that there is food on the table for every family requires more than improving food production. It entails empowering small men and women farmers, who are also food consumers, so that they are in position to produce and access enough food. It requires building climate resilience and enhancing small food producers’ capability to cope with the increasing frequency and intensity of extreme weather events brought about by climate change. It involves channelling public investments so that these encourage smallholder agriculture. Equally important, it requires influencing and regulating private sector investments so that these support rather than undermine sustainable food production.
The ADB must ensure that discussions on inclusive growth moves beyond the rhetoric of the AGM and deliberations on macro-economic policies and translates into the delivery and implementation of actual programs and policies that benefit and empower poor people. Inclusive growth must not become just another buzzword.
In order to ensure that growth is truly inclusive, it is essential that the ADB implements its Safeguard Policy Statement (SPS). The ADB affirms that “environmental and social sustainability is a cornerstone of economic growth and poverty reduction in Asia and the Pacific,” and that the purpose of the safeguard policies is to “promote the sustainability of project outcomes by protecting the environment and people from projects’ potential adverse impact.”
The ADB must also undertake consultations, not only with its usual clients of governments and private sector, and proactively seek out and take on the views and positions of its intended beneficiaries, which are the poor communities in Asia. It is only when the ADB actively listens to the voices of poor women and men and respects and upholds their rights that it can become successful in achieving inclusive growth.
1Asian Development Fund Operations: A Decade of Supporting Poverty Reduction, Learning Lessons, International Evaluation Department, Asia Development Bank, November 2011
2Asian Development Outlook 2012: Confronting Inequality in East Asia
Kalayaan Pulido-Constantino is the advocacy, campaigns and communications coordinator of the Philippines program of Oxfam.