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ASIAN DEVELOPMEN BANK INSIUE
Kasumigaseki Building 8F3-2-5 Kasumigaseki, Chiyoda-ku
okyo 100-6008
Japan
el: +81-3-3593-5500
Fax: +81-3-3593-5571
URL: www.adbi.org
Email: [email protected]
2013 Asian Development Bank Institute
Cover photo: Kasumigaseki Building, okyo, Japan
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Table of Contents
eans essage ................................................................................................................................... 2
Advisory Council ...................................................................................................................................
ision and verview ........................................................................................................................... 4
esults ramework ................................................................................................................................
Collaboration within AB and with AB eadquarters ................................................................. 6
orking with ther nowledge artners .......................................................................................... 8
esearch ............................................................................................................................................ 12
Capacity Building and Training ........................................................................................................ 24
utreach ............................................................................................................................................. 0
Appendix 1: rganization Chart ......................................................................................................
Appendix 2: eans and Advisory Council embers ..................................................................... 8
Appendix : esearch Events ........................................................................................................... 9
Appendix 4: Capacity Building and Training Events....................................................................... 42
Appendix : elected AB ublications ......................................................................................... 44
Appendix 6: Top 0 ownloads of 2012 ........................................................................................... 2
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ist of AbbreviationsADB Asian Development Bank
ADBI Asian Development BankInstitute
AEC ASEAN Economic Community
AFDC Asia Pacifc Finance and Development Centre
APEC Asia-Pacifc Economic Cooperation
ASEAN Association o Southeast Asian Nations
BRICs Brazil, Russia, India, Peoples Republic oChina
CAREC Central AsiaRegional Economic Cooperation
CASS Chinese Academy o Social Sciences
CBT capacity buildingand training
CEPII Centre dEtudes Prospectives et dInormations Internationales
CLMV Cambodia, Lao Peoples Democratic Republic, Myanmar, Viet Nam
DAJA DevelopingAsia Journalism Awards
DMC developing member country
DRM disaster risk management
ESCAP Economic and Social Commission or Asiaand the Pacifc
ERD Economics andResearch Department, ADB
EU European Union
FTA ree trade agreement
G20 Group o Twenty
IADB Inter-American Development Bank
IMF International Monetary Fund
IWRM Integrated Water andResources Management
NEAR North East AsiaResearch Foundation
OECD Organisation or Economic Co-operation and Development
PPP public-private patnership
PRC Peoples Republic oChina
RePEc Research Papers in Economics
SME small and medium-sized enterprise
SSRN Social Science Research Network
UNDP United Nations Development Programme
VIIES ViennaInstitute oInternational Economic Studies
WTO World Trade Organization
US United States
$ = US dollar
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2
he year under review was highlighted by ADBIsdevelopment and introduction o a results
ramework, increased collaboration internally
and with ADB Headquarters, a strong ocus on external
knowledge partnerships, and the advancement o research
as well as capacity building and training (CB) activities.
he ADBI results ramework contains a set o 15
measurable indicators that will enable perormance to
be tracked in a more systematic and structured way than
in the past. his is the irst knowledge management
results ramework in ADB and the frst among the majormultilateral development banks to combine research, CB,
and outreach.
hrough the year, the coordination o Research and
CB activities was strengthened with joint projects that
involved the active participation o ADBIs Research and
CB Departments through all phases o the project cycle.
Moreover, ADBIs Outreach Unit worked closely with
both departments to disseminate ADBI outputs along
multiple channels.
ADBI continued in 2012 to improve ties with its parent
institution, ADB, with collaboration at the level o strategic
planning, joint ownership o major studies, and individual
activities. Formal contact points were also appointed in
ADBI and departments at ADB Headquarters to establish
more structured communications. As well, ADBI sta
began to serve as peer reviewers or certain ADB projects.
Working with external knowledge partners is a priority
or ADBI. In 2012, ADBI collaborated with global and
regional organizations, government, public agencies,think tanks, universities, and other knowledge partners.
Such collaboration broadens ADBIs understanding
o development issues, raises the quality o its research
and CB activities, widens outreach, and enhances the
impact o activities. Such external partnerships in 2012
included the ADBI-OECD Conerence on Services in
Selected Sectors and the ADBI-World Bank Roundtable
on Regional Commodity Exchange Market Integration in
Asia.
Besides advancing the work o ongoing research projects,six new projects with cross-cutting themes were initiated in
2012. Tese included the new agship study Connecting
South Asia and Southeast Asia, which will analyze how
closer regional connectivity and economic integration
between South Asia and Southeast Asia can beneft both
subregions given the new role played by Myanmar in
acilitating this process. Moreover, the study Future o the
World rading System: Asian Perspectives was launched
in 2012 to undertake a broad and comprehensive
examination o key changes occurring in the world trading
system and their policy implications or Asia.
CB activities are spread across the themes o inclusive
and sustainable growth, regional cooperation and
integration, and governance or policies and institutions,
o which there were 23 policy dialogues, six course-based
training programs, and one e-learning course in 2012.
Microfnance raining o rainers was a distance learning
course that sought to strengthen the institutional capacity
o microinance in the region by increasing the number
and country coverage o accredited microfnance trainers.
Running or the eighth time, this course had over 300participants in 2012.
In the area o outreach, ADBI continued eorts to widely
disseminate ADBI outputs in the orm o publications and
through top-tier and local media, the ADBI website, and
social media channels. A new initiative or 2012 was the
introduction o the ADBI blog Asia Pathways, through
which short original contributions on economic and
development issues in Asia and the Pacifc are presented.
It is my sincere wish that this 2012 activity report oADBI provides a solid understanding o our work as
the think tank o ADB and how our strategic ocus and
activities contribute to ADBIs vision o being the leading
knowledge center or economic development in Asia and
the Pacifc.
Masahiro Kawai
Dean & CEO
Asian Development Bank Institute
eans essage
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he unctions o the Advisory Council are setout in Article IV o the Statute o the Asian
Development Bank Institute. Te Council has
seven members, one o whom is a senior ocial rom
ADB Headquarters (HQ). Te other members o theAdvisory Council are distinguished practitioners or
scholars in the ield o development or management
selected rom among ADBs members on a broad
geographical basis. Members o the Advisory Council
are appointed or two years by the ADB President
and may be reappointed. Tey meet twice a year. Te
Advisory Council selects its own chair.
In accordance with the Statute, the Advisory Councilprovides advice and recommendations on the strategic
directions o ADBI and reviews the ADBI work
program. In the governance structure o ADBI, the
Advi sory Counci l pl ay s a cruc ia l ro le in gu id ing
ADBIs activities and ensuring that its work products
and chosen projects are o the highest standards and
relevance.
Te Advisory Council met in okyo on 27 April 2012
and Manila on 2 October 2012, where it considered
ADBIs work program or 20132015.
Advisory Council
tanding from left): asahiro awai AB ean) asahisa ujita Changyong hee
eated from left): ebastian aust aruhiko uroda AB resident) and Cinnamon
ornsife. Not pictured: Ajit umar eth)
Name Country
Cinnamon Dornsie
ActingCo-Director o the International Development Program,
The Paul H. Nitze School oAdvancedInternational Studies, Johns Hopkins University
United States
Masahisa Fujita
President andChieResearch Ocer, Research Institute o Economy, Trade andIndustryJapan
James Richard Gilling
First Assistant Director General, AusAIDAustralia
Justin Yiu Lin
Honorary Dean, National School o Development, Peking University
Peoples Republic oChina
Sebastian Paust
Senior Adviser to the ManagingBoard, Deutsche Gesellschat r Internationale
Zusammenarbeit GmbH
Germany
Ajit Kumar Seth
Cabinet Secretary andCabinet Secretariat, Government oIndiaIndia
ChangyongRhee
Chie EconomistADB
ustin ifu in
ames illing
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4
ision and verview
he ADB Institute is recognized as the leaderin the creation and sharing o knowledge on
economic development in the Asia and Pacifc
region. ADBI conducts research and capacity building
and training activities that contribute to ADBs overall
objective o poverty reduction.
ADBI ocuses on medium- to long-term development
issues o strategic importance to senior policymakers.
he objectives o ADBI, as set orth in its Statute,
are to identiy eective development strategies and to
improve the capacity o agencies and organizations indeveloping member countries.
ADBI strives to be demand-driven and to respond
to important challenges aecting many stakeholders
in the region in a timely, operationally relevant, and
policy-oriented ashion.
ADBI increases the impact o its activities by working
closely with leading think tanks to shape the debate on
key emerging issues and to develop sound and practical
recommendations regarding policy reorms.
ADBI ensures the quality o its research and capacitybuilding and training programs by pursuing excellence
and originality in areas where it has an unmatched
strategic advantage, such as the analysis o emerging
policy issues rom a regional perspective. o urther
strengthen its reputation as a trusted knowledge
institution, ADBI has introduced a results ramework
or its programs and activities. It also seeks to enhance
its visibility, impact, and accessibility through the use
o new media and refned knowledge products.
ADBI has been pursuing a work program with threestrategic priority themes, which orm a coherent basis
or all its activities:
t Inclusive and sustainable growth
t Regional cooperation and integration
t Governance or policies and institutions
Private sector i s sues , as dr ivers o economic
development, cut across all the strategic themes.
ADBIs fnancial statements can be ound in the ADBAnnual Report 2012, Vol. 2.
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ADBI adopted a recommendation in the specialevaluation study o ADBI published in 20111
that it should develop a results ramework,
accomplishing it in close coordination with knowledge
departments at ADB HQ.
he ADBI ramework is the irst in ADB to ocus
on knowledge activities and it has drawn on state-o-
the-art thinking. he ramework contains a set o 15
measurable indicators that will enable perormance
to be tracked over time in a more systematic and
structured way than in the past. Monitoring againstthese indicators will begin in 2013.
his is the irst knowledge management results
ramework in ADB and the irst among the major
multilateral development banks to combine research,
capacity building and training, and outreach. ADB
HQ is in the process o establishing its own knowledgemanagement results ramework and ADBI will be
working closely with the knowledge departments to
ensure that the rameworks are compatible.
he results ramework will make ADBIs strategic
direction much clearer or stakeholders and or
sta, who will be able to see how their individual
achievements ft into ADBIs broader picture.
he ADBI results ramework is a clear indication
o how seriously ADBI takes the need to track andimprove its perormance. Establishing well-deined
measurable indicators and monitoring perormance
against them will give management a clearer idea o
where ADBIs strengths and weaknesses lie and will
enable them to improve perormance as a result.
esults ramework
1ADB. 2011. Special Evaluation Study: Performance of the Asian Development Bank Institute: Research, Capacity Building and
Training, and Outreach and Knowledge Management. Manila.
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ADBIs Research and Capacity Building
and raining (CB) departments
continued to act as a team and to share
resources in undertaking their activities.
Research ellows participated in selected
CB activities as resource speakers and as
discussants, allowing them to supplement
their theoretical work with insights
rom CB participants engaged on a
day-to-day basis with emerging issuesin developing countries. Joint activities
organized by the Research and CB
departments in 2012 included: OECD
ADBI Roundtable on Capital Market
Reorm in Asia, CLMV Project
raining on Agricultural Productivity
and Natural Resources Management,
and Policy Dialogue: ASEAN, the PRC,
and India: Te Great ransormation?
he Outreach Unit works with the
Research, CB, and Administration,
M an age m e n t , an d Co o rd in a t i o n
departments to ensure that all ADBI
events, publications, working papers,
special programs, and partnerships are
relected on the ADBI website in an
accurate and timely manner.
he coordination o Research andCB activities was strengthened in
2012 through more jo int pro jects
and by involving both departments
in all phases o these joint projects.
For example, the joint Research and
CB project, Strengthening ASEAN
ransitional Economies, will include
research and CB components in all
phases. For other research projects,
CB is involved in the early stages o
development o such projects to ensurethat their contents are also appropriate
Collaboration within AB and with ABeadquarters
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Collaboration within AB and with AB eadquarters
or CB purposes. Research is also involved indelivering CB activities.
orking with AB eadquarters
ADBI has greatly strengthened its bonds with its parent
institution, ADB, in recent years. Collaboration occurs
at the level o strategic planning, joint ownership
o major studies, and individual activities. Formal
contact points have been appointed in ADBI and
departments at ADB HQ to establish more structured
communications. ADBI sta have served as peerreviewers o ADB projects.
Strategic planning. All ADBI medium- and long-
term planning is carried out in close consultation
wi th the ADB Board and management and wi th
the knowledge departments and, where relevant,
operations departments at ADB HQ. Beore launching
a major initiative, ADBI consults extensively with
relevant departments at ADB HQ to ensure that
the strengths o the two institutions can be used to
maximum advantage. In addition, ADBI conductsan annual consultation exercise with ADB HQ to
ensure that any variations in the work program are
communicated. Also, ADBI provides input when ADB
departments launch work programs. All ADBI projects
in the three-year rolling work program are reviewed
and commented on by ADB departments beore the
work program is submitted to the Board. he ADB
chie economist is a member o the ADBI Advisory
Council and gives advice and recommendations on the
strategic directions and work programs o ADBI and
on potential synergy with ADB.
Major studies. he ADBI lagship project, ClimateChange and Green Asia, is a joint project with ADB
HQ, with the Regional and Sustainable Development
Department taking the lead in Manila. Other major
ADBI projects being carried out with ADB include:
AS EA N , the Peoples Republic o China, and
India: he Great ransormation? (with numerous
departments); ASEAN 2030: oward a Borderless
Economic Community, and Supporting Equitable
Economic Development in ASEAN: A Project Focused
on Cambodia, Lao PDR, Myanmar, and Viet Nam
(both primarily with the Southeast Asia Department);Pacifc 2030 (mainly with the Pacifc Department); and
Disaster Risk Management in Asia and the Pacifc (with
the Regional and Sustainable Development Department).
Individual activities. ADBI continued to work
closely on research and capacity building activities and
knowledge products with various departments at ADB
HQ during 2012. During the year, ADBI collaborated
with the Economics and Research Department, Oce
o Regional Economic Integration, Private Sector
Operations Department, Regional and SustainableDevelopment Department, Strategy and Policy
Department, and regional departments.
esults ramework
ADBI adopted the recommendation in the special
evaluation study o the institute that it should develop
a results ramework, which it has developed in close
coordination with knowledge departments at ADB
HQ. (see p. 5).
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In 2012, ADBI collaborated with global
and regional organizations, government,
public agencies, think tanks, universities,
and other knowledge partners. his
broadens ADBIs understanding o
development issues, raises the quality o
its research and CB activities, widens
its outreach, and enhances the impact o
its activities. Examples o activities ADBIconducted in 2012 with external partners
include the ollowing.
t ADBIOECD Conerence on Services
rade in Selected Sectors: Audiovisual
Services, Higher Education, and
Financial Services (January 2012)
with OECD; and Indian Council or
Research on International Economic
Relations, India
t he 2nd ADBI-OECD Roundtableo n L a b o r M i g r a t i o n i n A s i a :
Managing Migration to Support
Inclusive and Sustainable Growth
(January 2012) with OECD
t OECDADBI 12th Roundtable
on Capital Market Reorm in Asia
(February 2012) with OECD
t ADBINEAR Jo int Conerence:
Lessons rom JapanIs Japan Koreas
Future? (March 2012) with NorthEast Asia Research Foundation,
Republic o Korea
t ADBIPRI Conerence: Achieving
Financial StabilityLessons rom the
Eurozone Crisis or Macroeconomic
and Financial Stability (March 2012)
with Policy Research Institute o
Japans Ministry o Finance
t 8th Mic ro inance ra in ing o
ra ine r s : A B l ended Dis tance
Learning Course (April 2012) withWorld Bank, US
Working with Other Knowledge Partners
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orking with ther nowledge artners
9
ADBI Partners
International organizations: International Monetary Fund (IMF); Organisation or Economic Co-operation and Development (OECD),
includingits Task Team on South -South Cooperation; WorldBank, includingits Tokyo Development LearningCenter; World Trade
Organization (WTO); European Bank or Reconstruction and Development (EBRD); Inter-American Development Bank
Regional organizations: Asia-Pacifc Economic Cooperation (APEC), includingits Business Advisory Council andits Secretariat;
Association o Southeast Asian Nations (ASEAN), includingits Secretariat; Network oAsian River Basin Organizations (NARBO); Mekong
Institute.
National government agencies: Australian Agency or International Development (AusAID); Bank oItaly (Representative Oce
in Tokyo); Japan Bank or International Cooperation; Japan Fair Trade Commission (JFTC); Financial Services Agency, Japan; Japan
International Cooperation Agency; Japan Water Agency; Ministry o Finance, Japan
Think tanks, universities, and other knowledge institutions: Australian APEC Study Centre, RMIT University, Australia; Australian
National University; Brookings Institution; Bruegel, Brussels; Cambodia Development Resource Institute; Centre dEtudes Prospectives
et dInormations Internationales (CEPII); Chatham House, UK; Chinese Academy o Social Sciences (CASS); Economic Research Institute
or ASEAN and East Asia, Indonesia; Indian Council or Research on International Economic Relations (ICRIER); Istituto Superiore Mario
Boella (ISMB), Italy; Korea University; ; Myanmar Development Research Institute; National Bureau o Economic Research, US; Peterson
Institute or International Economics; Policy Research Institute, Ministry o Finance, Japan; Politecnico di Torino, Italy.
MOU partners:Australian APEC Study Center at RMIT University; Bruegel, Belgium; Bertelsmann Stitung, Germany; Centre dEtudes
Prospectives et dInormations Internationales (CEPII), France; Chines Academy o Social Sciences -Institute o World Economics and
Politics (CASS-IWEP); Centre or East Asian Studies at Korea University.
t he 8th East Asia op Level Oicials Meetingon Competition Policy and the 7th East Asia
Conerence on Competition Law and Policy (May
2012) withJapan Fair rade Commission (JFC);
and Malaysia Competition Commission
t he 3rd High-Level Pol icy Roundtable on
Internat ional Inves tment Pol ic ie s in As ia :
Responsibility and Sustainability (May 2012) with
OECD; and Asia-Pacifc Financial Development
Center, PRC
t AsiaLatin America : Fo rging a Long-er mPartnership (May 2012) with ADB HQ; and the
IADB
t NBER Japan Project Meeting (June 2012) with
National Bureau o Economic Research, US;
AustraliaJapan Research Centre, Australia; Columbia
University, US; and University o Chicago, US
t Asia-Paci ic Fo rum on Fi nancial Inclusion:
Ap proaches, Regulations, and Cross-Border
I s sue s ( June 2012) w i th APEC Bus ines s
Advisory Council; and Asia-Paciic Finance and
Development Center, PRC
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10
t Managing the WO Accession Process: Strategies,
Challenges, and Practices (July 2012) with ADBHQ; AsiaPaciic Finance and Development
Center (AFDC); World Bank, US
t ADBIIADB Seminar: Shap ing th e Future o
the Asia and the PaciicLatin America and the
Caribbean Relationship (July 2012) with Inter-
American Development Bank, US
t Future o the World rading System: Asian
Perspectives (August 2012) with World rade
Organization
t ADB IWor ld Ba nk Ro un dt abl e on Reg iona l
Commodity Exchange Market Integration in Asia(September 2012) withWorld Bank, US
t S u b - r e g i o n a l W o r k s h o p o n M i l l e n n i u m
Development Goals or Central and East Asia
(September 2012) withADB HQ; United Nations
Development Programme (UNDP); and United
Nations, Economic and Social Commission or
Asia and the Pacifc (UNESCAP)
t Adjusting the World to the New Realities o the
International Financial System (October 2012)
with Reinventing Bretton Woods Committee, US
t AsiaLatin American and the Caribbean High Level
Economic Policy Forum - AsiaLatin America:New Engines o Growth o the Global Economy?
(October 2012) withADB HQ; and IADB
t PPP inrastructure DevelopmentBasics or
Negotiation (November 2012) with the Center
o r F i n an c i a l , E c o n o m i c , an d B an k i n g
Studies, France; and AsiaPaciic Finance and
Development Center, PRC
t 7th NARBO IWRM rainingSolutions to Water
Sector Issues through IWRM: Te Mahaweli River
Basin Experience (November 2012) with ADB
HQ; Japan Water Agency; and Network o AsianRiver Basin Organizations
The seminar Adjusting the orld to the New ealities of the nternational inancial ystem provided insight on the eurozone
crisis the regional cooperation responses and the implications of the crisis for regional cooperation in Asia.
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orking with ther nowledge artners
11
Networking
In 2012, ADBI continued to strengthen external
knowledge partnerships and disseminate knowledge
on development issues. Under the ADBI Visiting
Researcher Program, three visiting researchers
and ellows rom the Asia and Paciic region each
spent up to 6 months at ADBI. ADBI continued
to communicate with ormer visiting ellows and
researchers to inorm them o ongoing ADBI activities
and to inquire about the status o their ADBI working
papers and the outreach activities that they conductedor their research papers. ADBIs database o visiting
ellows, researchers, and scholars is being used to
strengthen its network o alumni and riends o ADBI.
ADBIs e-newsline and e-notiication services as well
as its Facebook and witter accounts are also used to
strengthen contacts with alumni o Research and CB
events.
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he Research Department addresses
sal ient economic and social issues
pertaining to ADB developing member
countries. For 2012, these included the
ongoing European sovereign debt and
banking crisis and its implications or
Asian countries and international trade
and investments. Other key issues and
research areas were examined in line
with the three ADBI priority themes:inc lus ive and sus ta inable growth;
regional cooperation and integration; and
governance or policy and institutions.
Te ollowing section highlights the fve
crosscutting themes projects and six new
projects that were launched in 2012, as
well as various events and publications.
ngoing rojects withCrosscutting Themes
Climate Change and reen Asia
his lagship project examines how
Asias emerging economies can respond
to increasing demand or low-carbon
development and introduce proactive
policies to strengthen green growth
practices in developing Asia. he studyhas also helped create a network o
institutions that can draw on each others
expertise in promoting green economic
development. he studys indings will
be directly relevant to the policymaking
and investment communities, and it will
make important contributions to regional
policy cooperation or low-carbon green
growth. he study is being implemented
jointly with ADBIs Capacity Building
and raining Department (CB), ADBdepartments, particularly the Regional and
esearch
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esearch
1
Sustainable Development Department, and severalAsian think tanks. Te project organized our events in
2012.
One such event, Beyond Nimbyism: Towards Integrated
Reforms for Financing Green Growth , ocused on
reorm measures to accelerate green growth and the
development o policy tools that catalyze investment
in climate change mitigation, adaptation, and green
technology.
AEAN the eoples epublic of China andndia: The reat Transformation?
his study examines in detail key development issues
aecting member countries o the Association o
Southeast Asian Nations (ASEAN), the Peoples
Republic o China (PRC), and India; and their role
in, and impact on, the regional and global economies.
he indings will provide policymakers with national
and regional medium- to long-term policy and strategy
rameworks or achieving a balanced, sustainable,
and resilient development process. he studys ocus
is on maximizing the potential o Asias key emergingeconomies while minimizing negative externalities by
ostering integration and cooperation. his study is
being implemented jointly with ADB departments.
Te project organized three events in 2012.
nternational onetary and inancial
ystemAsian erspectives
his project ocuses on issues related to reorms o
the international monetary and inancial system that
can support the development o Asian economies,
including institutional eorts to promote greaterregional monetary cooperation and exchange rate
coordination; new international reserve instruments;
and increasing the voice o Asian economies in global
inancial institutions. Several components o this
project are being implemented jointly with other think
tanks.
AEAN 200: Toward a Borderless Economic
Community
he aim o the study is to analyze aspirations and
challenges or ASEAN as the region moves alongthe next two decades o development. It deines the
vision o a RICH ASEANa Resilient, Inclusive,Competitive, and Harmonious regionby 2030.
In line with this vision, the study will oer an
inormative, technical, and detailed view o the main
challenges and the policy reorms and institutional
developments required, at both national and regional
levels, to bring them to higher income levels and to
improve the quality o lie o their citizens. Tis project
is being implemented jointly with the ADB Southeast
Asia Department and the ASEAN Secretariat. he
project organized two events in 2012.
3DFLF,VODQG(FRQRPLHV
Te aim o this study is to provide strategic directions
to Paciic island economies, their governments, civil
society, and business communities on approaches
to development. he study will deine the increased
economic interdependence o the Pacifc with East and
Southeast Asian countries and include a component
ocused on the long-term implications or Paciic
island economies o the development o inormation
and communication technologies. Tis project is being
implemented jointly with the ADB Pacifc Departmentand in collaboration with several development partners,
including the Australian Agency or International
Development and the World Bank. his project will
be continued in the 20132015 work program. he
project organized one event in 2012.
New rojects with CrosscuttingThemes
Connecting outh Asia and outheast AsiaTis new agship project, in collaboration with ADBs
South Asia and Southeast Asia Departments, will
analyze how closer regional connectivity and economic
integration between South Asia and Southeast Asia
can beneit both subregions, with a ocus on the
role played by physical inrastructure and public
policies in acilitating this process. It will examine
major developments in South AsiaSoutheast Asia
economic cooperation, the role o economic corridors,
and regional cooperation initiatives. By virtue o its
strategic location straddling South Asia and SoutheastAsia, the recent opening up o Myanmar in political,
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ear in eview 2012
14
economic, and inancial terms presents a signiicant
new opportunity or enhancing these integration
eorts, with the promise o substantial gains or both
regions. his is particularly the case or land-based
transportation, such as highways and railroads, as
well as energy and inormation and communications
technology inrastructure. Te ocus is on connectivity
in a broad sense, covering both hardware and sotware,
including investment in inrastructure, investment
inancing and inancial development, energy trading,
trade acilitation, and support o national and regionalpolicies. his study will provide: (i) an assessment o
sectors with the potential or signifcant benefts rom
cooperation; (ii) specifc policy options at the regional,
subregional, and country levels to realize those benefts;
and (iii) the dissemination o the fndings to public and
private stakeholders through a senior policy seminar,
publication o the interim, fnal project reports and an
edited book, and media outreach. Te project held an
inception meeting in 2012.
isaster isk anagement in Asia and the3DFLF
Countries in the Asia and Pacifc region are particularly
exposed to natural disasters. O the ten major natural
disasters with the highest death tolls since 1980, seven
have occurred in the developing countries o Asia. In
addition to the human lives lost, the average annual
direct economic cost related to property destroyed
in natural disasters in the region rom 2002 to 2011
is conservatively estimated at $65 billion. Including
indirect economic losses associated with disruptions
to the wider national and regional economies throughinterruptions o production networks and supply
chains, loss estimates would increase by a signiicant
margin.
Tis study, in collaboration with ADBs Regional and
Sustainable Development Department, aims to reect
the changing and rising trends o natural hazards and
disasters in the region, as well as to better assess human
and economic losses due to disasters, evaluate national
DRM strategies and policies and regional rameworks,
and make appropriate local, national, and regional level
recommendations. Te project organized three events,including an inception meeting, in 2012.
The uture of the orld Trading ystem:
Asian erspectives
he world trading system is undergoing undamental
changes because o the rise o emerging economies
such as the BRICs (Brazil, Russia, India, PRC), which
are expanding trade and investment globally. New
perspectives rom Asia, whose economic importance is
growing rapidly, can help acilitate an orderly transition
and sustain trade-led growth or all economies involved.For instance, an increasing share o Asias trade consists
o intermediate goods and services that pass through
dierent economies and industries beore being
assembled into fnal products. Such global production
value chains substantially alter how economies interact
through trade. International rules and institutions or
trade can also have proound and lasting eects on
this shit and redefnition o trade relationships. In the
absence o a WO Doha deal, the spread o ree trade
agreements (FAs) in Asia has implications or the pace
o trade liberalization, the consolidation o regionaltrade rules, and the compatibility between global and
7KHVHVVLRQ*URZWKDQG5HJLRQDO&RRSHUDWLRQDQG,QWHJUDWLRQLQ$VLDDQGWKH3DFLFLQDQG%H\RQGDW$'%,V$QQXDO
Conference 2012 took stock of recent developments in regional integration and assessed policy choices for sustainable
growth.
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regional trade rules. Finally, ollowing the 2008 global
inancial crisis and amid the ongoing eurozone crisis,
protectionist tendencies are also on the rise in some
economies. Tis new project aims to undertake a broad
and comprehensive examination o these key changes
occurring in the world trading system and their policy
implications or Asia. he project held an inception
meeting in 2012.
Cambodia ao yanmar and
iet Nam roject: trengthening AEANTransitional Economies
his project, in collaboration with ADBs Southeast
As ia De partme nt , wi ll con du ct policy- or ien ted
economic research and CB programs to support the
economic growth and social development o Cambodia,
Lao PDR, Myanmar, and Viet Nam, which have been
identifed in ADBIs ASEAN 2030 study as ASEANs
most dynamic economies or the next two decades, but
also those requiring more assistance rom international
partner agencies in terms o policy-oriented research
and capacity building activities. Te project carried outa training course in Bangkok in 2012.
egional Cooperation andntegration
Asiaatin America Economic Ties
his study o economic ties between the Asia and
Paciic region and Latin America and the Caribbean
aims to bolster the economic relationship between
the two regions and to analyze the catalytic role o the
two regional development banks, ADB and the Inter-
American Development Bank (IADB). It analyzes
patterns o trade and investment lows, the spreadand depth o interregional ree trade agreements, and
orms o bilateral and multilateral cooperation. he
projectjointly implemented by ADBI, ADBs Oce
o Regional Economic Integration, and IADB
ormed the basis o a high-level dialogue between the
Presidents o ADB and IADB at the annual meetings
o both banks in 2012. Te project held six events in
2012. Tis project will be continued in the 20132015
work program.
ey changes taking place in global trade were discussed by participants at the workshop uture of the orld Trading ystem:
Asian erspectives.
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One such event, Asia-Latin America: New Engineso Growth o the Global Economy?, examined how
Asia and Latin America economic ties have deepened
in the last ten years, contributing to growth and
poverty reduction in both regions. hese economies
demonstrated great resilience and rapid recovery ater
the 2008 global inancial crisis, and can become the
new drivers o the world recovery.
utputs
Four books and 26 working papers were publishedunder this theme in 2012, including the ollowing.
Inrastructure or Asian Connectivity is a ollow-up
volume to Inrastructure or a Seamless Asia. his
book addresses the prospects and challenges concerning
both sot and hard inrastructure development
in Asia and provides a ramework or achieving
Asian connectivity through regional inrastructure
cooperation.
Shaping the Future o the Asia and the Pacifc-LatinAmerica and the Caribbean Relationship.Economic
ties between Asia and Paciic and Latin America and
the Caribbean (LAC) have reached a turning point.
In a mere decade, Asia has become the LACs second-
largest trading partner. Tis dynamic trade relationship
has boosted the LACs strategic and economic
importance to Asia. In its our chapters, the book
identiies the challenges and opportunities in each o
these pillars while drawing attention to the beneits
o balancing their development. his report is one o
the most downloaded books on the ADBI website andrepresents a collaborative eort by ADBs Oice o
Regional Economic Integration, ADBI, and IADB.
Regional and Global Monetary Cooperation
evaluates regional and global monetary cooperation,
ocusing on inancial saety nets, with a view toward
developing recommendations or more eective
cooperation, especially between the International
Monetary Fund (IMF) and regional inancial
arrangements. his paper, by Mario Lamberte and
Peter Morgan, argues that a global inancial saetynet (GFSN) should have adequate resources to deal
with multiple crises, be capable o a rapid and exibleresponse, and not be encumbered by historical
impediments such as the IMF stigma that would limit
its acceptance by recipient countries. Oversight o
a GFSN needs to be based on cooperation between
global and regional orums, or example, the G20 and
ASEAN+3, or the East Asia Summit.
As ia-Lat in America Free rade Agreements : An
Instrument or Inter-Regional Liberalization and
Integration? his paper, by Ganeshan Wignaraja,
Dorothea Ramizo, and Luca Burmeister, uses newcriteria to examine whether Asian-Latin American
FAs have acilitated market-led integration by
liberalizing trade and behind the border regulatory
barriers in 20 AsianLatin American FAs in eect
in 2012. he evaluation o agreements suggests
that progress has been made in reducing trade and
regulatory barriers using FAs, but more needs to
be done in uture FAs to solidiy and expand the
process o deep integration between the two regions.
raditional areas like goods and services are typically
well covered in inter-regional FAs. he paper alsonoted several challenges with existing AsianLatin
American FAs including insuicient depth in some
agreements, variable rates o FA used by business, and
the risk o a noodle bowl eect.
Te Peoples Republic o Chinas High-ech Exports:
Myth and Reality, by Yuqing Xing, argues that the
PRCs leading position in high-tech exports is a myth
created by outdated trade statistics that are inconsistent
with trade based on global supply chains. Current trade
statistics mistakenly credit entire values o assembledhigh-tech products to the PRC, thus greatly inlating
its exports. In 2009, the PRCs value-added accounted
or only about 3% o the total value attributed to its
exports o iPhones and laptop personal computers.
Tis paper suggests that a value-added-based approach
should be adopted to accurately measure high-tech
exports. Furthermore, i assembly is the only source o
the value-added generated by PRC workers, then in
terms o technological contribution, these assembled
high-tech exports are no dierent rom labor-intensive
products, and so they should be excluded rom thehigh-tech classifcation.
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Institutions or Asian Integration: Innovation andReorm, by Giovanni Capannelli and See Seng an,
is based on an ADB study completed in 2010. his
paper reviews literature on the design and development
o institutions or Asian regionalism and discusses the
uture needs or innovation and reorms o the regional
institutional architecture having in mind the creation
o a regional economic community. Te paper ollows
the taxonomy o institutions or regionalism adopted
by the ADB study and ocuses on key governance
principles or such institutions by presenting case
studies o principles and institutions that worked anddid not work well in the past. Asias institutions or
regionalism need strengthening through reorm and
innovation such as better governance and resourcing,
greater and more eective participation and delegation
o powers, streamlining o regional architecture,
including the phasing out o outdated or irrelevant
institutions and, where needed, the creation o new
ones.
Lessons o the European Crisis or Regional
Monetary and Financial Integration in EastAs ia, by Ulrich Volz, discusses the causes o the
eurozone crisis and the challenges that Economic and
Monetary Union countries ace in solving it. his
paper highlights fve lessons or regional fnancial and
monetary cooperation and integration in East Asia: (i)
do not rush monetary integration; (ii) rethink costs
and benefts o international fnancial integration; (iii)
develop and strengthen a regional crisis prevention
and resolution mechanism beore the next crisis hits
the region; (iv) reinorce surveillance and monitoring
o East Asian inancial markets; and (v) put in placeadequate resolution procedures and recapitalize banks
switly once the banking system is in trouble.
Revisiting the Internationalization o the Yuan ,
by Yongding Yu,dicusses how, as the worlds second
largest economy, largest trading nation, and the largest
oreign holder o United States government bonds, the
PRC needs a currency with international status that
can match its economic status in the global economy.
Tis paper suggests that beore the internationalization
o the yuan can make meaningul progress, necessaryconditions, such as the existence o deep and liquid
fnancial markets, a exible exchange rate and interestrates responsive to market conditions must be created.
Yuan internationalization should be a natural course
o economic development and capital account
liberalization. o push yuan internationalization in an
artifcial way is counter-productive.
nclusive and ustainable rowth
Five books and 19 working papers were published
under this theme in 2012, several o which are
highlighted below.
Do Exporting Firms in the Peoples Republic o
China Innovate? Tis paper, by Ganeshan Wignaraja,
assesses actors driving irm-level export perormance
in Asias super exporterthe PRC. While early studies
suggest that innovation is important, there has been
little research on opening the black box o technology
at the irm-level in the PRC. he paper undertakes
econometric analysis o innovation, learning, and
exporting in automobiles and electronics frms in the
PRC using a large-scale dataset to identiy the mostappropriate innovation proxy. Drawing on recent
literature on innovation and learning in developing
countries, it tests two alternative proxies: (i) a
technology index to capture a variety o minor activities
involved in using imported technologies eiciently;
and (ii) the research and development to sales ratio,
which represents ormal technological eorts to create
new products and processes, oten at world rontiers.
Climate Change in Asia and the Paciic: How
Can Countries Adapt? Edited by VenkatachalamAn bu mo z hi , Me in h a rd Br e i l i ng , Se l v a r a j ah
Pathmararajah, and Vangimalla R. Reddy, this book
compiles policies and best practices on climate
change adaptation, ocusing on the structural and
nonstructural measures applied in the Asia and
Paciic region to adapt to climate change. From
environmental, social, and economic perspectives, the
most vital sectors or the region are agriculture, and
water and natural resource management. Although the
book targets the Asia and Pacifc region, key fndings
are relevant to other regions, such as Arica and LatinAmerica.
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Asias Wicked Environmental Problems, by StephenHowes and Paul Wyrwoll, considers our major
environmental challenges that policymakers across
developing Asia will need to address toward 2030:
water management, air pol lution, deorestation and
land degradation, and climate change. his paper
contends that these challenges, each unique in their
own way, exhibit the characteristics o so-called
wicked problems. Detailed case studies illustrate the
complexity and signiicance o Asias environmental
challenges, and also their nature as wicked problems.
here will be no easy or universal solution toenvironmental problems across Asia.
Europes Debt Crisis, Coordination Failure, and
International Eects, by Stean Collignon, gives an
overview o the causes o the European debt crisis
and the consequences or external relations. his
paper inds that political mishandling has increased
uncertainty, which has contributed to a tendency or
the euro to become weaker. Europes debt crisis is in
reality a political crisis. Te eurozone economy is ully
integrated by the act that the European Central Bankalone sets monetary budget constraints on domestic
economies, but the political heterogeneities and
dierent member state jurisdictions prevent economic
policies that are consistent with the requirements o a
single currency.
How Should We Bank with Foreigners?An
Empirical Assessment o Lending Behavior o
International Banks to Six East Asian Economies,
by Victor Pontines and Reza Y. Siregar, examines the
inluence o critical determinants not only to overallinternational bank lending to six selected Asian
countries, but also to cross-border bank lending.
One inding showed that cross-border lending by
international banks tends to pull out rom host
economies during dicult times in source economies,
whereas such ret renchments are not evident on an
aggregated basis. Tis suggests that encouraging brick-
and-mortar aliates o international banks to set up
shop in recipient economies may be the judicious
choice or these economies. his paper also examines
the dierences between subsidiaries and branches ointernational banks in terms o their ability to shield
themselves rom the inancial diiculties o theirglobal parent banks. he results show that oreign
bank subsidiaries are more capable in this regard. Tis
inding carries with it the attraction o avoring an
organizational banking structure that is biased toward
subsidiaries.
overnance for olicies andnstitutionsCurrency nternationalization: essons and
rospects for the BTe PRCs high economic growth over the past several
decades and its increasing economic integration with
other countries have led to a signiicant increase in
its importance in the global economy. Tis raises the
question on the kind o role the renminbi (RMB) will
play in international trade and inance. Indeed, over
the last decade, the PRC has embarked on a number
o initiatives to raise the status o the RMB in the
international monetary system. For instance, the PRC
began issuing RMB-denominated notes, bonds, and
unds in Hong Kong, China. Tese and other measureswill greatly accelerate the internationalization o the
RMB. his new project, in collaboration with ADBs
Economics and Research Department and Oice o
Regional Economic Integration, aims to examine the
extent and pace o RMB internationalization and
how the experiences o other important international
currencies can provide guidance and lessons on the
likely path and prospects o RMB internationalization.
It studies the implications o a greater role o the
RMB or international trade, investment and fnancial
transactions or the PRC economy, its neighboringand distant economies, and the global coniguration
o major reserve currencies, most especially the RMBs
potential challenge to the supremacy o the US dollar
in the international monetary system.
utputs
Five working papers were published under this theme
in 2012, including the ollowing.
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Developing Asias Pension Systems and Old-AgeIncome Support, by Donghyun Park and Gemma
Estrada, provides a broad overview o the state o
pension systems in eight selected Asian countries;
analyzes the pension systems; and identiies their
major structural weaknesses. his paper suggests
pension reorm can reinorce and speed up reorm in
other areas. Pension reorm can also serve as a catalyst
or healthcare reorm because old-age income and
healthcare are vital components o the well-being
o retirees. he paper concludes with speciic policy
directions or pension reorm to strengthen the capacityo Asian pension systems in delivering economic
security or Asias large and growing population o
elderly.
he Peoples Republic o China and Global
Imbalances rom a View o Sectorial Reorms, by
Hiro Ito and Ulrich Volz, examines the impact o
sectorial reorms on current account imbalances, with
a special ocus on the PRC. his paper argues that
domestic fnancial liberalization has a negative impact
on the current account balance among developingor emerging market economies. Moreover, domestic
fnancial reorm aects national saving and investment,
which in turn aects the current account balance. Te
paper also provides evidence that reorms relating to
the inancial sector and social saety and healthcare
aect both saving and investment as well as the current
account o the PRC, the worlds largest current account
surplus country.
Implications o the Global Financial Crisis or
Financial Reorm and Regulation in Asia examineshow the 19971998 Asian fnancial crisis highlighted
shortcomings in Asian inancial markets, notably the
underdevelopment o domestic bond markets and
deiciencies in corporate governance, transparency,
and inancial regulation. Since then, Asian inancial
markets have made considerable progress. Edited by
Masahiro Kawai, David Mayes, and Peter Morgan,
this book highlights the challenges imposed by the
2008 global inancial crisis(i) preventing inancial
crises; (ii) responding to inancial crises when they
occur; (iii) managing international capital lows; and(iv) deepening and integrating inancial markets to
provide an alternative source o unding to oreigncapital owsand suggests policy recommendations to
address them.
Central Banking or Financial Stability in Asia, by
Masahiro Kawai and Peter Morgan, reviews the recent
literature on this topic and identiies relevant lessons
or central banks, especially those in Asias emerging
economies. Tis paper examines the debate about the
deinition o inancial stability; the consistency o a
inancial stability objective with the more traditional
and well-established central bank objective o pricestability; the appropriate governance structure or
coordination o macroprudential policy with other
fnancial supervisors and entities; and the appropriate
policy instruments to achieve macroprudential policy
objectives, including conventional, unconventional,
and macroprudential tools. he lean versus clean
debate has been resolved, largely in avor o the ormer,
and central banks should have a inancial stability
mandate and the policy tools to successully pursue
that mandate.
eminars
wenty-three seminars were held in 2012, attended
by leading scholars and policymakers to discuss a
wide range o issues. In addition, two brown bag
lunch seminars were held at ADBI, which provided a
platorm or presenting preliminary research ideas and
indings to solicit comments rom ADBI sta. wo
seminars are highlighted below.
Changing Myanmar: Challenges and Opportunitiesdiscussed the recent changes, as well as the economic
development and opportunities or business in
Myanmar as the country transitions to a more open
and dynamic economy.
What Next or Doha and WO? Guest speaker WO
Deputy Director General Alejandro Jara acknowledged
that the WO cannot address news rules that beit
a signiicantly changed trading system without irst
concluding the Doha Development Agenda. Te WO
must address a new agenda on investment rules, exportduties, and other regulatory issues.
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ADBIs Distinguished Speaker Seminar Series brings
eminent persons to ADBI to encourage debate
among policymakers, researchers, academics, think
tanks and other audiences interested in economic
development challenges in Asia and the Paciic. In
2012, 13 prominent scholars delivered seminars on
various subjects, including the ollowing.
The even lobal istortions: mpact on AsiaAndrew Sheng, President
o t h e F u n g G l o b a l
Institute, talked about the
emerging issues and policy
challenges o interest to
policymakers in the Asia
and Paciic economies. In
particular, he described
how the new normal is
not perect markets, but
massive global distortions. he global distortionsaggravate social inequality and instability. Sheng
highlighted the need to move out o short-termism,
toward long-term sustainability and public good.
Eurozone overeign ebt Crisis: Current
and istorical erspectives
Gianni oniolo, research proessor o economics
and history, Duke University, North Carolina; and
Daniele Franco, managing director o Economics,
Research and International Relations o Banca
dItalia, spoke on the causes o the eurozone crisisand possible solutions and policy responses. oniolo
said that although historyin particular Germanys
recession in the 1930sis a guide in understanding
the sovereign debt crisis in Europe and US, there are
notable dierences. Franco said defcits are expected
to decline in the eurozone in 2013, and the fnancial
conditions in the eurozone will become more stable
than in Japan and the US. But problems remain,
such as a lack o enorcement authority o EU rules.
Greater economic coordination, correcting macroimbalances, and enorcement o rules will help ensure
survival o the eurozone.
emystifying the Chinese Economy
Ju stin Yiu Lin , chie
economist and senior vice
president o the World
Bank, challenged many
tenets o conventional
n e o c l a s s i c a l t h e o r y
and showed how naveapplications o many o its
principles had catastrophic
consequences or many
transition economies. He provided a ramework to
analyze the causes behind those dramatic changes
and drew lessons or other developing countries rom
the Chinese experience o rapid economic rise in the
last three decades.
ill the Euro Celebrate ts 14th Birthday?
The resent E Economic ituation with apecial eference to taly
Carlo Filippini, proessor
o economics, Bocconi
University, Milano, spoke
about the economic and
iscal crisis in Europe,
with part icular reerence
to Italy. He said that the
disappearance o the euro
is unlikely because the
economic cost would be
istinguished peaker eminars
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too high. Deeper integration and a ull fscal union
will be the inal outcome or the EU. Although
the prevailing solution is a combination o iscal
restraint and a more rigid stability and growth pact,
Filippini stressed that structural reorms are required
in many countries including Italy. Ater many years
o low productivity and a high debt to GDP ratio,
Italy is pursuing a dicult path o austerity, growth,
and equity.
lexible Exchange ates for a table orldEconomy
Joseph Gagnon, a senior
e l low at the Peterson
Institute or International
Economic s , spoke on
lexible exchange rates or
a stable global economy.
Gagnon argued that using
monetary policy to ight
exchange rate volatility,
including through theadoption o a ixed exchange rate regime, leads
to greater volatility o employment, output, and
ination. In other words, the cure or exchange rate
volatility can be worse than the disease.
Carry Trades nterest ifferentials and
nternational onetary eform
R o n a l d M c K i n n o n ,
the Wil l iam D. Eberle
Proessor o International
Economics at StanordUniversity, said that the
US F e d e r a l Re s e r v e s
reduction o the interest
ra te on ede ra l unds
t o v i r t u a l l y z e r o i n
December 2008 (ollowed
by major European central banks) exacerbated
the wide interest rate dierentials with emerging
markets and provoked global monetary instability
by inducing massive hot money outlows into Asia
and Latin America. Speculative money ooding into
emerging markets by carry traders caused local
currencies to be overvalued. o prevent currencies
rom appreciating, emerging market central banks
intervened to buy dollars. With persistent carry
trades, however, emerging market central banks were
orced to keep intervening to prevent unlimited
appreciation. Te sharp buildup o emerging market
oreign exchange reserves, too big to be ully oset
by domestic monetary sterilization, resulted in
the loss o monetary control in emerging markets
and led to inlation that was generally higher thanthat in developed market economies. Reorm must
ocus on international monetary harmonization
that limits interest rate dierentials, while accepting
the need or exchange rate buers, such as capital
controls. However, i interest rate dierentials are
too wide, capital controls will ail. Mature industrial
economies, led by the US, would have to abandon
the current monetary policies which set interest rates
near zero.
essons for the Eurozone from AsiaO l a r n C h a i p r a v a t ,
ad v i s o r t o th e P r im e
Minis te r o hai land,
Pres ident o hai land
rade Representative, and
a ormer deputy prime
min i s te r o ha i l and ,
said that in analyzing the
European inancial crisis,
Asias experience with the
1997 Asian inancial crisis serves as a useul point oreerence. hailand, along with Indonesia and the
Republic o Korea, accepted an IMF-imposed austerity
program and did badly as compared to Malaysia, which
rejected the IMFs prescription. he experience o
crisis-hit Asian economies led to a change in thinking
about the productiveness o straight austerity
programs. he relaxation o austerity stances and
implementation o pro-growth policies in combination
helped Asia recover rom its inancial crisis. Drawing
rom the Asian experience, the same IMF pain
or gain austerity solution or Greece cannot work
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because Greece does not have a currency to devalue. o
resolve the eurozone crisis, not only must all eurozone
countries pursue pro-growth policies, Asia and the
rest o the world, including the PRC and Japan, must
switch rom austerity, or anti-inlationary stances, to
pro-growth policies.
The New Continentalism: Energy and
Twenty-irst Century Eurasian eopolitics
Kent Calder, director o
the Edwin O. ReischauerCenter or East Asia Studies
at SAIS and director o the
Japan Studies Program at
SAIS, argued that a new
transnational confguration
is emerging in continental
Asia, driven by economic
growth , r i s ing ene rgy
demand, and the erosion o longstanding geopolitical
divisions over the past generation. What Calder
calls the New Silk Roadwith a strengtheningmultiaceted relationship between Northeast
Asia, on the one hand, and the Middle Eas t and
South and Central Asia on the other at its core
could emerge as one o the worlds most signifcant
multilateral conigurations, although likely in
a much less ormalized ashion than traditional
regional arrangements. Te New Silk Road could be
important in cushioning the impact o geopolitical
change in Central Asia, with the role o multilateral
development institutions highly re levant in
determining the ultimate developmental path o theNew Silk Road nations.
Toward a New
Capitalism
M u h a m m a d Y u n u s ,
chairman o the Yunus
C e n t r e , o u n d e r o
G r a m e e n B a n k , a n d
Nobel Peace Prize winner,
argued that poverty is not
created by the poor, but
rather it is imposed on the poor by a aulty system.
hereore, to eradicate poverty, the aulty system
and the institutions that make up the system have
to be ixed. Some o the most important o these
institutions are those oering fnance. Tis is because
ensuring that the poor have access to inance is at
the heart o eradicating poverty. However, banks
operate in a paradoxical way, lending money to
people who already have a lot o money, but not to
people who do not have money, believing that poor
people have limited means to repay loans. It is thedeep conviction that this conceptual ramework or
inance is wrong which led to the ounding o the
Grameen Bank in Bangladesh. he establishment
o the microinance institution demonstrated that
the scope o business could be widened to combine
two kinds o businessesone or making money
and another or solving problems. Tese businesses,
called social businesses, are sel-ueling engines
whereby activities become sel-sustaining. Although
charities can be eective on occasions, they ace
limits as charitable unds need not readily replenishthemselves. It is within the peoples power to make
unemployment and poverty obsolete eatures rom
the past. However, to succeed, it is necessary to
redesign the economic system in a way that has yet
been thought o beore and social businesses may be
one step in that direction.
ld ssues and New rontiers: Non-
tariff easures in
nternational Trade
P a t r i c k L o w , c h i e economist at the World
rade Organization, said
taris have become less
important in international
t rade whi l e a t t en t ion
is shiting to non-tari
measures (NMs). hese
measures raise complex challenges or international
trade and trade policy cooperation. Tese challenges
arise rom identifcation and measurement problems,
the scope or using public policy interventions
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as a means o unduly restricting trade, and the
administration o NMs. In addition, emerging
public policy concerns in new areas are likely to lead
to new amilies o NMs.
The ise of Asia and
the New orld rder
D a l e W . J o r g e n s e n ,
the Samual W. Morris
University Proessor at
Harvard University, saidthat the global economy is
undergoing a undamental
change. Despite concerns
o v e r s l o w i n g g r o w t h
in the PRC, India, and Japan, and the possible
dissolution o the eurozone, global economic growth
is accelerating. How can this paradox be explained?
I the global economy is shiting toward the more
rapidly growing economies, then the worlds growth
rate would shit toward the growth rates o the more
rapidly growing economies. Tus, even i the growthrates o the PRC and India were to slow, global
growth, which is considerably lower than that o
both countries, would accelerate. he growth rate
would lead to a new world order associated with
more rapidly growing countries such as the PRC
and India, which are going to have a larger share o
the global economy. Te PRC overtook Japan as the
worlds second-largest economy in 2010. However,
the World Bank noted that this milestone had been
reached in 2005 in current purchasing price parity
(PPP). In terms o PPP, India will overtake Japan in2012 and the PRC will overtake the US in 2017. Te
US has been the worlds leading economy or more
than a century. Te new world order will look very
dierent in 2020. Asia will boast three o the worlds
our biggest economies. he largest economies in
descending order will be the PRC, US, India, Japan,
Russia, Germany, Brazil and the United Kingdom.
The oad to iscal nion in the Eurozone:
antasy or eality
Paola Subacchi, research
director o international
economics at Chatham
House, argued that iscal
union, and eventual ly
pol itical union, is the
on ly way o rward o r
Europes Economic and
Monetary Union (EMU).D i v e r g e n c e s i n s i z e ,
development, and institutions present the EMU
with the dilemma o policy coordination in which
countries need to bind themselves by a political
ramework in order to respect their commitments
and do not have a clear incentive to deect. As it
is impossible to simultaneously achieve economic
integration, the nation-state, and political democracy,
the citizens o the eurozone will need to choose
which two o these three goals they want to achieve
and maintain.
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he Capac i ty Bu i ld ing and
raining (CB) Department
s t r i v e s t o p ro m o te s o u n d
development management through
enhancing developing member countries
(DMC) senior and mid-level oicials
understanding o important development
issues, identiying policies and measures
to address these issues, assisting them to
implement these policies and measureseectively, and providing venues or
both ormal and inormal dialogues
and communicat ion among DMC
government ocials.
All CB programs ollow one o three
ormats: policy dialogue, course-based
training, and e-learning. Policy dialogues
examine the implications and potential
impacts o contemporary policy issues
on Asian developing economies and seekto expand understanding o possible
responses among policymakers and
other important stakeholders. Course-
based training provides systematic
practical knowledge and skills aimed to
improve the capacity o policymakers in
policy selection, design, execution, and
assessment. E-learning courses use the
internet as a learning tool to maximize
the participation o government ocials
and practitioners in capacity developmentinitiatives.
o ensure quality, relevance, and impact
o CB activities, every CB program
ocuses on one o ADBIs three priority
themes: inclusive and sustainable growth,
regional cooperation and integration, and
governance or policies and institutions.
For each activity, participants are
careul ly se lected to maximize theeectiveness o the program. Special
Capacity Building and Training
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Capacity Building and Training
2
attention is paid to the need or geographic, gender,and background balance and diversity as well as each
participants relevant government work experience
and the participants ability to use the content o the
training program to train othersthereby transerring
the knowledge to a wider audience. All programs are
delivered in English, ADBs ocial language.
In 2012, 23 policy dialogues, six course-based training
programs, and one e-learning course were conducted:
18 on inclusive and sustainable growth, eight on
regional cooperation and integration, and our ongovernance or policies and institutions. From DMCs,
more than 7,500 participants attended the e-learning
course Microinance: raining the rainers, while
1,471 participants attended CB courses/workshops
and policy dialogues in person. Selected programs are
briey described below.
nclusive and ustainable rowth
Eighteen activities were conducted under the theme
o inclusive and sustainable growth. hey addressedcapacity building needs related to labor migration
in Asia and the Paciic region, managing climate
change issues and promoting sustainable economicdevelopment, fnancial inclusion, intelligent transport
systems, river basin management, trade policy,
microinance, skills development, sanitation, and
oreign investment ows.
he Cambodia, Lao PDR, Myanmar, and Viet Nam
(CLMV) program is a direct result o collaboration
between ADBIs two departments: CB and Research.
ADBI is working with CLMV governments on a series
o policy-oriented research activities and capacity
building programs aimed at assisting these countriesto narrow the development gap with other ASEAN
countries. In partnership with the Mekong Institute
o Khon Kaen, Tailand, ADBI conducted the frst o
our training programs in December 2012. he irst
CLMV training program examined opportunities and
approaches to strengthening seed policy and improving
seed industry eciency through lectures, case studies,
feld visits, and group discussions. Over 40 government
oicials rom CLMV countries attended the training
program, including 11 rom Myanmar.
ABs Economics and esearch epartment and AB conducted a workshop in unming C to explore effective
government poverty-reduction policies.
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ear in eview 2012
26
ackling climate change and accelerating green growthis important to achieving sustainable development. At
a stakeholder orum on Climate Change and Green
Asia, senior oicials rom the emerging economies
o Asia examined key issues and challenges in
reducing greenhouse gas emissions without adversely
aecting economic growth. hrough country reports,
presentations, and discussions, this orum assessed
the scope and merit o current pledges and their
progress, and analyzed the interplay o technological,
institutional, market, and management actors in the
dynamics o low-carbon green growth. he indingswill be included in the ADB and ADBI agship study
Climate Change and Green Asia.
A pol icy dialogue on the key indings o the ADB
and ADBI book, Public Policies and Practices or
Low-Carbon Green Growth, brought together senior
oicials rom large carbon-emitting economies o
Asia to discuss key recommendations on renewable
energy and energy eciency policy options as a way to
accelerate low-carbon green growth strategies, including
technology transer issues and inancing options.Strengthening national innovation systems, including
enabling market conditions and intellectual property
regimes, is key to promoting indigenous technologies.
More than 300 participants joined the eighth program
o the Microfnance raining o rainers, a distance
learning course that ran rom December 2011 to
May 2012. he course aimed to (i) strengthen the
institutional capacity o microinance in the Asia
and Paciic region by making high-quality training
access ible to a large number o pol icymakers ,proessionals, and practitioners; and (ii) increase
the number and country coverage o accredited
microinance trainers in the Asia and Paciic region
and around the world. In the 20112012 course, 199
participantsa record numberreceived accreditation
as certiied microinance trainers. Since 2005, a total
o 892 participants rom 55 countries have been
accredited as certiied trainers through the course
implemented in collaboration with the World Banks
okyo Development Learning Center.
egional Cooperation andntegration
he high-level policy dialogue, 12th OECDADBI
Roundtable on Capital Market Reorm in Asia,
attracted more than 75 participants who discussed
the global inancial situation and regulatory reorms,
the integration o Asian inancial markets, the
yuans internationalization, the supervision and risk
management o Asian banks, and other related issues.
At the roundtable Dr. Kiyohiko Nishimura, a deputy
governor o the Bank o Japan, called or cooperationbetween Japan and the PRC on introducing direct
trading between the yen and the yuan to reduce
transaction costs and exchange rate risk, and to
enhance the utilization o the yen and yuan in bilateral
trade and investment. ADBI and OECD plan to
publish the proceedings jointly.
he policy dialogue, Ways Forward or Corridor-
Based ransport Facilitation Agreements in the
CAREC Region, promoted knowledge sharing on
approaches to improving transport acilitation amongthe countries participating in the Central Asia Regional
Economic Cooperation (CAREC) program. CAREC
is developing six international transport and trade
corridors linking the programs ten participating
countries with each other and linking the region
to other markets o Eurasia. he program plans to
complete construction or improvement o about 8,380
km o roads and 5,300 km o railway lines by 2017.
Improvements in sot inrastructure such as transport
acilitation agreements are required to ensure this large
body o investment delivers the highest returns to theregion. Te dialogue, organized in collaboration with
ADBs Central and West Asia Department, acilitated
SouthSouth knowledge exchange among 25 transport
and customs o icials rom CAREC countries ,
exposed oicials to transport acilitation agreement
development and implementation in other regions,
and considered easible approaches to improving cross-
border transport o goods and people in Central and
West Asia.
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Capacity Building and Training
2
overnance for olicies andnstitutions
About 20 gove rnment o i c i a l s i n charge o
microinance and banking regulations rom countries
in the Asia and Paciic region attended the course-
based training program, Best Practice Regulatory
Principles and Proportionate Regulation Supporting
Micro and Small and Medium-Sized Enterprises
Access to Finance . Experts rom ADB HQ, ADBI,
banks, and the Australian reasury discussed regulatory
initiatives and a proportionate regulation rameworkneeded to support micro, small and medium-sized
enterprise inance. Participants also shared their
country experiences and conducted case analysis and
presentations at the end o the training workshop. Te
summary report o the workshop was presented at the
Asia-Pacifc Economic Cooperation (APEC) Financial
Inclusion Forum in June in Shanghai.
ADBI, the Japan Fair rade Commission, and the
Malaysia Competition Commission organized two
meetings on competition law and policy. he 7thEast Asia Conerence on Competition Law and
Policy ocused on cartel practices, such as price-fxing,
bid-rigging, market sharing, and output controls.
Government oicials shared their experiences inidentiying, regulating, and punishing these anti-
competition behaviors and mechanisms. At the
8th East Asia op Level Oicials Meeting on
Competition Policy, recent progress in regulations
and institution building in East Asian countries were
discussed. All participants agreed to conduct an annual
survey on the institutional development o competition
and enorcement policies and to share the survey results
at the ollowing annual meeting.
Since 2009, ADBI, the APEC Business AdvisoryCouncil, and the Asia-Pacifc Finance and Development
Center have organized policy dialogues on inancial
inclusion. More than 80 participants including relevant
government oicials, microinance practitioners,
researchers, and representatives o business and civil
society organizations joined theAsia-Pacifc Forum on
Financial Inclusion: Approaches, Regulations and
Cross-Border Issues. Te policy dialogue ocused on
fve areas: (i) approaches to promote fnancial literacy,
(ii) fnancial identity, (iii) micro-fnance regulation, (iv)
consumer protection, and (v) acilitating cross-bordermicrofnance.
CBT irector r. uqing ing left) instructs participants atan AB workshop on micro small and medium enterprise
QDQFLQJ
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ear in eview 2012
28
The 2012 eveloping Asia ournalism Awards
ADBI established the Developing Asia Journalism Awards (DAJA) in 2004 to recognize and promote excellencein reporting by journalists covering development trends and issues in the Asia and Paciic region. Each
year, hundreds o journalists submit their written work on a speciic topic chosen by ADBI. he theme or
DAJA 2012 was Green Growth or Growth Versus Green. Over 150 articles highlighting the opportunities,
challenges, and solutions being uncovered across the Asia and the Pacifcas the region seeks a path to green
and sustainable growthwere accepted.
wenty-fve articles were selected by a panel o judges and their authors were invited to attend a workshop in
okyo and a feldtrip to Ishinomaki, which was heavily damaged by the Great East Japan Earthquake on 11
March 2011. O the 25 journalists, fve were rom the PRC, two rom Bangladesh, three rom Cambodia, two
rom India, two rom Indonesia, one rom Lao PDR, one rom Myanmar, two rom Nepal, two rom Pakistan,
three rom the Philippines, one rom the Solomon Islands, and one rom ajikistan.
Te workshop highlighted key environmental challenges and opportunities acing the Asia and Pacifc region.
Selected journalists introduced their articles and approaches to environmental issues in their respective home
countries. opics discussed included the science o climate change, the impact o climate change on Asia,
responses to climate change by governments, communities, and businesses, and inormation resources on
climate change. Te feld trip to Ishinomaki ocused on the citys recovery eorts and the environmental impact
o the disaster. An awards ceremony at ADBI concluded the event.
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Capacity Building and Training
29
&OLPDWH&KDQJHLQ$VLDDQGWKH3DFLF+RZ&DQ&RXQWULHV$GDSW"
Climate change is widely regarded
as one o most serious challenges
the developing countries o Asia
ace, and adapting to it is an urgent
requirement or the most vulnerable
sectors. TeWorkshop on Agriculture
Adaptations to Climate Change ,
organized in collaboration with the
Asian Productivity Organization andthe hailand Productivity Centre,
examined the key risks posed by
climate change on agriculture and
the actions that policymakers and
planners need to take to address
these risks.
Over 30 senior oicials attached to agriculture, environment, and inance ministries rom 20 economies
participated in the workshop in Bangkok, Tailand. Participants shared practical experiences and explored ways
to more eectively mainstream adaptation concerns into agricultural development planning. Te program had
six thematic sessions covering the ollowing topics and included group discussions and a feld visit.t $MJNBUFDIBOHFDIBMMFOHFTSJTLTBOEQMBOOJOHUPPMT
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he workshop provided a venue or robust
discussions among delegates and highlighted
practical experiences as well as creative thinking,
emphasizing the act that the Asia and Paciic
region needs immediate measuresstructuraland non-structuralto adapt to climate change
risks. Te participants, through acilitated group
discussions, devised adaptation roadmaps that
need to be integrated in their sectoral planning
in a phased manner. hey also acknowledged
the immediate need to link existing policies on
climate risk with others such as drought and
disaster management, structural adjustments,
insurance schemes, and subsidies or better
targeted and regionally coordinated actions.
HQLRURIFLDOVIURPHFRQRPLHVSDUWLFLSDWHGLQWKHRUVKRSRQ$JULFXOWXUH
Adaptations to Climate Change held in Bangkok Thailand.
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utreach
ADBI continued eorts to raise
the proile o the institute and
to ensure that its outputs are
disseminated as widely as possible.
A DBI w a s r a nk e d t h e 1 0 t h b e s t
government-ailiated think tank in the
world in the 2011 Global Go o Tink
anks Report. Te report is based on an
international survey o more than 1,500scholars, public and private donors,
policymakers, and journalists rom 120
countries.
ADBI continued to augment its outreach
eorts to reach its target audiences o
academics, policymakers, think tanks, the
media, and the private sector.
he institute made use o the media in
Japan and globally to highlight ADBIsrole and activities, particularly through
the Dean as ADBIs chie spokesperson
(see ADBI in the News).
Participating in external events is another
eective way to promote ADBIs work
in the region and internationally. By the
end o the year, the Dean had spoken
by invitation at 51 external events, and