NADI (FIJI): Asserting that Asia continues to be the growth engine of the world, India’s economic affairs secretary, Subhash Chandra Garg on Saturday said the ADB must expand its private sector operations to boost economic development.
Addressing the board of governors of the Asian Development Bank (ADB) here, he said there is a rising need for the agency to focus on strengthening human capital and develop social safety nets.
“Therefore, we urge the ADB management to expand it social sector engagements in countries like India, while at the same time, continuing with the focus on making cities smart, providing 24×7 water and power supply, enhancing connectivity, and mitigating the risk of climate change. Our regional cooperation initiatives must aim to integrate the countries of the region with the global value chains,” he said.
“While ADB should continue helping the member countries harness their growth potential by providing larger financial resources, it must expand its private sector operations across the region. By investing more through equity and infrastructure trusts, ADB can play a meaningful role in development of private sector initiatives,” Garg, India’s alternate governor on ADB’s board of governors, said.
ADB’s private sector operations reached $3.14 billion in 2018, a 37 per cent increase from the previous fiscal, and stood at 14.5 per cent of its overall commitment.
Emphasising that ADB has helped the developing countries in building infrastructure and reducing extreme poverty for the past 52 years, Garg said innovation in financing will be the key to success of long-term growth strategy.
“This will require careful fine-tuning of both public and private sector financing. Private financing has to be carefully shepherded to the right sectors like manufacturing, services and new digital economy industries with active support of equity financing from ADB and other multilateral agencies,” he said.
Private investment in more difficult sectors like infrastructure and human capital improvement, however, will not flow unless these projects are sufficiently de-risked for the private sector with both direct investment as well as provision of guarantees and other structured support, he said.
He further said that ADB has played a pivotal role in helping member countries change their developmental landscape all these years.
“However, in order to realise the goals of shared prosperity in Asia and the Pacific and meet the sustainable development goals on poverty and hunger by 2030, ADB will require to continue providing affordable financing to its borrowing members, offer lending instruments which are innovative, and expand equity financing to private sector,” he said.
It must also remain fully engaged in funding of infrastructure and human development projects by funding directly and structuring projects appropriately and guiding them as a key knowledge partner in their developmental journey, he added.