Japan pushes ‘quality infrastructure’ as US seeks ‘environmental safeguards’
China on Saturday pressed the Asian Development Bank to expand its role in Beijing-led projects such as the Belt and Road Initiative and the Asian Infrastructure Investment Bank.
Outlining his proposals to accelerate regional growth, Chinese Deputy Finance Minister Yu Weiping said the bank must “keep up with the times” and bolster its lending activities, even to countries that have attained upper middle-income status.
“We encourage ADB to further expand its partnership with AIIB, NDB and other new financial institutions,” Yu said at an annual meeting of the bank’s governors in the Philippine capital. NDB refers to the New Development Bank, also known as BRICS Development Bank, which was established by Brazil, Russia, India, China and South Africa.
While ADB and AIIB have jointly financed some projects, Beijing-based AIIB, which was started by China in 2015, has been perceived as a rival to the Manila-based ADB, in which Japan and the U.S. are its largest stakeholders.
Yu also called on the ADB to “increase the linkage between the Belt and Road Initiative and other regional cooperation programs.”
The initiative aims to build $8 trillion worth of infrastructure along the trade routes between Asia and Europe. Many see the AIIB and the Belt and Road Initiative as part of China’s effort to boost its influence in the region once dominated by the U.S. and Japan.
Meanwhile, Japanese Finance Minister Taro Aso, who spoke before Yu, said the ADB should shift its emphasis from “quantity to quality” financing, even as developing Asia and the Pacific needs $1.7 trillion annually to build infrastructure.
“Quality infrastructure investments sustain inclusive growth,” Aso said. They also promote private sector participation, job creation, capacity building and “sustainable borrowing,” in a slight dig at China’s initiatives, which have sparked concerns of a “debt trap,” such as in in Sri Lanka, for example. “This is the virtuous cycle of economic development,” he said.
The U.S. also underscored sustainable development.
“This includes strong environmental and social safeguards, which the United States views as underpinning high-quality projects and a large reason that borrowers seek to work with the ADB,” said Geoffrey Okamoto, the U.S. temporary alternate governor.
The ADB must strengthen its coordination with other international financial institutions, Okamoto said.
“Such coordination is particularly important at a time when riding debt levels are increasingly threatening economic stability and imperil hard-won development gains in some countries,” he said.