ADB: Investments in education, health, climate response needed for ‘even stronger’ economic rebound

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ADB President Masatsugu Asakawa

Metro Manila (CNN Philippines, May 5) — Developing countries like the Philippines should invest more on health, education, and climate change response to rebound from the deep scars caused by the COVID-19 pandemic, the Asian Development Bank said.

In his closing speech for the 54th Annual Meeting of Governors Wednesday, ADB President Masatsugu Asakawa said member-states should also plug gaps on gender, income, and digital connectivity to keep pace with the demands of the new global economy.

“I believe the path we have laid out will help lead our region out of these uncertain times, and I am determined to do my part to see it through,” Asakawa said. “If we stay on this course, I am confident the region will emerge from the current crisis even stronger than before.”

The ADB slashed its growth forecast for the Philippines to a "fragile" 4.5% this year from 6.5% previously as the country struggles to contain COVID-19 infections. This is a reversal from last year's 9.6% contraction. Meanwhile, developing Asia will see a stronger rebound and is expected to grow by 7.3% against the earlier 6.8% projection, riding on progress on vaccine rollouts and recovering global demand.

Investments in high-quality and sustainable digital infrastructure would allow a “smart” rebuilding of economies, the ADB chief added, which should be supported largely by greater domestic tax collections rather than resorting to foreign borrowings.

READ: Dominguez asks ADB to grant more loans as lender tells states to rely less on foreign debt

Asakawa also announced that he will seek reelection as ADB president in November. He has been leading the bank since January last year to fulfill the remaining term of former president Takehiko Nakao, who resigned from the Manila-based institution.

He vowed that the regional lender will walk the talk by fostering greater regional cooperation and having a more gender-inclusive board of directors.

Coal still a go

Asakawa also said member-states should “place ambitious climate actions at the center of development.”

The regional lender, however, is not yet declaring a blanket ban on funding coal and fossil fuel power projects despite campaigns to slow down global warming. Roger Fischer, one of ADB's executive directors, said there is "no full consensus" among board members yet on how to exit the fossil fuel portfolio.

In a separate session, civic groups demanded ADB to stop extending loans to so-called “dirty” energy sources in keeping with the Global Paris Agreement on climate change that targets to keep the annual rise in temperatures at 1.5 degrees Celsius.

“ADB should once and for all declare a full commitment to stop new investments and to divest from existing investments in fossil fuel power generation projects, related infrastructures and projects across the supply chain,” said Avril de Torres, head of the Center for Energy, Ecology, and Development’s Research, Policy, and Law Program.

The Climate Action Network added that money for coal-fired power generation plants “has no place in a climate emergency.” Instead, funding should be given to renewable energy projects.

Asia Pacific is said to contribute the most to carbon emissions, leading to higher world temperatures. Experts added that people living in countries vulnerable to natural disasters like the Philippines are most likely to be displaced and driven into deeper poverty.

Coal and natural gas projects account for two-thirds of the country’s power mix.

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