The Asian region should take on the health crisis caused by the coronavirus disease 2019 (COVID-19) as a collective which the Asian Development Bank (ADB) will spearhead through the forming of a regional hub that will coordinate the anti-virus campaigns and the recovery efforts once the pandemic ends.
The Asian center will primarily promote knowledge sharing and strengthening cooperation on tax policy and administration to improve domestic resource mobilization.
ADB president Masatsugu Asakawa said in an address in yesterday’s 53rd annual meeting of the Board of Governors that the center is one of its commitments to developing economies to meet their recovery goals.
“ADB will continue to earn your trust as a steadfast partner during the uncertain times we still face in our region as we build a strong and lasting recovery,” Asakawa said.
As the region moves forward toward recovery, Asakawa said ADB will build on its relationship with its members to provide support in key areas.
ADB will also support efforts of developing countries to secure safe and effective vaccines and to formulate strategies for their equitable delivery, according to Asakawa. “To accomplish this, ADB will continue to strengthen collaboration with the World Health Organization, the World Bank, the Global Alliance for Vaccines and Immunization, vaccine experts and pharmaceutical companies.
New global order
ADB said it will also promote regional cooperation and integration to help members seize the opportunity from renewed globalization in a post-pandemic new normal.
“While there are some who suggest that recent border closures and travel restrictions are signs that globalization has ground irreversibly to a halt, I do believe that globalization will return, but it will take a different shape,” Asakawa said.
ADB will work with developing nations to secure more diversified value and supply chains, and to promote regional public goods for better collective prevention of disease outbreaks, mitigation of climate change impacts and enhancement of regional financial safety net.
COVID-19, according to ADB, has contributed to an increase in income inequality and absolute poverty which can be addressed through investments in health, education and social protection.
ADB said a balance should be found in ensuring safety and opportunities for all while building the human capital that economies needed to thrive in the long term.
ADB will accelerate efforts to tackle climate change to reach the goals established in its long-term Strategy 2030, to reach $80 billion in cumulative climate investments and 75 percent of the total number of committed operations by 2030.
ADB will invest in information technology and data for health, education, financing for micro, small, and medium enterprises and remote work, while also addressing both the digital divide and cyber security.
ADB announced last April, a $20 billion package to help developing members confront challenges from the pandemic.
The assistance included rapid emergency grants and technical aid to help governments meet urgent medical needs; a new COVID-19 Pandemic Response Option (CPRO), which is supporting countercyclical expenditure programs and assistance for the private sector.
ADB has so far committed about $11.2 billion in aid to fight the pandemic. Working closely with development partners, ADB said it has also mobilized about $7.2 billion in cofinancing.
Even prior to the pandemic, many economies did not achieve a minimum tax yield of 15 percent of gross domestic product (GDP), which is a level now widely regarded as the minimum required for sustainable development.
In response, Department of Finance Secretary Carlos Dominguez III said by 2019, bold reforms in tax policy and administration raised the revenues to GDP ratio to 16.1 percent in 2019, which is the highest in more than two decades.
“In the same year, we brought down our debt-to-GDP ratio to a historic low of 39.6 percent,” he added.
This strong fiscal position gave us the headroom needed to reallocate budget items and quickly access emergency financing to fight the pandemic, Dominguez noted.