Takehiko Nakao, president, Asian Development Bank (ADB) talks to Biz@India about the institution’s new initiatives across Asia and how it is working with micro finances and other schemes.
How does ADB see the global economic situation?
ADB has a strong point of view about 2017, 2018, and 2019. According to our projection, in 2018, the growth of developing Asia, excluding Japan, New Zealand and Australia, has been 5.8 pc. China will be 6.4 pc. But China’s growth was stronger last year and India of course was slower last year. We are expecting the impact of demonetisation but the introduction of GST will digest it, and the Indian rupee will recover fully.
Generally speaking, the world trade is now recovering and there was a discussion that trade increases in a much smaller way in negative while the GDP was increasing. I thought it would recover, and it is recovering, but very slowly.
I think the economies all over the world including advanced economies, and India and China, are some countries that are showing growth.
What about the Gulf countries and the GCC countries?
They are not our members.
Energy prices have been rising. Could it be a concern?
For importing countries like India it is a concern, but for commodity exporting countries it is an opportunity to further diversify their economies. So, they should use this kind of scope for doing things they should do anyway.
What are the new initiatives being taken by ADB in Asia in terms of promoting green growth or trying to reducing inequality?
We are now trying to increase our climate finance including mitigation and adaptation. We are supporting India regarding renewable energy diffusion system, smart cities and clean India. We are increasingly using more advanced technology.
Inequality is rampant across Asia. Is your bank looking at micro finance and other such schemes?
Supporting rural regions is one of the ways to do that. We are doing SME finance and agricultural finance in rural areas. We are supporting rural road projects and also some social protection projects, but the countries themselves have to put in the most effort to uplift the weaker economic sections.
How is a weak dollar going to impact the economy?
The rate of course fluctuates, but countries like India are making reforms to make up for that. I don’t think it will affect the economy.
Is protectionism increasing around the world?
There are a lot of talks about it but in reality, there are new agreements like the Trans-Pacific Partnership (TPP), and also we don’t reverse the trade system. So I don’t think it is happening.
The speed of opening up is now slower but we should continue to support free trade system and at the same time we should pay attention to those people who are in a sense, behind. Because of globalisation, we should bring moderation to those people.
Is Islamic finance a part of your portfolio?
We are now trying to do some projects using local currency, so as of now we are not that much into it as others are.To View the article buy our magazine