A s i a n

ww w.adbi .org

D e v e l o p m e n t

B a n k

I n s t i t u t e

ADBI News

Financing for Development

Financing

2015

for sustainable development has

become an integral part of the United Nations
post-2015 development agenda. Similar to the
basic precepts outlined in Rio+20, sustainable
development financing must utilize more
effective incentives for better allocation of
existing resources to meet a more ambitious
development agenda. In 2013, the United Nations
Economic and Social Commission for Asia and the
Pacific (ESCAP) estimated that the Asia and
Pacific region needed between $500 billion and
$800 billion per annum to close development
gaps in education, health, employment, social
protection, and access to energy services between
2013 and 2030. The Asia-Pacific High-Level
Consultation on Financing for Development,
held in Jakarta, Indonesia and scheduled in
preparation for the Third International Conference
on Financing for Development, not only
emphasized financing for sustainable development
to address the infrastructure gap and the costs of
adaptation to climate change, but also delved into
financing for small and medium-sized enterprises
as well as pension and insurance funds as
alternative sources of finance to meet the needs of
the Asia and Pacific region.
For more information on this event, please visit:
www.adb.org/news/events/asia-pacic-high-levelconference-nancing-development.

Volume 9

Number 2

CONFERENCE

In this issue
Financing for Development

Currency Turbulence and Banking Crises

Improving Business-Friendly Infrastructure

Investment in the Transportation Sector

Economic Survey of Japan 2015

Remedies for Japans Slow-Growing Economy

Economic and Political Development in

Bangladesh

Global Imbalances and Europe

Changes in Japans Foreign Direct Investment

Flows

Housing Policies for Emerging Asia

Inclusive Growth in Asia: Housing Policy, Financial

Inclusion, and Infrastructure Investments
4
ADBI Launches New Website

Recent Publications

Recent Working Papers

Call for Papers

Upcoming Events

Fiscal Policy for Long-Term Growth and

Sustainability in Aging Societies

PublicPrivate Partnerships: Engaging the Private

Sector
8

A s i a n

D e v e l o p m e n t

Currency Turbulence
and Banking Crises

B a n k

Free-floating exchange
rates are no less
crisis-prone than other
exchange rate regimes,
stressed Robert Aliber,
professor emeritus of
international economics
and finance at the Booth
School of Business,
University of Chicago,
at an ADBI seminar on

I n s t i t u t e

DISTINGUISHED SPEAKER SEMINAR

13 April. He argued that in a free-floating regime,

shocks often result in prolonged cross-border
investment inflows, followed by sustained current
account deficits, asset price booms, and subsequent
banking crises. According to Professor Aliber, free
floats often lead to larger currency misalignments
and a deterioration of gross domestic product
growth.
For more information on this event, please visit:
www.adb.org/news/events/distinguished-speaker-seminarrobert-aliber-currency-turbulence-and-banking-crises.

Improving Business-Friendly Infrastructure

Investment in the Transportation Sector

SEMINAR

SEMINAR

In spite of the proliferation of publicprivate

partnership (PPP) initiatives in infrastructure
projects across the globe, the public sector should
still play a crucial, multifaceted role in facilitating
infrastructure investments through land acquisition,
consensus formulation with local residents, and
maintaining a transparent, consistent, and clear
environment. This was the focus of the seminar by
Kei Owada of the Social and Public Management
Research Division at Mitsubishi Research Institute
held at ADBI on 6 April.
For more information on this event, please visit:
www.adb.org/news/events/improving-business-friendlyinfrastructure-investment-transportation-sector-case-studies.

Economic Survey of Japan 2015

OECDs recently released
Economic Survey of
Japan 2015 focuses on
four challenges facing
Japan: the need to
boost economic growth
through bold structural
reforms,
the
need
to reduce government
debt, the need to
promote social cohesion
2

by reducing income inequality, and the need to end

deflation definitively. At a seminar held on 16
April at ADBI and moderated by ADBI Dean
Naoyuki Yoshino, the head of the OECDs Japan
and Republic of Korea Desk, Randall Jones,
analyzed the structural barriers to innovation and
entry of new firms that limit dynamism and the
growth potential of small firms.
For more information on this event, please visit:
www.adb.org/news/events/oecd-adbi-economic-seminaroecd-economic-survey-japan-2015.

A s i a n

D e v e l o p m e n t

B a n k

I n s t i t u t e

Remedies for Japans Slow-Growing Economy

The importance of structural factors that have
limited the effectiveness of macroeconomic
policies in delivering growth and full employment
during Japans lost decade as well as the need for
structural reforms were emphasized by ADBI Dean
Naoyuki Yoshino and Farhad Taghizadeh-Hesary,
assistant professor at Keio University, in a seminar
held at ADBI on 8 April. In response to Japans
rapid aging population, they recommended
postponing the retirement age and setting wages on
the basis of productivity rather than seniority in
order to increase employment and reduce social
security costs.

Global Imbalances and Europe

Post-crisis fiscal austerity in European crisis
countries has contributed to a consolidation of
current account deficits, whereas a relatively
restrictive fiscal policy in Germany has contributed
to persistently high capital outflows (i.e., a
persistently high current account surplus). This
implies a growing risk of financial instability
for German financial institutions originating
in global financial markets. This seminar by
Gunther Schnabl, professor of international
economics and economic policy at Leipzig
University, focused on intra-European imbalances
in the context of global imbalances and

SEMINAR

For more information on this event, please visit:

www.adb.org/news/events/seminar-naoyuki-yoshino-japanslost-decade-lessons-other-economies.

Economic and Political Development in Bangladesh

H.E.
Masud
Bin
Momen, Ambassador of
Bangladesh to Japan,
gave a seminar on 23
April at ADBI on the
recent economic and
political development
in Bangladesh. He
highlighted that the

SEMINAR

country had recently enjoyed annual economic

growth of over 6%. Contributing factors included
61% of the population being of working age, an
influx of women in the workforce, and the
increasing use of English as a second language.
For more information on this event, please visit:
www.adb.org/news/events/seminar-he-masud-bin-momenrecent-economic-and-political-development-bangladesh.

SEMINAR

crises. It is argued that

expansionary monetary
policy in combination
with asymmetric fiscal
policy stances are at the
root of intra-European
imbalances,
which
preceded
the
still
ongoing European debt
and financial crisis.
For more information on this event, please visit:
www.adb.org/news/events/seminar-global-imbalances-andeurope.

A s i a n

D e v e l o p m e n t

Changes in Japans Foreign

Direct Investment Flows

B a n k

I n s t i t u t e

Japans foreign direct investment (FDI) to Asia has

grown rapidly since 2000, but financial investment
flows are lagging, said ADBI Dean Naoyuki
Yoshino in a keynote speech at a workshop held
at the School of Business Administration,
Southwestern University of Finance and
Economics, Chengdu, Peoples Republic of China
(PRC) on 10 April. In 2013, most of Japans FDI
went to the European Union (27 trillion), North
America (25 trillion), and the PRC (24 trillion in
2013, a sixfold increase since 1996). Dean Yoshino
noted that there were a number of pull (demand)
and push (supply) factors causing these increases in
investment flows. Pull factors include the large size

of domestic markets in those economies and the

level of skilled labor, while push factors include
the increase in costs of Japanese exports due to the
strong appreciation of the yen and higher domestic
wage rates, and a decline in domestic demand.
For more information on this event, please visit:
e.swufe.edu.cn/.

Housing Policies for Emerging Asia

Rapid urbanization is occurring across Asia and the

Pacific, posing a major challenge for governments in
the region to provide affordable and adequate housing.
Effective mechanisms to address the housing
challenge were discussed at a 2-day workshop

For more information on this event, please visit:

www.adb.org/news/events/inception-workshop-and-policydialogue-housing-policies-emerging-asia.

WORKSHOP

and policy dialogue at ADBI on 1415 May,

focusing on housing policies for emerging Asia. This
event, co-organized with ADB, brought together
international experts and government officials
from developing Asia to discuss key issues such as
best practices, challenges, and the opportunities
that exist in regulation, financing, policy
implementation, and country-specific initiatives.

Inclusive Growth in Asia: Housing Policy,

Financial Inclusion, and Infrastructure Investments
Given that achieving inclusive and sustainable
growth remains a top priority for developing
member countries, especially against the backdrop
of the unfinished poverty agenda and the
challenges posed by widening inequalities in
income and economic opportunities, this policy
dialogue showcased ADBIs latest research on
housing policy issues, which underpin inclusive
growth in Asia. To mitigate income disparities in
emerging Asian countries, effective housing
policies to support access to adequate housing are
particularly important for low- and middle-income

WORKSHOP

POLICY DIALOGUE

economies. Two other major ADBI project themes,

financial inclusion and the economic effects of
infrastructure investments, were discussed during
the policy dialogue held on 27 April at ADBI.
For more information on this event, please visit:
www.adb.org/news/events/inclusive-growth-asia-housingpolicy-nancial-inclusion-and-infrastructure-investments.

A s i a n

D e v e l o p m e n t

B a n k

I n s t i t u t e

ADBI Launches New Website

As the key dissemination tool and face of ADBI, the newly revamped ADBI website
went live in June. Integrated with the ADB website, the redesign features a
strengthened institutional connection with ADB through co-branding, enhanced ease
of use and content discoverability, as well as improved website security. All outputs
and announcements are uploaded to the website as they become available for the most
up-to-date information on ADBI news and events.
To view the new features of the website, please visit: www.adbi.org.

Recent Publications

The Environments of the Poor in South Asia: Simultaneously Reducing

Poverty, Protecting the Environment, and Adapting to Climate Change
This book contains a multitude of studies of the environmentpoverty relationship, such as those in the
drylands of Rajasthan and Odisha, the Sunderban Delta, etc., and the urban slums of India and Bangladesh.
More information:
www.adb.org/publications/environments-poor-south-asia-simultaneously-reducing-poverty-protecting-environment.

Monetary and Financial Cooperation in East Asia: The State of Affairs

after the Global and European Crises
This book presents contributions by scholars from different countries and provides evaluations of the
global and eurozone crises and of their relevance for East Asian integration.
More information:
www.adb.org/publications/monetary-and-nancial-cooperation-east-asia-state-affairs-after-global-and-european.

Connecting South Asia and Southeast Asia

This book analyzes how closer regional connectivity and economic integration can benefit the regions
of South Asia and Southeast Asia, focusing particularly on the role of infrastructure and public policies
in facilitating this process.
More information and to download: www.adb.org/publications/connecting-south-asia-and-southeast-asia.

NARBO: A Decade of Achievements (20042014): Promoting Integrated

Water Resources Management and Improving Water Governance
This publication commemorates the 10-year anniversary of NARBOs founding and features a
collection of narratives from water management practitioners across the region. Rapid population
growth and economic development jeopardize water security in Asia, giving further emphasis in the
global agenda to the need for improved water governance.
More information and to download: www.adb.org/publications/adbi-narbo-decade-achievements-2004-2014.

e-newsline Brings Asia to Your Inbox

For a daily wrap-up of development news and events
in Asia, subscribe free to ADBIs e-newsline. Concise
summaries of news, opinions, and editorials from an

Asian perspective are delivered daily to your inbox.

To learn more about e-newsline and to subscribe,
please visit: www.adb.org/adbi/e-newsline.
5

A s i a n

D e v e l o p m e n t

B a n k

I n s t i t u t e

Recent Working Papers

Thailands Economic Integration with Neighboring Countries and Possible Connectivity with South Asia

This paper discusses increasing Thailands importance as a regional co-production base and as an intra-regional trade and border trade hub.

Read Working Paper 520 at www.adb.org/publications/thailands-economic-integration-neighboring-countries-and-possible-connectivity-south.

Japans Lost Decade: Lessons for Other Economies

This paper addresses why Japans economy has stagnated since the bursting of its economic bubble.

Read Working Paper 521 at www.adb.org/publications/japans-lost-decade-lessons-other-economies.

Infrastructure Finance and Financial Sector Development

This paper discusses facilitating the financing of cross-border infrastructure investments between South Asia and Southeast Asia to support transport
and energy connectivity.
Read Working Paper 522 at www.adb.org/publications/infrastructure-nance-and-nancial-sector-development.

Regional Economic Integration and Multilateralism: The Case of the ASEAN-Australia-New Zealand FTA and the
Malaysia-New Zealand FTA
This paper looks at the AANZFTA and MNZFTA as a basis for engagement at the World Trade Organization and examines how to multilateralize the
outcomes secured through the agreements.
Read Working Paper 523 at www.adb.org/publications/regional-economic-integration-and-multilateralism-case-asean-australia-new-zealand-fta.

Hard Pegs versus Intermediate Currency Arrangements in the Pacific

This paper proposes a new model to manage exchange rates in order to minimize gross domestic product (GDP) fluctuations in the Pacific.
Read Working Paper 524 at www.adb.org/publications/hard-pegs-versus-intermediate-currency-arrangements-pacic.

Health and Home Ownership: Findings for the Case of Japan

Using an econometric approach, this paper finds that homeowners consistently report better self-reported health and less physical problems, even
when controlling for financial assets and housing conditions.
Read Working Paper 525 at www.adb.org/publications/health-and-home-ownership-ndings-case-japan.

Housing Policies for Asia: A Theoretical Analysis by Use of a Demand and Supply Model

This paper introduces a new simple two-period housing demand model for owner-occupied and rental houses, which allows for assessing the impact
and effectiveness of different housing policies.
Read Working Paper 526 at www.adb.org/publications/housing-policies-asia-theoretical-analysis-use-demand-and-supply-model.

From the Chiang Mai Initiative to an Asian Monetary Fund

This paper summarizes and evaluates the progress of regional financial cooperation, particularly the Economic Review and Policy Dialogue, the CMI
and its subsequent multilateralization, and the ASEAN+3 Macroeconomic Research Office.
Read Working Paper 527 at www.adb.org/publications/chiang-mai-initiative-asian-monetary-fund.

Loan-to-Value Policy as a Macroprudential Tool: The Case of Residential Mortgage Loans in Asia

This paper analyzes the effect of LTV on mortgage lending, the direct channel of influence, using a large sample of banks in 10 Asian economies.
Read Working Paper 528 at www.adb.org/publications/loan-value-policy-macroprudential-tool-case-residential-mortgage-loans-asia.

The Response of Macro Variables of Emerging and Developed Oil Importers to Oil Price Movements

This paper assesses the impact of crude oil price movements on two macro variablesthe GDP growth rate and the consumer price index inflation rate.

Read Working Paper 529 at www.adb.org/publications/response-macro-variables-emerging-and-developed-oil-importers-oil-price-movements.

Financial Inclusion, Regulation, and Education in Germany

Looking at the case of Germany, this paper describes how the quality of financial inclusion is impaired by low levels of financial literacy.
Read Working Paper 530 at www.adb.org/publications/nancial-inclusion-regulation-and-education-germany.

Optimal Fiscal Policy Rule for Achieving Fiscal Sustainability: A Japanese Case Study

This paper discusses the optimal rule for fiscal policy and explains how the Domar condition is obtained only from the government budget constraint
and does not take into account demand for government bonds.
Read Working Paper 531 at www.adb.org/publications/optimal-scal-policy-rule-achieving-scal-sustainability-japanese-case-study.

Comparison of Static and Dynamic Analyses on Exchange Rate Regimes in East Asia

This paper compares three methods of analyzing exchange rate regimes in East Asia: static analysis, conventional dynamic analysis, and dynamic
transition analysis.
Read Working Paper 532 at www.adb.org/publications/comparison-static-and-dynamic-analyses-exchange-rate-regimes-east-asia.

Impacts of Universal Health Coverage: A Micro-founded Macroeconomic Perspective

This paper studies the impact of tax-financed universal health coverage schemes on macroeconomic aspects of labor supply, asset holding, inequality,
and welfare, while taking into account features common to developing economies.
Read Working Paper 533 at www.adb.org/publications/impacts-universal-health-coverage-micro-founded-macroeconomic-perspective.

Financial Education in Asia: Assessment and Recommendations

This paper assesses the case for promoting financial education in Asia. It argues that the benefits of investing in financial education can be substantial.
Read Working Paper 534 at www.adb.org/publications/nancial-education-asia-assessment-and-recommendations.

Financial Inclusion, Financial Education, and Financial Regulation: A Story from Indonesia

This paper examines the shift in Indonesias national economic development strategy from its exclusive orientation during the New Order era
before the Asian financial crisis.
Read Working Paper 535 at www.adb.org/publications/nancial-inclusion-nancial-education-and-nancial-regulation-story-indonesia.

A s i a n

D e v e l o p m e n t

B a n k

I n s t i t u t e

Call for Papers

ADBI is looking for original and unpublished papers in relation to the following:
The Impacts of a Possible Growth Slowdown in the PRC on Asia

The experiences of Japan, the Republic of Korea, and Taipei,China raise the question of whether the PRCs economy has reached a stage where its
medium- or long-run growth is starting to slow down significantly. If so, this will have significant implications for growth, trade, and investment for
other economies.
www.adb.org/adbi/research/call-for-papers/impacts-growth-slowdown-prc-asia

Central and Local Government Relations: Fiscal Sustainability

Sustainable and inclusive growth requires continued public investment in infrastructure, education, health, and social services. These responsibilities,
especially with regard to infrastructure investment, need to be devolved increasingly to regional or local governments.
www.adb.org/adbi/research/call-for-papers/government-relations-scal-sustainability

SMEs in Developing Asia: New Approaches to Overcoming Market Failures

Small and medium-sized enterprises (SMEs) in Asia face numerous challenges, including barriers to accessing finance, skilled workers, technology,
and domestic and foreign markets.
www.adb.org/adbi/research/call-for-papers/sme-developing-asia

Macroeconomic Shocks and Economic Growth in Asia

The United States is expected to normalize its monetary policy soon, with profound implications for global financial conditions and capital flows.
Meanwhile, recovery in the European Union and Japan remains unclear. The uneven recovery and monetary policy divergence in advanced economies
create significant uncertainty for developing Asia.
www.adb.org/adbi/research/call-for-papers/macroeconomic-shocks-asia

Selected Asia Pathways posts published

Exploring the Implications of TPP Negotiations for
Latin America
Middle-Income Economies: Slowdowns, Traps, and
Transitions
The Necessity of Developing SME Databases in Asian
Economies
Asia: The Next Higher Education Superpower?

The Case for Connecting South Asia and Southeast Asia

Currency Arrangements in the Pacific: Time to
Rethink?
Scholars, Policymakers, and International Affairs:
Finding Common Cause
Impacts of Oil Prices on Emerging and Developed
Economies
View all Asia Pathways posts at www.asiapathways-adbi.org/.

Upcoming Events

2425
October

Central and Local Government Relations: Fiscal Sustainability

This conference will gather well-known scholars and experts on fiscal systems and fiscal policies to actively promote a discussion
on relevant issues which are expected to contribute to the theoretical and empirical literature and regional policy dialogue.

The Implications of a Possible PRC Growth Slowdown for Asia

This conference will present commissioned studies that analyze the factors explaining the long-term slowdown of growth

in advanced Asian economies, such as Japan, the Republic of Korea, and Taipei,China; assess the structural factors
2526
November affecting the PRC and their implications for Chinese growth over the next decade; assess and quantify the impacts of

slower Chinese growth on growth, trade, investment, and employment in other emerging Asian economies; and propose
and assess policy measures that could offset some of the negative factors identified in the study.

Workshop: Macroeconomic Shocks and Economic Growth in Asia

This workshop will bring together well-known scholars and experts on international macroeconomics and international
34
December finance, with a particular focus on macroeconomic shocks. The key issues to be analyzed in the project concern the
implications for Asian economies of sharp changes in monetary policy in advanced countries.

ADBI Annual Conference 2015: Global Uncertainty, Macroeconomic Shocks, and Growth in Asia
3
The economic prospects for Asia and the Pacific will be a key subject to be analyzed at the conference, given the
December

uncertainties stemming from a slowdown of the PRC economy, as well as changes in monetary policy in developed countries.

A s i a n

D e v e l o p m e n t

B a n k

Fiscal Policy for Long-Term Growth

and Sustainability in Aging Societies

ADBI co-hosted a high-level, 2-day fiscal forum in

Tokyo on 1011 June, together with the Fiscal
Affairs Department (FAD) of the International
Monetary Fund, and the Policy Research Institute
(PRI) of the Japanese Ministry of Finance. The
central theme was Fiscal Policy for Long-Term
Growth and Sustainability in Aging Societies.

PublicPrivate Partnerships:
Engaging the Private Sector

CONFERENCE

Policymakers from over 100 Asian countries

presented on current and future fiscal policy
challenges and possible remedies in the context of
aging societies. The forum specifically focused on
issues related to long-term growth and fiscal
sustainability in Asia. High levels of subsidies,
aging populations and the resulting rise in social
spending, and pressure for greater infrastructure
investment are threats to future growth in the
region. Asia faces the challenge of maintaining
fiscal sustainability in light of increasing pressure
to increase social spending and redistribute
income.
For more information on this event, please visit:
www.adb.org/news/events/tokyo-scal-forum-scal-policylong-term-growth-and-sustainability-aging-societies.

How can risk be properly allocated and managed

between the private and public agents involved?
Key recommendations put forward at the Annual
Asia Regional Workshop on PublicPrivate
Partnerships: Engaging the Private Sector, hosted
by ADBI on 25 June, included understanding that
every PPP project should be uniquely structured;
conduct a full and proper feasibility study to ensure
a proper tender design; consult with the private
sector before finalizing the tender documents and
the allotment of risk; be wary of unrealistic
traffic/use projections; and prevent an expectation

ADBI News reports quarterly on the activities of the Asian

Development Bank Institute. The views expressed in this
newsletter do not necessarily reflect the views or policies
of the Asian Development Bank Institute or the Asian
Development Bank. Materials may be reprinted with credit
given to ADBI News. To send comments or to request a
free subscription, e-mail adbinews@adbi.org; fax a
message to +81-3-3593-5571; or write to ADBI News,
Kasumigaseki Building 8F, 3-2-5 Kasumigaseki,
Chiyoda-ku, Tokyo 100-6008, Japan.

WORKSHOP

that the contract can be renegotiated to better suit

the private party.
For more information on this event, please visit:
www.adb.org/news/events/asia-regional-workshop-publicprivate-partnerships-engaging-private-sector.

ADBI Online

ADBI News
Publisher: Shinichi Nakabayashi

I n s t i t u t e

To read ADBI News online, go to

www.adb.org/series/adbi-news
For information, send an e-mail to info@adbi.org or go
to www.adbi.org
For publications, go to www.adbi.org/publications
To read daily development-related news and
analysis, go to www.adb.org/adbi/e-newsline. Sign up to
receive e-newsline daily.
Register for free e-mail alerts when new material is
posted on our website. http://alerts.adb.org