Opening Remarks at ASEM Trust Fund Meeting

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1 Opening Remarks at ASEM Trust Fund Meeting Christian A. Rey, Manager, Quality and Results Central Operational Services Unit East Asia and Pacific Region, the World Bank June 28, 2006 Good morning. It is my pleasure to speak with you at the opening of this ASEM Trust Fund 2 Annual Review Meeting. Before I begin, let me thank you all for being here. I also want to thank the European Commission for the arrangements that have made this meeting possible. I appreciate the commitment of our ASEM Trust Fund partners in their continued support to this important partnership initiative and thank the Donors most sincerely for their generosity. As we will discuss today, since we last met, significant progress has been made in getting results on-the-ground. The pace of the implementation of the second phase of ASEM Trust Fund has improved, mainly due to the efforts of all partners in the implementation of an Action Plan we endorsed last year. This progress has been recognized in the recently completed European Commission sponsored evaluation which was positive in terms of achievement of results under the two ASEM trust funds. ASEM Trust Fund 2 Status Since we last met, a total of 29 grants have completed their activities, 17 more grants than when we last met. In China, completed grants have supported restructuring and privatizing state enterprises, including new laws; reforms in insolvency law; and analytical work to strengthen public health programs in rural poverty areas. In Indonesia, grants have helped build capacity of the Central Planning Agency and influenced its community development policies and monitoring and evaluation arrangements and provided underlying analysis for community-based investments in infrastructure. In the Philippines, recent completed grants have helped to strengthen the banking and corporate sectors including improvements in the

2 Central Bank s IT, risk management, policymaking, and supervisory capacity; provided training on corporate governance; and supported policy recommendations for enhancing productivity in industry. The grants in Thailand have helped the government prepare for international negotiations on trade and financial liberalization of services; strengthened social protection and poverty alleviation programs through: empirical poverty studies overhaul of national statistical system; and stronger social service delivery. And in Vietnam, ASEM completed grants have helped in the equitization of Mekong Housing Bank, a state-owned commercial bank, social safety net for workers displaced from state-owned enterprises and design and preparation of Vietnam s social security law. To set the context for our discussions today, let me give you a quick overview of the efforts in the region: We meet at an extraordinary time, for Europe and for Asia and, therefore, for those of us concerned with the development in both regions and the linkages between them. Let me deal with Asia first. We are witnessing the unprecedented impact of the two largest countries China and India simultaneously growing rapidly, reducing poverty successfully, and engaging internationally. This impact is being felt from Europe to United States, and from Asia to Africa. It is being felt in more than monetary terms although, of course, that aspect is profound. China was the second-largest investor in Africa last year and emerged as either the sixth or fourth-largest economy in the world. An estimated 12 million people a year are being lifted from poverty in India. China and India are pursuing closer trade arrangements, closer air links, and even joint approaches to purchasing energy. You see this impact evident in the Chinese goods for sale in markets from Jakarta to Phnom Penh, in the growth of back-office jobs in India s service sector, and in the increased focus of Western financial institutions on strengthening their presence in the Chinese market. And these changes are taking place at a time when South-East Asia is moving rapidly to integrate. Last December s historic meeting of the East Asian Summit, with 16 heads of 2

3 state, in Kuala Lumpur, recast the region s definition of itself. It was telling that the meetings took place at the same time as the Hong Kong Ministerial of the WTO. The contrast could not have been greater, between the protests and incremental negotiations in Hong Kong and the desire for closer integration on display in KL. I mention these contextual issues at the outset because it is the setting in which we meet and in which we operate. Our decisions and the ASEM process itself, have evolved from the days of the financial crisis to be appropriate for the new era of Asian revival and integration. At the World Bank we are making some major adjustments to ensure our continued relevance and effectiveness in this fast-changing environment. Some of these are highly significant for ASEM, and I would like to share them with you. An increased emphasis on partnership, openness and knowledge. Although our lending has increased in East Asia and the Pacific in the past few years, the real area of change for us has been our role in working with governments in more complex and open societies. This entails placing a greater emphasis on providing knowledge in more usable ways, and providing it more quickly. We now have moved to provide shorter, more timely policy notes on current issues. We utilize our Glabal Development Learning Network to share our research directly, face to face with those who can use it, and we adjust the content based on feedback we receive. Interestingly, the GDLN is increasingly being used by others, for their own events and conversations, sometimes with us and sometimes without. The ASEAN Secretariat, for example, frequently joins in to discussions via its new facility in Jakarta, to learn and to offer its own ideas. The APEC Secretariat is also engaged with us, and we will be linking the network from their CEO forum in Hanoi later this year. Our country assistance strategies now involve increased levels of direct consultations with civil society, the private sector and other donors. Our field offices engage directly with young people on issues as divergent as the risks and control of HIV, youth employment, and peace and development. These events also are often linked and supported by the GDLN, in response to external demand. 3

4 We are seeing this quite starkly in the lead-up to the Annual Meetings of the Bank and IMF in Singapore this September. In preparation for those meetings, we have brought together about 30 Asian civil society organizations, to seek their guidance on issues of concern that they would like to raise and discuss, before, during and after the meetings. We helped convene a discussion of this in Singapore, and we followed up with the CSOs in a multicountry GDLN session at the Bank s annual conference on development economics in Japan last month. Similarly, working with the Singapore Government, we brought together about 50 Asian think tanks and research institutes about two years ago, to hear directly from them what issues they believed should be raised and discussed at the meetings. We have helped fund some research by these groups, and you will see their work featured at the Program of Seminars immediately prior to the meetings. We intend to maintain these networks beyond the meetings, because as Asia integrates further, it is useful for us both to support such integration where we can and also to learn from it. A major theme of these meetings is Asia in the World, the World in Asia. Consistent with that, we are placing a significant emphasis in the seminars, in our research and in the premeeting events, on cross-regional learning. There are sessions and reports looking at the relationships between Latin America and Asia, between Asia and Africa, and from Asia globally. This month we are helping to bring about 16 senior African officials to Asia to learn about education reform, the sequencing of decisions, and how other countries have succeeded and where they have gone wrong. There is more that we find ourselves doing now, to support the regional and global trade agenda and to support the improvements in governance that are essential to sustained, shared growth. We have been active in calling for concessions that would lead to a successful Doha Round; and we have been prominent in advocating specific initiatives to reduce corruption and improve governance across the region. I hope what I have painted is a picture of an agenda undergoing rapid but necessary adaptation to the realities we face. Asia is changing quickly, and so must we, because the only alternative is that we drift in relevance in the region with the most poverty, the fastest growth and the three of the four most populous countries and that is not an option at all. 4

5 I hope in this meeting we will further our consideration of a similar adaptation of ASEM, for it has probably also never been more essential that Europe finds new and innovative ways to engage with Asia. ASEM provided a valuable bridge to Asia, and provided valuable support to Asia, during the traumatic period of the crisis and post-crisis. In this new era where Asia is strong again and is shaping world affairs including in Europe, as you all know well it is inconceivable that Europe should engage less. I know that you all realize this, and the question we face is, therefore, the same one, of how to engage most effectively. For the World Bank, increasingly, it is on knowledge, advice, analysis, networking, and supporting dialogue as societies become more open. Asia faces many challenges, from the threats posed by uneven growth within and between countries to the hazards of serious environmental degradation, from the consequences of complex and conflicting trade agreements to the challenge of managing flows of labor across borders, from the risks of avian flu to maritime security. In areas where we have some expertise, we are engaging directly. In areas where others have expertise, we are utilizing our GDLN and our convening power to assist in bringing people together. But at all levels, we are focusing on helping Asia manage these challenges and changes, according to Asian priorities and cultural sensitivities. It is the future of our engagement in the region, clearly, and it is an exciting prospect, because the knowledge we gain from such engagement makes us more effective in all other regions, and makes us better able to operate as a World Bank should. This is the last of the ASEM Review Meeting. I look forward to an engaging discussion today and we leave this room with a clear understanding of the next steps to ensure that the program is successfully completed. 5

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