Today, multilateral development banks are guided more by the principles and requirements of global sustainability than purely economic growth, says Errol Oh
This article was first published in the July/August 2019 China edition of Accounting and Business magazine.
At the Asian Development Bank (ADB) annual meeting in Fiji in May, many of the conversations revolved around environmental and social matters such as disaster risk management, climate resilience, renewable energy, sustainable tourism, the hydrogen economy, and equality and empowerment.
You don’t expect the programme to incorporate a film, but there it was – a director’s cut of A Plastic Ocean, a feature-length documentary about how plastic pollution in the sea poisons people and the planet.
The meeting was also the platform for the launch of the Action Plan for Healthy Oceans and Sustainable Blue Economies, through which the bank intends to increase its financing and technical assistance for ocean health and marine economy projects in the Asia-Pacific region to US$5bn from 2019 to 2024.
‘The prosperity of our region depends on healthy oceans and sustainable development,’ said ADB president Takehiko Nakao. ‘We must work toward a more resilient future, where humanity and oceans thrive together.’
This statement and the meeting’s broad agenda reflect how sustainability is at the heart of everything that the multilateral development banks (MDBs) do. It is no longer as simple as channelling money into traditional infrastructure to spur economic growth.
The World Bank, for example, works for sustainable solutions that reduce poverty and build shared prosperity in developing countries. The European Investment Bank is in part guided by the European Union’s commitments to the Paris Agreement on Climate Action and to the United Nations Sustainable Development Goals, while the Islamic Development Bank says it equips people with the tools they need ‘to build a sustainable future for themselves, their communities and their countries’. Sustainability also figures prominently in the vision of Beijing-based Asian Infrastructure Investment Bank, the new kid on the MDB block.
There was a time when development was just, well, development. The World Bank was originally known as the International Bank for Reconstruction and Development when founded in 1944, when its principal role was to grant loans to countries that needed to rebuild after the Second World War. In the early decades, ‘development’ was more about dams, electrical grids, irrigation systems and roads.
But the world is increasingly complex and interconnected, and so are its issues and challenges. Over time, the United Nations has sharpened the international focus on sustainable development; today, the MDBs are in a position to help tighten that embrace.
The ADB’s maiden annual report talked about its president’s visits to a number of member countries in 1967. The bank reported that the leaders of developing nations were keenly aware that economic development required sacrifices and hardships, and that self-help was important.
That surely applies to sustainable development as well.
Errol Oh is executive content officer of The Star.
"Sustainability is no longer as simple as channelling money into traditional infrastructure to spur economic growth"