ADB  (ASIAN DEVELOPMENT BANK ) 

On August 13, 2019, the Internatoinal School Network visited the ADB office in Tokyo to interview Ms. Kodama Harumi. 

Ms. Kodama Harumi explained that while Asia seems well developed due to the fast growing economy of China, situation in Asia and the Pacific is very different from what many people imagine. There are billions of people who do not have what the people of Japan tend to take for granted. According to Ms. Kodama, there are 1.1 billion people in Asia who are living under the poverty threshold, which is $3 a day, and that accounts for 57% of the world’s poor. ADB aims to help these people and many more, who lack access to proper nutrition, running water, toilet, electricity, and hospital. ADB functions in the form of a bank, in order to fund for the development of Asia. Generally speaking, if a country has development issues such as an infrastructure problem, taxation in its own country would take place or the private sector will fund the projects.

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However, even this is difficult in some counties, as the taxpayers of some countries are poor even if the tax is low and there could also be an issue with tax collection methods. There are Official Development Assistance (ODA) organisations such as JICA to step in, in case taxation is difficult in a country, but the scale of their projects are limited. The scale of projects are easily influenced by how much fund the ODA can receive from countries, which can be affected by political situations. This is where international organisations come in to assist. International organisations such as UN give grants and technical assistance, yet how much grant they can give out is limited. International financial institutions such as ADB on the other hand, give out loan, which allow for larger scale projects, with a lot less risks and low interest rate. As interest rate that creates profit, there is an incentive to invest more and therefore more projects take place than in organisations without loans. Some examples of Multilateral Development Banks (MDBs) are the World Bank, Inter-American Development Bank, ADB, African Development Bank, Islamic Development Bank and European Bank. ADB differs from regular commercial banks due to the fact that it focuses on giving out grants and loans to developing country governments, with low interest rates and long-term lending. It also lends to the private sectors but it focuses on development impact through the lending. ADB differs from UN agencies, as they issue bonds to secure stable income and therefore is able to conduct larger projects and exert more influence. ADB functions by “borrowing money from people and companies in developed countries [through issuing bonds] in developed countries and lending to developing countries at lower interest rates”. ADB president often visits other countries, meets with the head of state, and even advice leaders of countries, which is something that the heads of other UN agencies cannot do. The issuance of bonds allows for stable income, while other UN agencies must rely on contributions from countries, which heavily depends on the economic situation of the countries. UNFPA, for example uses $910 million on its operation, while ADB has $21.6 billion to spend on its operation and therefore is able to perform on larger scale. 

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ADB Overview-2 (Nanami)

The ADB has 68 total member countries and territories, of which 41 are borrowing regional members, 8 are non-borrowing regional members, and 19 are non-regional members. Of these areas, the U.S. and Japan are the largest contributors of ADB’s projects.

To further explain the various activities of the ADB, Ms. Kodama gave us several examples in the briefing that she had provided for our interview. To begin with, ADB helps provide electricity to remote villages and connect rural areas to cities by building roads and buildings that are resilient to natural disasters. Although many Asian economies are growing rapidly, they have a long way to go in terms of infrastructure. Many regions as well as people are being left behind the fast development, with millions of people still lacking access to water, food, and other necessities. Additionally, Asia is prone to natural disasters such as typhoons, floods and earthquakes, so countries must focus on building structures that are resistant to these shocks. Within the near future, more nations must find ways to resist the dangerous effects of climate change as well. Ms. Kodama mentioned that in the Philippines, train tracks are being built well above ground level to escape the damage of massive floods. By doing so, they simultaneously avoid trespassing private properties and the troublesome compensation processes. 

ADB also focuses on building schools, training teachers, and providing vocational training so people have better access to new employment opportunities. Ms. Kodama stated that despite many people concluding secondary education, many find it difficult to find jobs after high school. For this reason, she stressed the importance of providing vocational training to fill in the gap between the labor force and the jobs available. Through education and employment services, ADB supports the empowerment of women so that they can earn their income and be independent. 

Finally, the ADB also helps enable the poor to have access to health services. Many people living in poverty in rural areas do not have sufficient access to medical facilities. According to Ms. Kodama, the growth of 30% of children under 5 years old are stunted, and 1 in 24 children die before the age of 5. By providing assistance to fund medical care, ADB aims to increase health coverage in developing Asian countries. 

Finally, ADB helps promote renewable energy. Many of these developing nations have an abundance of natural energy sources such as solar, wind, and geothermal, so ADB helps aid the development of the renewable energy sector. Countries like Indonesia with active volcanoes have many areas with potential geothermal energy, so they intend to decrease their dependence on imports of fossil fuel. For the sake of environmental sustainability, the ADB aspires to lead countries to become energy independent. 

 

ADB Overview-3 (Madoka)

ADB’s headquarters are located in Manila, where Ms Kodama worked for a decade. Ms. Kodama explained that Manila was selected as the headquarters over Tehran and Tokyo. The choice of Manila being the center for ADB is a good choice for a development institution, since the Philippines is a developing country. Ms. Kodama also noted that Filipino staff are very competent and good at English, and such labor labor would have been difficult and costly to find if the headquarters were in Tokyo. 

ADB has offices in 32 countries, mainly in Asia and the Pacific, but also in Frankfurt (for Europe) and Washington (for North America). ADB has close to 3,400 staff members in total, of which 160 are Japanese. Japan holds the largest number of staff in the ADB, which Ms. Kodama noted as being unique due to the fact that many United Nations organizations have very few Japanese representation.

In fact, Japan has always held a leading and strong role in ADB. Japan was deeply involved in the creation of the ADB, and is the largest contributor/shareholder of the ADB along with the US. Not only are Japanese staff members highest in number, but also all of the 9 past and current Presidents of the ADB are Japanese. Ms. Kodama explained that she wants more people, especially in Japan, to recognize Japan’s vital role in the ADB not only in terms of market and capital contribution but also the talented staff.

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Last year, ADB launched its long term priorities and focus areas, “Strategy 2030: Seven Operational Priorities”. The seven areas are namely:

  1. “Addressing remaining poverty and reducing inequalities”,

  2. “Accelerating progress in gender equality”,

  3. “Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability”,

  4. “Making cities more livable”,

  5. “Promoting rural development and food security”,

  6. Strengthening governance and institutional capacity”, and

  7. “Fostering regional cooperation and integration”.

In the interview, Ms. Kodama highlighted two of these seven areas. Firstly, the ADB has been focusing on its progress for gender equality. By 2030, ADB hopes that 75% of its operations can be committed to gender equality. Next, the ADB has been tackling environmental issues and climate change. The ADB hopes to invest a total of $80 billion from 2019 to 2030 on environmental projects.

The ADB also has three key approaches: “Expanding private sector operations”, “Catalyzing and mobilizing financial resources for development”, and ”Strengthening knowledge services”.

 

Finally, Ms. Kodama explained to us the eight conditions for economic development, brought by the ADB President, Mr. Takehiko Nakao, as written on the Nikkei Asian Review (5 Feb, 2015). The eight conditions are:

  1. “Infrastructure investment”,

  2. “Investment in health and education”,

  3. “Macroeconomic stability”,

  4. Open trade and investment regimes: including streamlining regulatory framework and reforming state-owned enterprises”,

  5. “Public governance: anti-corruption, efficiency of delivering services and quality of regulations”

  6. “Inclusiveness and sustainability: sharing development fruits, gender equality, environment, and climate change”,

  7. “Vision for the future”, and

  8. “Political stability, security, and good relations with neighboring countries”.

Ms. Kodama noted that the ADB views the conditions aforementioned to be the track towards economic development. She highlighted two of these conditions as being particularly relevant in the recent global economy. Firstly, she emphasized the importance of open trade and investment for development. Ms. Kodama noted that the current trend of trade frictions and trade wars should be prevented because they go against this mindset. She believes that free trade is a win-win situation, as trade results in consumers and businesses of both countries benefiting from cheaper and better quality goods. Next, Ms. Kodama highlighted the importance of inclusivity and sustainability in economic development. She noted that this comes to play when we think of the “broad context of globalization”, as development in many cases tend to leave behind a group of people in the midst of global competition. Ms. Kodama explained inclusivity as one of the root causes for development must be addressed by increasing protection for vulnerable people and investment in social sectors.

 

Message to students & Message to Japan (Madoka)

Ms. Kodama hopes that students can be more internationally engaged and open-minded. She hopes that more Japanese students can learn to speak English, as well as to work and study abroad. She explained that students should focus on building their expertise for more options for their futures, and that international institutions such as ADB do not employ just one profession, but staff with different expertise and skills. Finally, Ms. Kodama expressed her hopes that more students can gain interest and pursue their careers in international development.

Ms. Kodama noted that Japanese people still culturally tend to be shy and polite, instead of assertive. For instance, in the competitive internship program for the ADB, she sees that Japanese applicants are very humble in their CVs unlike applicants from other countries such as China, who present themselves with various additional documents and photos, which makes their applications look much more impressive. Furthermore, Japanese companies also tend to be humble in presenting what they have, and often do not participate in the bidding process. In the ADB, Japanese companies take up only 0.3%, as they do not participate in the bidding or promotional process. Ms. Kodama hopes that Japanese people and companies can be more assertive, and gain skills in promoting themselves better.

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Career (Nanami)

Ms. Kodama was born in Kagoshima, but grew up in Michigan, U.S.A. For college, she went back to Japan, where she attended ICU for both undergraduate and graduate studies. After that she worked for a parliamentarian in Japan, and was able to go to many conferences including the Beijing Conference of 1995. Throughout her studies, she has always been invested in Model United Nations and was passionate about working for the UN. She was later recruited by the UNFPA where she worked until she assumed her position at the ADB this May.  

 

Challenge (Gender Equality) (Nanami)

When asked about some of the challenges she faced throughout her career, Ms. Kodama stated that it was difficult to balance her work and family life. She had twin boys while working in New York and found it nearly impossible to continue her previous way of life. Eventually, she made the decision to move to Manila where she was able to focus on both her children and her career. 

Another difficulty she faced while working was gender issues. Ms. Kodama felt that Japan still has a long way to go in terms of gender equality, as it ranks 110th out of 149 countries. This is significantly low for a developed country with one of the highest standards of living in the modern world. She says she always feels these gender issues while working in Japan, because there are not many women working for Multilateral Development Banks or any other major organizations. Most of the stakeholders she meets with are predominantly men, and she feels the need to speak up because she is the first female representative in her office. She has been away from Japan for 18 years, but has said that not much has changed in terms of gender equality. Although she is not obliged to fight for gender issues, she still aspires to become a role model for women.

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Peace (Rino)

When asked what Ms. Komada thinks are the first steps towards world peace, she mentioned that people must be aware of what is going on around the world. She thinks that Japanese people lack access to international news, as they tend to be underrepresented in Japanese media, and only news relating to North Korea or the United States make the headlines. She compared the headlines of 4 Japanese newspapers with that of New York Times and explained that Japanese papers only briefly mention the conflict in Cashmere, while New York Times uses it as the headline and puts a photo of a man in pain. She pointed out that Japanese media tends to self-censor news that could offend or upset its readers and audience. She believes that Japanese media need to expose people to what is really going on in the world, for Japanese people to understand what the world needs in order to achieve world peace. 


 

Passion + Goals (Madoka)

Ms. Kodama has been very passionate about working in the ADB, and about her role as the Representative of the Japan Representative Office. As a professional communicator, Ms. Kodama enjoys speaking to ADB’s stakeholders as well as the general public, and strives to translate the technical language of development to what everyone can understand. She hopes that she can tell the story of ADB’s efforts in Asian development, and to disseminate information about developing situations in Asia to a variety of audiences. She hopes that she can communicate such issues clearly, so that even grade school students can understand. Henceforth, as Japan is a donor country, Ms. Kodama’s goals as the Representative of the Japan Representative Office is to build liaisons and communicate. Moreover, Ms. Kodama added that ADB is still not well known in Japan, so she wishes to speak more about ADB and development to Japanese people. She believes that the Japanese should be proud of their nation’s contribution for ADB, and at the same time, hopes to give back to Japan as her home country. Finally, in addition to her goals for the Japan Representative Office, Ms. Kodama expressed her passion as a working woman, and hopes to inspire and become a role model for young women especially in Japan.

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