May 23, 2014
The 47th annual meeting of the Asian Development Bank was held May 2-5 in Astana, the capital city of Kazakhstan. During the meeting, from JICA, Vice-President Shigeru Kiyama and Vice-President Kiyoshi Kodera attended the public seminars “Public Private Partnership (PPP) seminar” and “Post Millennium Development Goals (MDGs) seminar,” respectively, and JICA co-hosted a side event on sustainable urban development with the French Agency for Development (AFD). Focusing on themes that will become critical during review of the post-2015 Development Agenda, which will gain momentum after the U.N. General Assembly this fall, JICA took the opportunity of the ADB annual meeting to proactively send messages to external stakeholders.
From left, JICA Vice-President Shigeru Kiyama, moderator Julian Smith from PricewaterhouseCoopers, Managing Director Laurene Mahon from Canadian Imperial Bank of Commerce, and Vice-chairman Galymbek Mamrayev from Public Private Partnership Center in Kazakhstan.
On May 2, the first day of the annual meeting, ADB and the private consulting firm PricewaterhouseCoopers co-hosted a seminar entitled “Vision to Reality: Making PPPs Work.” JICA Vice President Shigeru Kiyama, Parliamentary Secretary to the Treasurer Steven Ciobo from the Department of Treasury in Australia, Managing Director Laurene Mahon from Canadian Imperial Bank of Commerce (CIBC), Secretary Arvind Mayaram from the Department of Economic Affairs, Ministry of Finance in India, and Vice-chairman Galymbek Mamrayev of PPP Center from host country Kazakhstan appeared as panelists, and they discussed lessons learned, challenges and future perspectives relating to past efforts on PPP projects.
With a substantial increase in the inflow of public funds to developing countries in the background, PPPs are attracting attention as one of the tools of development funds in the post-2015 Development Agenda (1) discussion.
Parliamentary Secretary to the Treasurer Steven Ciobo from the Department of Treasury looked back at the projects of the past 25 years in Australia. As a lesson learned, he said that the results of approximately 130 projects did not necessarily come out as successes. “It is important for the government to flexibly respond to risk allocation between the public and private sectors even further, based on changing market prices and finance arrangements that differ with each project,” he pointed out.
Regarding major reasons for the failure of PPP projects, Managing Director Laurene Mahon, from the CIBC, said, “For returns corresponding to risks required by the private sector, upon designing PPP projects, the public sector doesn’t necessarily consider overall project costs including maintenance and operation costs, as well as an appropriate business scale suitable for the private sector.” She emphasized that failure is caused by a “lack of ability relating to PPP projects in the government staff.”
Secretary Arvind Mayaram of the Department of Economic Affairs, Ministry of Finance, introduced various institutions for promoting PPP and efforts on solving the bottlenecks in India, the country that has now grown to become one of the world’s leading PPP markets. As a bottleneck of PPP projects, he pointed out that it is difficult for PPP participants enterprises or Special Purpose Companies (2) to internally source long-term funds. Vice-chairman Galymbek Mamrayev from Kazakhstan PPP Center said it is also a challenge for PPP in Kazakhstan.
JICA Vice-President Kiyama said he recognized that “regarding the role-sharing between the public and private sectors, aid agencies can play a major role, from the viewpoint of supporting capacity and ability of governments that lack experience with practical accomplishments.” He explained JICA’s proactive efforts by touching on actual examples in Asia. Also, as a risk in PPP projects, he listed site acquisition among others, and raised the necessity of considering these risks at the time of project planning.
From left, Chief of Staff for the Minister Helder Lopes, Ministry of Finance in Timor-Leste; JICA Vice President Kiyoshi Kodera; moderator Veronica Pedrosa, Al Jazeera; Shamshad Akhtar, executive secretary, U.N. Economic and Social Commission for Asia and the Pacific; and Erik Solheim, chair of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD).
On May 4, a seminar entitled “Moving beyond the MDGs after 2015” was co-hosted by the ADB, the U.N. Development Programme (UNDP) and the U.N. Economic and Social Commission for Asia (UNESCAP). JICA Vice President Kiyoshi Kodera; UNESCAP Executive Secretary Shamshad Akhtar; Erik Solheim, chair of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD); and Chief of Staff for the Minister Helder Lopes, Ministry of Finance in Timor-Leste, appeared as panelists. They gave an overview of initiatives in the Asia Pacific Region to achieve the MDGs and discussed contributing to the international Post-MDG debate from the standpoint of the Asia-Pacific Region and the funding necessary for development.
While each panelist pointed out that the proportion of ODA in development assistance is tending to decrease over the long term because of an increase in fund flows from the private sector, they all agreed that ODA remains an important resource for least developed countries and fragile and conflict-affected countries. Also, they acknowledged the value of MDGs overall, but at the same time, mentioned various lessons learned in advance of the post MDGs, and new development challenges facing the international community amid expanding globalization.
UNESCAP’s Akhtar evaluated the MDGs by saying they “succeeded in positioning people at the center of development” and said “simple, clear and flexible goal setting” contributed to them. Also, in advance of the Post 2015 development agenda, she talked about the necessity of continuous efforts on outstanding goals, and added “expanding inequality,” “destabilization due to series of conflicts” and “an increase in vulnerability to natural disasters and climate changes” as new agenda items.
Solheim from DAC praised the social and economic development in Asia during the past 20 years, including progress on MDGs, confirmed that Asia is setting an example to the world, and pointed out that behind the success a clear political will and strong political leadership made a significant contribution. For implementing the Post 2015 Development Agenda also, political will and leadership will remain critical, and the common goals themselves could be “fairly general,” he said. It would be realistic that based on that, each country set its goals depending on its individual situation, he emphasized.
Regarding MDGs and Post MDGs, Lopes from the Ministry of Finance in Timor-Leste said from the viewpoint of fragile and conflict-affected countries, that “peace and stabilization” lacks as a precondition for these countries to tackle development, and this perspective should be reflected in the Post MDGs. Also, he emphasized the importance of governance in implementing development, specifically the need for a capable public institution.
JICA Vice-President Kodera began by pointing out that according to a report of the World Bank and other sources, private flow (Foreign Direct Investment) now accounts for 60 percent of the fund flow into developing countries, whereas public assistance is a mere one percent. He indicated a drastic change in the situation surrounding the development fund.
He then emphasized that for the post MDGs, sustainable growth continues to be critical, and that growth that is more inclusive, resilient and environmentally sustainable will become important. Also he emphasized that human-centered development based on ownership by beneficiary countries, inclusive partnership and people-centered development based on human security will be a guiding principle. And he emphasized the importance of political leadership to set the agenda.
Kodera also stressed the importance of universal health coverage, which falls under the health sector in the MDGs agenda, and said that sector is showing delays in progress. And he introduced JICA’s efforts on disaster risk management, which has appeared as a new agenda item.
Hideaki Maruyama, Director/Deputy Head of the Office for Global Issues and Development Partnership, Operations Strategy Department, JICA, gives a presentation on sustainable urban development.
On May 2, JICA co-hosted a side event entitled “Planning and Financing Sustainable Urban Development” with AFD. “Sustainable urban development” and climate change are common agenda items in the post MDGs for JICA and AFD, and the two have co-hosted side events in international meetings. The seminar was held also in consideration of France becoming a host country of the 21st session of the Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change.
JICA Vice-President Shigeru Kiyama gave an opening speech on the direction urban development should aim toward, with such keywords as “compact,” “smart” and “resilient toward risks such as natural disaster.” After that, JICA and AFD each introduced case studies of their specific efforts, with JICA focusing on integrated urban development plan and AFD on finance. Also, Mariko Sato, chief of the United Nations Human Settlements Programme (UNHABITAT) Bangkok, joined the discussion and pointed out the necessity of a new approach in urban development and the importance of governance.
1: Development goals after 2015, the target date of the MDGs.
2: A company set up by a financial organ or business corporation with the intent of issuing marketable securities for procuring funds.