IMF-JICA Conference on ‘Recovery from the Pandemic in Developing Asia: Achieving Inclusive and Sustainable Growth with Sound Fiscal Management’

The conference "Recovery from the Pandemic in Developing Asia: Achieving Inclusive and Sustainable Growth with Sound Fiscal Management” was held in collaboration with the International Monetary Fund (IMF) and JICA on Feb. 14, 2023. Delegates from 13 countries in Asia gathered in Tokyo, to discuss fiscal and monetary policies for economic recovery from the compounding crises of the COVID-19 pandemic, Russia's invasion of Ukraine, energy and food price hikes, and climate change.

Among presenters and discussants addressing each agenda, Hirota Koki, visiting fellow, Makimoto Saeda, principal research fellow, and Harada Tetsuya, executive senior research fellow from JICA Ogata Research Institute took part in the conference.

Hirota Koki, visiting fellow at the JICA Ogata Research Institute and a professor at the Graduate School of Humanities and Social Sciences, Saitama University, presented the results of a study he conducted with colleagues to estimate the financing needs for social infrastructure—education, health, public housing, and government building—in 45 Asian countries for the period of 2021-2030. The study also estimates the additional financing requirement to respond to the COVID-19 pandemic. It concludes that financing needs are estimated at US$1.7 trillion annually and US$1.8 trillion with the COVID-19 response scenario. These figures include the needs for rehabilitation and replacement, which are not usually included in such estimates. Finally, to address the estimated significant financing gap, he made several policy recommendations, including more integrated funding, such as greater use of land value capture, and improved investment efficiency, such as multipurpose use of facilities.

Discussions on Universal Health Coverage (UHC) in the second session were instigated by Tobe Makoto, senior advisor of the Human Development Department, JICA. In his presentation, Tobe showed an overview of investment in health toward resilient universal health coverage (UHC) by illustrating that UHC is an essential requisite for achieving the SDGs. To the ministers of finance, he conveyed a message that investing in health has a lot of good returns, and the role of the ministry of finance is to promote more and smarter investment in health to protect poor and vulnerable people.

Lkhagvasuren Byadran, governor of the Bank of Mongolia, explained how the pandemic and the anti-pandemic law imposed by the Mongolian government affected the reliance of his country on exports amounting to 80% mainly directed to China and how border closure led to drastic price hikes.

Harada Tetsuya, executive senior research fellow at the JICA Ogata Research Institute noted the need to address the long-term negative effects of delays in education, health, and infrastructure development on growth and productivity, known as “scarring effects”, in the recovery process from the pandemic and subsequent economic crisis. Given the limited fiscal space, Harada also highlighted the importance of cost-effectiveness when the governments allocated expenditure to social sectors. Regarding the lessons from the debt crisis, he added that debt management should be of concern about not only how much a country is borrowing but also for what projects these loans are used, referring to cases where parts of loans were used for political ends with low return.