ADB is an international development finance institution whose mission is to help its developing member countries (DMCs) reduce poverty and improve the quality of life of their people. Established in 1966, ADB is owned and financed by its 67 members, of which 48 are from the Asian region and 19 from other parts of the globe. ADB’s main partners are Governments, the private sector, nongovernment organizations, development agencies, community-based organizations and foundations.
Under Strategy 2020, a long-term strategic framework adopted in 2008, ADB will follow three complementary strategic agendas: inclusive growth, environmentally sustainable growth, and regional integration. In pursuing its vision, ADB’s main instruments comprise loans, technical assistance, grants, advice, and knowledge. Although most lending is in the public sector - and to governments - ADB also provides direct assistance to private enterprises of developing countries through equity investments, guarantees, and loans.
As Asia’s main regional development partner, ADB has, for over 40 years, recognized the benefits of trade in its efforts to reduce poverty. Through its regional, subregional, and other programmes fostering cooperation - and its many demand-driven country-specific projects - ADB acts as catalyst, broker, and financier to help its DMCs gain the skills and build the infrastructure required to boost trade. ADB’s trade-related work is multifaceted, extending from its many projects - simple and complex - to a substantial body of trade-related research, complemented by trade-related training for DMC officials.
Since 1994, ADB has been involved in regional cooperation and integration activities and has played an active role in the evolution of regional and subregional initiatives, including ASEAN (Association of South East Asian Nations), GMS (Greater Mekong Subregion), SASEC (South Asia Subregional Economic Cooperation), SECSCA (Subregional Economic Cooperation in South and Central Asia), CAREC (Central Asia Regional Economic Cooperation), BIMP-EAGA (Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area), IMT-GT (Indonesia-Malaysia-Thailand Growth Triangle), and the Pacific Plan. ADB’s Regional Cooperation and Integration (RCI) Strategy, endorsed by the ADB’s Board of Directors in July 2006, can complement its long experience and provide a framework for moving forward. Three of its four components are directly related to trade:
- Cross-border infrastructure and related services (Pillar 1)—trade facilitation and customs modernization;
- Trade and investment (Pillar 2);
- Money and finance (Pillar 3)—mobilizing savings for trade-related infrastructure, investment, and possible trade finance.
ADB is forging partnerships throughout the region and with global institutions (such as the WTO and WCO) to foster the creation and dissemination of development knowledge, develop and implement training programmes, and build capacity and expertise in various trade-related initiatives. Examples are:
- Aid for Trade Initiative. In 2006, ADB began to work with global partners, such as the WTO, World Bank, OECD and other regional development banks (RDBs), in support of the Aid for Trade Initiative. ADB played an active role in the WTO Aid for Trade Roadmap for 2007-2009, including membership in the WTO Advisory Group and the Technical Working Group on global monitoring of aid for trade flows, and co-hosting the Asia-Pacific Aid for Trade Regional Review in Manila on 19-20 September 2007. In cooperation with the WTO, ADB produced the regional Aid for Trade Report “Aid for Trade in Asia and the Pacific: Its Role in Trade-Driven Growth.” In May 2012, ADB co-hosted, with the WTO and the Korean Government, a regional review meeting with the aim of producing a second regional report in 2013. This will be the regional input for the WTO’s global Aid for trade Review in the summer of 2013. ADB also helps coordinate the many players—including donors, recipients, development partners—of aid for trade as the secretariat to the Regional Technical Group for Asia and the Pacific.
- ADB has collaborated with UNESCAP through the FTA database, a manual on trade facilitation, the Aid for Trade Initiative for Asia and the Pacific, and several capacity building activities.
- ADB’s CAREC Unit has served as the programme secretariat since March 2000. CAREC is an alliance of multilateral institutions comprising ADB, the European Bank for Reconstruction and Development, the IMF, the Islamic Development Bank, UNDP, and the World Bank. CAREC also operates in partnership with other key regional cooperation programmes and institutions, including the Shanghai Cooperation Organization and the Eurasian Economic Community.
- ADB has collaborated with Japan Customs (Ministry of Finance), WCO, and JICA under a trade facilitation initiative proposed by Japan Customs. The Government of Japan contributed $25 million to ADB up to 2015 to implement this initiative in collaboration with above three institutions. As a part of this initiative, ADB, in collaboration with WCO, organized a regional workshop on time release study planning for ASEAN member countries in December 2011.
- Recently, ADB and the Inter-American Development Bank (IDB) have agreed to share access to their trade finance programmes, linking more than 100 financial institutions to support trade between companies in Asia and the Pacific and Latin America and the Caribbean.
- The Asian Development Bank Institute (ADBI) is collaborating with Asian think tanks, the Latin America/Caribbean and Asia/Pacific Economics and Business Association; the Global Development Learning Network; and the Network of Asian River Basin Organizations.
TCB activities described in this guide
- Policy advocacy
- Training and seminars
- Trade-related manuals
- Research on trade and investment
- Free trade agreements (FTA) and trade indicators database for Asia
- Initiatives for subregional programs
- Equity investments
- Loans and guarantees
- B Loan (Complementary Financing Scheme)
- Trade Finance Facilitation Programme (TFFP)
- The Asia-Pacific Trade Facilitation Forum (APTFF)
- SASEC Information Highway project
- Promotion of regional supply chains
- Capacity Development for Development Effectiveness initiative
- IDB and ADB’s Joint Programme
As the Regional Development Advisor for the Brunei Darussalam – Indonesia – Malaysia – The Philippines—East ASEAN Growth Area (BIMP-EAGA), ADB in 2007 approved a US$600,000 technical assistance (TA) to strengthen the subregion’s Customs, Immigration, Quarantine and Security (CIQS) Task Force in furthering its trade facilitation agenda. The guiding principle is to adhere to relevant international standards and ASEAN frameworks, while narrowing operational gaps in EAGA’s focus areas through focused capacity building. In 2010, ADB funded a US$1.5 million follow-on assistance to support the implementation of the CIQS Action Plan to enhance trade facilitation effectiveness and increase private sector engagement and compliance. In delivering its capacity enhancements, ADB is working closely with countries’ agencies as well as international technical bodies including the WCO, IMO and other development partners. Enhanced knowledge and skills of local officials on facilitating and securing trade based on applicable international standards on customs, immigration, agricultural and health quarantine and port security has been contributing to better coordination among border agencies and regular interaction and collaboration with private sector stakeholders. Lessons learned and best practices in ADB’s support for BIMP-EAGA has also been shared with similar subregional cooperation initiatives under ASEAN, particularly in the Indonesia – Malaysia – Thailand – Growth Triangle (IMT-GT), who recently established a CIQ Task Force and exploring ADB’s further assistance.
The Central Asia Regional Economic Cooperation (CAREC) Program promotes economic development through a committed partnership of 10 countries and 6 multilateral institutions that have jointly invested over US$19 billion since 2001 in transport, energy, and trade projects with a regional focus. ADB has invested over US$6 billion in CAREC-related projects that focus on combining physical infrastructure improvement in transport and energy with the softer side of trade facilitation and policy liberalization. Over US$11 billion has been committed to CAREC transport and energy projects through ADB’s multitranche financing facility, with 22 tranches already approved. Upgrading of the six CAREC transport corridors that traverse the 10 member countries provides greatly improved connectivity, with vehicles and goods moving faster along the corridors and crossing border points with greater ease and less cost. Funded by CAREC governments and multilateral partners, several projects along CAREC Corridor 1, running from the People’s Republic of China, through the Kyrgyz Republic, and across Kazakhstan, clearly demonstrate not only CAREC’s ability to link landlocked countries with regional and global markets, but also ADB’s successful coordination with CAREC’s other multilateral financing institutions. ADB’s Regional Customs Modernization and Trade Facilitation Project between the Kyrgyz Republic and Tajikistan helped develop automated information systems and rehabilitate border infrastructure to make border crossing more efficient. ADB’s Regional Power Interconnection Project and the recently approved Regional Power Transmission Project are gradually reviving energy trade within the Central Asian countries, as well as exporting power to Afghanistan. The ADB CAREC Regional Power Master Plan TA project provides essential strategic and practical direction in developing central and south Asia energy connectivity and trade.
In 2011, a 10-year strategic framework—CAREC 2020—was produced to guide the program toward the goals of expanded trade and improved competitiveness. CAREC 2020 envisages the gradual transformation of the transport corridors into logistics and then economic corridors, and ADB is creating a roadmap to identify and prioritize the mutual regional benefits of economic corridor development. The ADB-supported CAREC cross-border transport agreement (CBTA) ratified in 2011 by the Kyrgyz Republic and Tajikistan and implemented along Corridor 5 will further ease transnational movement of people and trade through the CAREC region. Additional CAREC members anticipate future accession to the CBTA. CAREC’s growing focus on private sector engagement is underpinned by regular business development forums, as well as the creation of a private sector arm—the CAREC Federation of Carrier and Forwarder Associations—that participates directly in trade facilitation activities. To support and strengthen the implementation of CAREC initiatives, the CAREC Institute is dedicated to knowledge generation, provision, and management.
Founded in 1992, the GMS Economic Cooperation Program (GMS Program) is now entering its third decade. In two decades of its existence, the GMS program has established itself as a flexible, result-oriented, and project-based vehicle for furthering regional cooperation and integration. The thrust of the GMS program has been to enhance connectivity, improve competitiveness, and foster a stronger sense of community. As of June 2012, US$15 billion in investment projects have been supported by the GMS Program with support from the national governments, other development partners and private sector cofinancing. Of the total investments, 78.4% have been in the transport sector. To complement the investments in hard infrastructure, particular attention has been given to “software” aspects such as trade facilitation and, in the context of land-based cross-border trade, transport facilitation to facilitate movement of vehicles across borders. The GMS CBTA is a prime example of TTF initiatives under the GMS program and was introduced as a pilot project along the East-West Economic Corridor (EWEC) in June 2009. The border crossing time along the EWEC has been cut substantially. Since mid-2012, bilateral agreements signed between Cambodia and Thailand, and PRC and Viet Nam enable trucks and buses from both countries to cross the border and enter into each other’s territory. ADB continues to support the TTF agenda in the GMS and is currently providing support to enhance transport and trade facilitation, build institutional capacity, strengthen institutions, improve coordination among the various border agencies.
In 1996, four of the seven South Asian Association for Regional Cooperation (SAARC) members – Bangladesh, Bhutan, India, and Nepal – formed the South Asian Growth Quadrangle (SAGQ) to accelerate sustainable economic development in these four countries. At the request of SAGQ, ADB launched and supported the South Asia Subregional Economic Cooperation (SASEC) Program through several regional technical assistance (RETA) projects. The SASEC’s mission is: From poverty to growth- transforming challenges into opportunities.
From 1997 – 2010, SASEC achieved significant achievements in a number of the areas such as transport, energy, trade and investment, tourism, environment, and ICT. SASEC cooperation had major breakthroughs in 2011. Under the aegis of ADB, SASEC Trade Facilitation and Transport Working Group (TFTWG), and Energy Working Group Meetings met in October 2011 in Bangkok, Thailand and for the first time agreed on an Action Plan which outlined concrete TA and investment projects in transport, trade facilitation, and energy. The TFTWG reconvened in March 2012 in Kolkata, India and endorsed the list of TA and investment projects for transport and trade facilitation. These activities demonstrated a continued commitment of SASEC countries to strengthen transport connectivity, trade facilitation and energy cooperation.
Since the inception of SASEC, ADB has informally functioned as its Secretariat. ADB’s support for SASEC consists of: (i) capacity building and institutional strengthening of the program; (ii) various regional cooperation initiatives; and (iii) ADB-financed projects and TA. The ADB regional, sectoral, and project preparatory technical support to SASEC reached more than US$15.7 million. Investment projects on infrastructure, tourism, energy, and ICT totaled US$264.9 million.
In ADB’s Pacific region, the Pilot Border Trade and Investment Development Project and accompanying regional TA are focused on removing infrastructure bottlenecks and strengthening institutions for border management and trade between Papua New Guinea (PNG) and Timor Leste with Indonesia. With Timor Leste’s bid to join the ASEAN, trade facilitation initiatives have become critical to forging economic ties with other growing economies in Asia.
For PNG, the project is: i) providing border facilities; ii) supporting the effort to draft investment policy legislation; iii) preparing a telecommunication strategy; iv) establishing a one-stop service office of the Border Development Authority (BDA) to promote trade, investment, and tourism in the border town of Vanimo in the western province; v) supporting efforts to improve PNG’s human capital base in the areas of trade and investment promotion, business entrepreneurship and administration, information technology, and Indonesian language proficiency; and vi) supporting improved human development in terms of health and education in five border villages. The ADB project was launched in 2010 and will be completed in 2018. Construction of staff housing for border facilities is almost complete, and an investment policy and telecommunication strategy is being formulated. Under the project, the BDA is also providing direct cash transfers to needy households in the project area to improve local conditions in the areas of safe motherhood, at risk children, power supply, sanitation, and HIV/AIDS prevention.
The regional TA in PNG and Timor Leste complements the infrastructure and other investments, focusing on strengthening institutional capacity for border management and services and cross border trade and tourism. Assistance under the TA is focusing on the ‘softer’ side of developing cross border trade agreements and trade facilitation. Preparatory work for the establishment of a “National Single Window” to harmonize customs, immigration, and quarantine functions to improve efficiency of border management and reduce the overall cost of doing business across borders is underway.