Keynote Speech by Ms Indranee Rajah, Second Minister for Finance at the 2022 ADB Southeast Asia Development Symposium (SEADS) on 16 March 202216 Mar 2022
Ladies and Gentlemen,
It is a great pleasure to be here with you today at the third edition of ADB’s Southeast Asia Development Symposium to share some thoughts on achieving sustainable recovery in the Southeast Asian region.
2. It has been more than two years since the COVID-19 pandemic started. Economies in Southeast Asia have suffered one of the sharpest contractions since the Great Depression.
a. We have seen enormous setbacks in achieving the sustainable development goals.
b. COVID-19 has unfortunately widened human capital, digital and gender gaps; and
c. accentuated inequalities and fragilities.
3. We were hopeful for a steady recovery this year.
a. Until only recently, the region had indeed shown promising signs of recovery.
b. However, the downside risks are now all too real.
c. The most immediate of which is the disruption to supply chains and rising oil and commodity prices.
d. We will have to contend with the higher-for-longer inflation and prolonged geopolitical instability.
e. If not managed well, rising prices can also have a profound impact on the social, economic and political stability of our societies.
f. And we cannot afford to lose sight of the longer-term risks of future pandemics; and, more importantly, climate change.
4. Governments have the responsibility to take concerted steps to mitigate these challenges.
a. This will require us to strengthen partnerships with the multilateral development banks, private sector and philanthropies to tackle health and climate risks, invest in sustainability and drive development efforts.
5. Let me touch on three areas where I think we can build back better and in a more sustainable manner.
Strengthen Supply Chains and International Trade
6. First, to strengthen supply chains and international trade.
7. The pandemic has accentuated the role of logistics as a critical enabler of the world’s economy.
a. We will need to collectively address disruptions in global supply chains and uphold an open, stable and rules-based trading system.
b. To do so, we should build on the current global supply network to strengthen trade and supply chain connectivity – and we need to do so sustainably.
8. There is scope to integrate green solutions in various stages of the logistics value chain which will not only improve productivity, but also minimise our carbon footprint.
a. YCH Group is an example of a logistics company that has imbued sustainability into its operations and has taken the lead in greening the supply chain.
b. In fact, every sector should consider what more it can do to reduce its emissions to achieve our global climate ambitions.
Catalyse Sustainable Infrastructure
9. Second, we need to catalyse sustainable infrastructure.
10. Infrastructure is and will continue to be an important driver of growth for Southeast Asia.
a. With more adverse weather patterns that threaten low-lying coasts, it is critical for the region to build sustainable and resilient infrastructure.
b. Failure to invest adequately in this area can result in dire economic, environmental and social impact.
11. Even before the pandemic, ADB estimated that from 2016 to 2030, Southeast Asia needs about US$210 billion annually for investments in climate resilient infrastructure.
a. Public finance alone cannot meet this need.
b. Private and institutional resources must be mobilised to bridge this gap.
c. The infrastructure debt financing platform launched by ADB, Temasek, HSBC and Clifford Capital is a good example of deploying blended finance to boost the bankability of sustainable infrastructure projects in Asia.
d. I would also like to congratulate ADB on coming up with innovative platforms like the Energy Transition Mechanism announced in Glasgow last year. We look forward to its success and wider application in the region.
Scale Up Sustainable Finance
12. Third, we must scale up sustainable finance.
13. To transit towards a greener, low-carbon future, both governments and businesses need to increasingly tap on green financing to meet their sustainability commitments.
a. The financial sector can be a catalyst for change by financing transition activities and channelling capital to environmentally friendly projects and technologies.
14. Singapore hopes to work with the region to support this transition.
a. The Monetary Authority of Singapore (MAS)’s Green Finance Action Plan supports:
i. mainstreaming green and sustainable financing;
ii. developing capabilities to originate innovative sustainable financing solutions; and
iii. enabling credible sustainability-related reporting and disclosures.
b. It is working with countries in the region to:
i. develop an ASEAN Taxonomy for Sustainable Finance;
ii. support companies globally to invest in green and transition projects, as well as
iii. move to more sustainable business models through the Sustainable Bond Grant Scheme and Green and Sustainability-linked Loan Grant Scheme.
15. I hope to see more partnerships between MDBs and financial institutions to deepen Asia-focused sustainable finance expertise in the region.
16. In closing, I would like to commend the ADB again for bringing us together to think deeply about how Southeast Asia should rebuild.
a. I believe that only by putting sustainability at the core of our efforts can we chart a better and greener future for all.
b. And I know that ADB believes in this as well.
17. Thank you all very much.