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Sector Developments and Opportunities in Asia and the Pacific

Dr. Robert GuildChief Sector OfficerAsian Development Bank

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Outline• Strategy 2030

What does it mean for businesses?

• Trends in Sectors and Thematic AreasLinkages with the Operational PrioritiesHistoric Developments and Regional DistributionExpected Trends and Opportunities

• Discussion

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Strategy 2030

• 1 Strategy• Plans for 7 Operational Priorities• Frameworks for 15 Sectors and

Thematic Areas

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Strategy 2030: Seven Operational Priorities

Promoting rural development

and food security

Strengthening governance

and institutional capacity

Fostering regional cooperation

and integration

Addressing remaining poverty and reducing

inequalities

Accelerating progress in

gender equality

Tackling climate change, building climate and disaster resilience, and enhancing

environmental sustainability

Making cities more livable

Key Approaches

Expanding private

sector operations

Catalyzing and mobilizing financial

resources for development

Strengthening

knowledge services

At least 75% of committed operations by 2030

At least 75% of committed operations by 2030, $80 billion from own resources from 2019–2030

$1 in private sector operations financing matched by $2.50 of cofinancing

1/3 of ADB operations by 2024

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Sector and Thematic Operational Frameworks www.adb.org/focus-areas

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Trends in Transport

Asian countries need sustainable transport systems – trains, buses, ferries, bike paths – that move people in a low-carbon, safe, accessible, and affordable way.

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Operational Priorities Transport Sector Contributions

Addressing Remaining Poverty and Reducing Inequalities

Non-income dimensions of poverty and vulnerabilityReduce inequality in access to opportunities➢ Rural access➢ Equitable access and mobility in cities➢ Regional connectivity ➢ Ensure transport continues to be an enabler of development

Accelerating Progress in Gender Equality

Improve access of the poor, women and vulnerable Positive effects on the lives of women➢ Transport systems that are safe and accessible for all ➢ Rural roads with community employment opportunities➢ Achieve gender targets in transport sector support

Tackling Climate Change, Building Disaster Resilience

Implementing sustainable and urban transportation strategiesClimate- and disaster-resilient infrastructure design➢ Promote low carbon transport modes (urban public transport, railways, inland

waterways, electric vehicles) ➢ Ensure climate resilience in project design➢ Achieve climate change targets in transport sector support

Strategy 2030: Key Linkages (Transport Sector, 1/2)

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Operational Priorities Transport Sector Contributions

Making Cities More Livable Urban mobility and support mass public transportDeveloping integrated urban plans➢ Continue growth of urban transport sub-sector (public transport, non-

motorized, and ITS (Intelligent Transport Systems))➢ Expand support for integrated system management and operation efficiency

Promoting Rural Development and Food Security

Improve market connectivity, focus on rural roads ➢ Re-strengthen rural transport focus, including links to other sectors➢ Rural roads, tracks and waterways

Strengthening Governance and Institutional Capacity

Strengthen service delivery Effective operation and maintenance of infrastructure ➢ Asset management for road, rail, urban transport and ports➢ Utilize financing modalities that best suit type of support➢ Build capacity and institutions able to manage/operate transport systems.

Fostering Regional Cooperation and Integration

Enhance connectivity and cross border infrastructure needsMulti-modal transport links ➢ Cross border transport infrastructure and systems (road, rail, ports, logistic

operations, and border crossings).➢ Support for intra- and inter-regional programs

Strategy 2030: Key Linkages (Transport Sector, 2/2)

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Historic Developments and Regional Distribution (Transport)

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Road Transport (Non-Urban) Rail Transport (Non-Urban) Water Transport (Non-Urban)

Air Transport Transport Policies and Institutional Development Urban Public Transport

Urban Roads and Traffic Management Multi-Modal Logistics

1990s 2000s 2010 onwardsAverage: $880 million/year

16% ADB totalAverage: $2 billion/year

26% ADB totalAverage: $3.1 billion/year

26% ADB total

72%

11%

3% 14%

79%

15%

2% 4%

Road Transport (Non-Urban) Rail Transport (Non-Urban) Urban Other

69%

11%

12%

8%

Commitments

Transport Investments by Subsector 1990-2021 (loans and grants)

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Expected Trends and Opportunities (Transport Sector)

Tech TSG approach

Design and construction Value engineering (tunnels, bridges, metro, rail – international best practices and standards – introduction of new infrastructure to some DMCs)Lifecycle cost (asset management and budget allocation)Quality infrastructure (regional standards for better integration and higher standards)

Road and rail asset management and system operations

Drones (traffic management, geometry and surveys, project design, monitoring and asset management)Smartphones (apps for network assessment, user interface – RoadRoid, WAZE)Financing modalities (support for suitable KPIs – road condition, safety)

Intelligent Transport Systems (ITS)

Conventional ITS (traffic signals, system area control)Advanced ITS/5G (vehicle to infrastructure or vehicle to vehicle communication)Payment systems (contactless payments, real-time road pricing/tolls)Passenger interface and information systems (citymapper app)

Big Data Traffic control and system management (real-time use of large data)Operational control and system efficienciesLogistic services (Uber for freight)

e-Mobility and autonomous vehicles

Transport policy for fleet renewal and uptake of technology (e-vehicles)Infrastructure requirements - charging stations, street furniture.

ITS – Intelligent Transport Systems

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Trends in Energy

Energy demand is projected to almost double in the Asia and Pacific region by 2030. There is an urgent need for innovative ways to generate power in a socially, economically, and environmentally sustainable manner.

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Operational Priorities Energy Sector Contributions

Addressing Remaining Poverty and Reducing Inequalities

Clean energy for meeting basic needs (lighting and cooking); skills development and job creation with renewable energy; productive use of energy to generate income; solar home systems

Accelerating Progress in Gender Equality

Clean energy access relieves women for fuel collection which allows women more time to pursue income-generating activities

Tackling Climate Change, Building Disaster Resilience

Integrating climate change mitigation (GHG reduction) and adaptation into project design

Making Cities More Livable Supporting smart electricity supply to cities, energy efficient buildings and electric vehicles, rooftop solar for household and commercial buildings

Promoting Rural Development and Food Security

ADB will support use of solar powered pumps for smart irrigation to replace diesel or electricity powered pumps

Strengthening Governance and Institutional Capacity

Promoting energy sector reforms and developing institutional capacity for renewable energy development

Fostering Regional Cooperation and Integration

Promoting energy connectivity (power interconnections, gas pipelines), and sharing best practices and technologies in renewable energy development

Strategy 2030: Key linkages (Energy Sector)

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▪ Total approvals in the Energy Sector in 2017 amounted to $5.22 billion including $1.41 billion from PSOD (27% of total energy sector lending)

Historic Developments and Regional Distribution (2017)

In $ million CWRD EARD PARD PSOD SARD SERD Total

Total 1,054.76 499.00 67.90 1,409.95 1,191.00 1,000.00 5,222.61

3.2

4.3

2.4

3.8

2.6

5.0

4.0

5.2

5.7 5.86.0

1.8

2.12.4 2.4 2.4 2.5

2.1 2.0

2.62.8

3.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Energy Sector Lending (OCR & ADF) Clean Energy Investments (including co-financing)

Climate Finance in the Energy Sector (OCR & ADF)

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Energy generation

– Distributed renewable energy (rooftop solar, mini-grids)

Transmission and distribution

– Smart grids systems with energy storage for renewable energy integration and frequency regulation

End use efficiency and demand-side response

– Digital technologies to enhance energy efficiency in industry, buildings

Deployment of advanced technologies

– Waste-to-energy projects

– Smart and mini-grid systems including energy storage

– Floating solar power systems

– Carbon capture and storage

Expected Trends and Opportunities (Energy Sector)

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Trends in Urban Development

Cities generate over 80% of gross domestic product (GDP) in many countries of the Asia and the Pacific and are engines of economic growth that have lifted millions from poverty. But as they swell in size and number they are under increasing strain.

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Making Cities More Livable by:

• Providing integrated solutions. pursue crosscutting projects to promote urban health, urban mobility, gender equality, and environmental sustainability.

• Supporting funding for cities: explore new and expand existing sources of funding, including through property taxes, utility charges or administrative fees, and predictable intergovernmental transfers.

• Enhancing inclusive and participatory urban planning: support city management in prioritizing investments and developing integrated urban plans based on local demands.

• Increasing climate resilience and disaster management: promote the integration of climate change and disaster risk considerations into urban planning processes.

Strategy 2030: Livable Cities

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Historical Developments and Regional Distribution (Urban Sector)

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Expected Trends and Opportunities (Urban Sector)

Smart Cities

ICT, E-governance, greenfield

development, digital and

municipal finance

Urban Information Systems

Urban land use planning, data

analytics, mobile technology

and earth observation

Urban Mobility

Mass rapid systems,

walkability, air quality control

and climate change mitigation

Cross- Sectoral and Thematic

Collaboration

Social development, informal

settlements, health and housing

Water Supply and Sanitation

Water distribution improvement,

fecal sludge management and solid

waste management

Ecosystem-based adaptation &

Green Technology

Climate change adaptation, disaster

risk management, flood

management, drainage and

bioengineering

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Trends in Water

Water is one of our most precious resources, but it is threatened by growth, misuse, and pollution. In Asia and the Pacific, many countries are in a water crisis and the demand for water is huge and growing.

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Strategy 2030: Key Linkages (Water Sector)

Operational Priorities How water contributes

Addressing remaining poverty and reducing inequalities

Increasing access to water supply and sanitation with a focus on the poor, agriculture, employment

Accelerating progress in gender equality Providing access to water and sanitation; improving security through access to safe sanitation

Tackling climate change, buildingclimate and disaster resilience, and enhancing environmental sustainability

Addressing flood, drought and other water-related disasters

Adopting nature-based solutions, payment for ecosystem services

Increasing focus on water-food-energy security nexus, integrated water resources management and water quality

Making cities more livable Ensuring water security/flood risk management, increased productivity, water supply and sanitation, and water quality

Promoting rural development and food security

Improving watershed management, increasing irrigation efficiency, and agricultural water productivity

Strengthening governance and expanding institutional capacity

Strengthening institutions for improved water resources management and service delivery

Fostering regional cooperation and integration

Increasing water security, strengthening cooperation on watershed management, transboundary water

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Historic Developments and Regional Distribution (Water Sector, $2.78 billion approved investments in 2017)

Notes on the graph: • Amounts are in US$ billion• For PARD, no loan approvals but $2M grant

approved in 2017

2011-2020 Water Sector InvestmentsBy Subsector

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Information technology, cloud computing, and internet of things– Tools: Satellites, Drones, LiDAR, SCADA, mobile phones– Applications: Monitoring, Mapping, Planning, Productivity, Regulation, Decision

Support (Prioritizing, Optimising, recasting)

Processes– Water treatment for supply (desalination); wastewater treatment for water reuse

and energy and nutrient recovery (circular economy)

More efficient water use– new irrigation techniques for more crop per drop and climate change, non-revenue

water reduction, intelligent control, managed groundwater recharge

Working with nature/ecology-based management– coastal defence (mangroves, sediment trapping), flood detention (room for the

river), water storage (upper watershed management and urban/peri urban –sponge cities)

– water quality improvement (helophyte filters), low impact design (LID)/sustainableurban development (SUDS)

Expected Trends and Opportunities (Water Sector)

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Trends in Rural Development and Food Security

ADB's efforts and strategy to achieve food security in the region emphasizes on the integration of agricultural productivity, market connectivity, and resilience against shocks and climate change impacts as the three pillars to achieve sustainable food security.

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Role and MandateAction Areas

Agricultural Value Chains

High-Level Technologies

Climate-Smart Agriculture

Operational Support

Technical Inputs

Knowledge Sharing

and Learning

Partnerships and Cross Synergies

Safe, nutritious,

and affordable access to

food for all

OutcomeOperational Plan 2015-2020Increased productivity and reduced food losses

Improved market connectivity and value chain linkages

Enhanced food safety, quality and nutrition

Enhanced management and climate resilience of natural resources

Strategy 2030: Vision (RDFS)

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Sovereign 543.52 408.96 671.20 1,272.0 836.34 661.70 752.76 1,134.7 1,989.7 3,028.8Non Sovereign - - - 49.10 143.20 534.00 98.00 266.00 180.00 216.40

$544 $409$671

$1,321$980

$1,196

Historic Developments (RDFS, 2009-2017 Investments and 2018 Project Pipeline ($million)*

$851

$1,401

$2,170

$3,245

*Based on project approvals

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Regional Distribution (2017 Investments and 2018 Project Pipeline) ($million)*

CWRD,$274.6 m

EARD, $343.0 m

PARD, $0.8 m

SARD,$376.8 m

SERD,$994.6 m

PSOD, $180.0 m

2017 Agriculture and Natural ResourcesInvestments ($2,170 million)

*Based on project approvals

CWRD,$951.1 m

EARD,$780.0 m

SARD,$933.7 m

SERD,$364.1 m

PSOD,$216.4 m

2018 Agriculture and Natural ResourcesInvestments ($3,245 million)

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2017 Interventions by Subsector (%)

0.07%0.23%1.05%1.15%

2.82%3.85%

5.09%5.45%5.60%

7.16%9.33%

16.33% 41.88%

Rural water policy, institutional and capacity…Rural sanitation

Agriculture drainageAgricultural research and application

FisheryAgricultural policy, institutional and capacity…

ForestryLivestock

Rural flood protectionLand-based natural resources management

Rural solid waste managementRural water supply servicesRural market infrastructure

Agro-industry, marketing and tradeAgricultural production

Water-based natural resources managementIrrigation

Source: DEfR Data, 2009-2017Based on approved loans and grants, no TAs

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Expected Trends and Opportunities (RDFS)

• Improve farm productivity and efficiency—knowledge work and adoption of latest technologies

• Strengthen policy dialogues and partnerships—formulate institutional and policy reforms that incentivize private investments in agriculture

• Strengthen operations in:

▪ Agriculture value chains—build market infrastructure and market connectivity; improve supply chain efficiency

▪ Use of high-level technologies—use of satellite- and drone-assisted applications, ICT for efficient resource management

▪ Climate-smart agriculture—build climate-resilience and promote efficient use of water and energy

• Formulate and implement food safety policies and standards—build quality control laboratories, use ICT in food traceability and tracking

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Trends in Education

Most developing countries in Asia and the Pacific have earned high marks for a dramatic rise in primary education enrollment rates in the last three decades, but daunting challenges remain, threatening economic and social growth.

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Builds 21st century foundational skills

Emergence of early childhood education

Supports the development of

•Technical & job-relevant skills

•Applied research (e.g. process optimization)

Supports the development of

•Higher level skills

•Research & development

•Entrepreneurship, Innovation / incubation

•Entrepreneurship & leadership

Strategy 2030: Education Sector Vision

Basic & Secondary Education

TVET

Tertiary Education

Good jobs, decent income, increased productivity, better competitiveness, and knowledge based economy

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Historic Developments and Regional Distribution (Education Sector)

15%0.1%

36%

0.4%

49%

2012-2014US$ 1.756 billion

3.1% 9.9%0.3%

44.4%

42.2%

2012-2014 US$ 1.756 billion

June 2018

2.2%

21.3%

0.9%

47.6%

28.0%

2015-2017US$ 2.397 billion

9.5%

23.8%

2.5%57.5%

6.8%

2015-2017US$ 2.397 billion

4%

13%

60%

23%

2018 - 2020US$4.60 billion

Lending By Subsector

Lending By Region

11%

22%

30%

29%

8%

2018 - 2020US$4.60 billion

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Expected Trends and Opportunities (Education Sector)Loans and Grants Pipeline, 2018-2020 in US$ million

Pacific

Total Amount: $14.0

TIM - $14.0

MON - $30.0PRC - $168.0

BAN - $1,352.5BHU - $15.0IND - $600.0NEP - $271.9SRI - $520.0

South Asia

Total Amount: $2,759.4

Central West Asia

Total Amount: $573.0East Asia

Total Amount: $198.0

Southeast Asia

Total Amount: $1,045.0

CAM - $170.0INO - $700.0MYA - $100.0

VIE - $75.0

ARM - $40.0KGZ - $30.0

PAK - $475.0TAJ - $28.0

Reflects approval amount and excludes cofinancing. Education Sector Secretariat data as of 25 May 2018.

Pipeline is being firmed up for 2019, 2020 & 2021

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Trends in Health

Health is essential to development, as it improves learning capacity, worker productivity, and income. ADB is supporting better governance and spending, infrastructure development, and regional collaboration to control communicable diseases.

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•Achieve UHC in DMCs by strengthening different health system components

Addressing remaining poverty and reducing inequalities

•Address the unmet health needs of women

• Increase number of health workers

Accelerating progress in gender equality

•Mitigate and adapt health systems to the effects of climate change

•Monitor health impact of climate change

Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability

• Improve quality of urban health systems

•Monitor health effects of livability of cities

Making cities more livable

• Expand health services in rural areas

• Monitor nutritional status

Promoting rural development and food security

•Promote public financial management in the health sector

Strengthening governance and expanding institutional capacity

• Support regional response to communicable disease control

Fostering regional cooperation and integration

Strategy 2030: Key L inkages (Heal th Sector )

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E x p e c t e d Tr e n d s a n d O p p o r t u n i t i e s ( H e a l t h )

Figure 3: Sovereign Commitments by Sector, 2015–2017 and 2019–2030(% of sovereign financing)

2015–2017($913 million, actual)

2019–2021(Projected)

ANR = agriculture and natural resources, EDU = education, ENE = energy, FIN = finance; HLT = health; TRA = transport, WUS = water and otherurban infrastructure and services.Note: Others include information and communication technology, industry and trade, and public sector management.Source: Asian Development Bank estimates.

TRA29%

ENE23%

ANR12%

WUS11%

FIN8%

EDU6%

HLT3%

Others8%

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E x p e c t e d Tr e n d s a n d O p p o r t u n i t i e s ( H e a l t h )

PacificPNG-Health Sector Reform ($345M) Tonga- Digital health project ($7.5M)Vanuatu. Tonga, Samoa, Tuvalu- System strengthening for new vaccines ($25M)

South AsiaIndia- Urban Health ($300M)Bangladesh- Urban Primary Health Care ($50M + $110M)

Bhutan- Health Sector Enhancement ($20M)

Sri Lanka- Health System Enhancement ($50M)

Central West AsiaUzbekistan-Primary

Healthcare ($45M)Armenia- Health Sector

Reform ($30M)Tajikistan- Integrated

Maternal and Child Health ($32M)

Southeast AsiaLao PDR- Health Governance ($30M)Viet Nam- Local Health System ($100M), Medical Universities ($80M)Philippines- Social Protection ($175M)

East AsiaPRC- Elderly Care ($150M)Mongolia- Air Quality Improvement ($10M) Health services for Disadvantaged groups ($130M)

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Questions?• What do you see in your work that we should

know about ?

• What do you want to know about working with ADB?

Dr. Robert Guildrguild@adb.org