Written by: Miguel Biacora
In partnership with Talakayang Alay sa Bayan (TALAB), an annual event hosted by Ateneo aiming to incite a sense of national Identity to its students beyond the confines of the university’s natural academic setting, this year the Ateneo Economics Association (AEA) hosted EconTours, an economic tour of the Asian Development Bank (ADB) headquarters in Ortigas Center last October 4, 2019.
ADB is known as an institution that advocates economic sustainability and inclusivity to Asia and the Pacific. Using equity investments and loans, ADB strives to assist developing countries to greater prosperity. In a four-hour span, 33 students from the Ateneo were given a glimpse of the inner workings of one of Asia’s most renowned financial institutions. First, the students were immersed in talks by the director of ADB’s macroeconomic research department. They were given an exclusive on the bank’s research department and Asia’s current macroeconomic outlook. Afterwards, participants were given an extensive tour of ADB’s facilities. This gave the participants a well-rounded perspective of what ADB does, how it operates and the environment that cultivates their expertise.
The Research Department
Abdul Abiad, the director of ADB’s Macroeconomic Research Division, broke down the following: the identity of the research department, their role in the institution, and their goals as a department. He mentioned that the macroeconomic research division (ERMR) deals with macroeconomic surveillance, forecasting, policy/scenario analysis, and research. Providing a framework centered on the capacity building sector is their niche in ADB’s community. They conceptualize macroeconomic forecasts, financial programs, policies, and bond market monitoring. Essentially, the research department serves as the backbone of the bank. Their primary focus is hinged on helping the institution create the most optimal macroeconomic decisions for maximum economic development.
Asia’s macroeconomic outlook
Abdul then gave his take on Asia’s current macroeconomic outlook using data from multiple economic reports. He stated that Asia is currently at the forefront of a rapid urbanization, saying that countries such as India, Indonesia and the Philippines have been experiencing substantial upticks in their urban wage premium percentage. Philippines observed a 10.6% increase from 2015, while Indonesia increased by 13.7% from 2015, and India saw an 18% increase from 2012. Moreover, 28 city clusters in developing countries in Asia were reported to have a population of 10 million and above. The relative congestion index of capital cities in multiple countries are well above the standard value of 1.0. Metro Manila currently sits at the top of the index with a value, hovering around 1.5. This means that Metro Manila is exposed to greater economic risks and hindrances despite its rapid urbanization. From this, the issue that developing countries evidently encounters in the face of urbanization is its productivity given the increasing rate of congestion.
Abdul’s sentiments on the matter showed promise because urbanization leads to affordable housing, increased firm innovation, and efficient transport systems. The bane, however, lies in the sustainability issues and city-wide congestion that result to this rapid urbanization. The mitigation of these issues are largely dependent on the fiscal and monetary policies imposed by the country. This, in turn, provides a safety net that promotes consistent economic growth despite a weakening global economy. Abdul supported his stance in saying that these policies will drive a rebound in investment; fiscal policies that promote higher public expenditure and monetary policies that ease inflation pressures give developing countries the opportunity to grow on a consistent basis.
In terms of the Philippines’ developing economy, the factors supporting growth, as presented by Abdul, are the rising public investment, positive business-consumer sentiment, growth in formal sector wage employment, macroeconomic policy, and economic reform programs. The downsides, however, are the slower-than-expected pace that the economy is taking to match public spending and the deteriorating global environment. Although the positive side of our economic growth outweighs the negative, there is still room for improvement. Our export goods, particularly in electrical machinery and semiconductors, are quintessential factors in the nation’s future economic growth. In this age of technological advancement, specializing in electronic manufacturing is a way of furthering the Philippines’ current economic standing.
The tour of ADB’s headquarters consisted of the following: The sports complex, roof deck, medical center, office space, and museum. ADB’s sports complex featured a state-of-the-art, multi-purpose court, which is used for basketball, badminton, Zumba, Aerobics, and other physical activities.
This was followed by a tour to the institutes’ roof deck, where multiple solar panels which account for three percent of ADB’s total electrical consumption covered the roof. Following this was the tour to their medical center. Then, the students were toured in ADB’s office spaces which presented a very eccentric, yet productive type of working environment. The end-point of the tour was held in their museum in which ADB’s history is displayed which dates all the way back to the 1960’s, where ADB’s first president, Takeshi Watenabe, and thirty other members banded together to serve a region primarily dominated by agriculture. The facility contained various artifacts and trinkets, which signified pivotal points in their history.
Overall, Asian Development Bank’s facilities holds true to their advocacy of sustainability and development. The value that they put into the curation of cultural development speaks wonders of what they aim to preserve and what they hope to achieve.