ADB’s Work in Regional Cooperation and Integration

History of Cooperation

Stimulating economic growth in Asia and the Pacific through regional cooperation and integration (RCI) has been central to ADB’s work since its founding in 1966. When representatives of 31 governments signed the ADB foundation documents, Article 2 of its Charter directed the new organization to promote intraregional trade and assist members in coordinating their development policies.

ADB has advanced regionalism over the past three decades using a bottom-up approach, building on subregional cooperation efforts. Assisting its DMCs to reap the benefits of globalization and lower costs provided the rationale for promoting RCI in subregions.

The Noi Bai-Lao Cai Highway is an integral section of the eastern link of the Greater Mekong Subregion (GMS) Northern Economic Corridor. Photo: Ariel Javellana/ADB

ADB launched the Greater Mekong Subregion (GMS) Program, the Central Asia Regional Economic Cooperation (CAREC) Program, and the South Asia Subregional Economic Cooperation (SASEC) Program. ADB is also a development/knowledge partner with several other regional groupings, including ASEAN and BIMSTEC.

ADB established the RCI Fund in 2007 to facilitate the pooling and provision of additional financial and knowledge resources. By 2019, the fund had helped to invest $73.5 million in 96 technical assistance projects. The fund produced some high-impact knowledge products, including regional strategies and master plans.

ADB’s Strategy 2020 aimed to increase RCI in all operational areas and increase assistance for RCI to at least 30% of total activities by 2020. By March 2012, ADB, its DMCs, and development partners had jointly mobilized more than $35 billion for RCI investment and technical assistance. The United Nations has recognized partnerships and cooperation as essential tools to support national efforts in implementing the 2030 Agenda for Sustainable Development.

ADB’s commitment is evident not only in the roads, power transmission lines, bridges, ports and border crossings linking member countries, but also in the trade agreements, treaties and regional institutions that facilitate working together. ADB’s Strategy 2030 identifies RCI as one of the institution’s seven operational priorities. ADB’s RCI Operational Plan (2019-2024) aligns the institution’s RCI support with Strategy 2030 priorities.

ADB is also committed to helping the region collectively address transnational challenges such as pollution, climate change, pandemics like COVID-19, and financial shocks.

Working Together

ADB and its partners have long recognised that when national economies become more connected regionally, the results are closer trade integration, more efficient intraregional supply chains, and stronger financial links. These clear economic benefits are multiplied when combined with the reduction or elimination of tariff and non-tariff trade barriers between countries.

Trade in goods and services, cross-border investment, labour mobility, and technology transfers all support the creation of a much larger, regionally integrated market.

ADB is helping Uzbekistan improve a key highway linking the country to its neighbors in Central Asia. Photo: Relisa Granovskaya/ADB

ADB’s commitment to RCI has been a significant part of Asia’s rise as a manufacturing giant over the past forty years, made possible by sophisticated supply chain and production networks. This growth has created millions of jobs and brought development and increased prosperity to many countries in the region.

As poorer countries become more integrated with those of their richer neighbors, they have the opportunity to move up the value chain and promote inclusive growth. In 2008, the Lao People’s Democratic Republic (Lao PDR) finished its Route 3 Highway, which stretches from the country’s northern border with the People’s Republic of China (the PRC) to its southern border near Thailand. The road has boosted trade between Thailand and Lao PDR by around 70%. The project is one of dozens across Southeast Asia, Central Asia, South Asia, and the Pacific that promotes growth through countries working together and trading more easily

Cooperation on Regional Challenges

Working together helps the region collectively address transnational challenges such as climate change, pandemics like COVID-19, and financial shocks. Addressing these common challenges requires the delivery of regional public goods that benefit all of the countries involved, but which cannot be produced by countries acting alone. An example is a project to promote clean energy development in Central Asia.

RCI can be instrumental in helping countries exert more influence in regional and global policy discussions in which they have a vital stake. Countries reaching agreement on common challenges also means the countries of Asia and the Pacific can speak with a unified voice, making a greater global impact, commensurate with the region’s growing economic might.

Staff at the Wagah Cargo Inspection Terminal checks a Pakistani truck arriving from India. Photo:Madiha Aijaz/ADB

The Asian financial crisis of 1997–1998 highlighted the need to enhance regional financial cooperation and integration. After the economic devastation brought about by the crisis, many countries in Asia and the Pacific deepened their resolve to pursue RCI and cemented their commitment to a shared vision of an integrated, prosperous, and harmonious region.