Unlocking Development with Digital Public Infrastructure (DPI) in India
Partnering for Inclusive Growth
The Asian Development Bank (ADB) is set to join hands with India in a groundbreaking partnership aimed at promoting Digital Public Infrastructure (DPI) in its projects. This initiative not only seeks to enhance the effectiveness of developmental projects but also addresses the pressing issue of the digital divide that has emerged as a new form of inequality. In an exclusive interaction with Mint, Tomoyuki Kimura, the Director General of Strategy, Policy, and Partnerships at ADB, shared insights into this innovative collaboration. This comes at a pivotal moment as ADB undergoes significant reforms to become the climate bank of the Asia-Pacific region.
Reforming Multilateral Development Banks
Multilateral development banks (MDBs) face immense challenges in an era marked by climate change, pandemics, and natural disasters. The need for bold actions to address these challenges is evident. ADB, in line with expert panel recommendations, is evolving its business model, extending beyond financing to redefine its mandate and operational mechanisms. This includes innovative financial restructuring to boost lending capacity, a long-term corporate strategy emphasizing global public goods, and a focus on financing national innovation.
Commitment to Climate Finance
ADB has set ambitious targets for climate finance, with an initial goal of $80 billion in cumulative funding until 2030, increasing to $100 billion in 2021. A significant portion of this funding is allocated to support climate adaptation. Importantly, ADB aims to leverage private capital, seeking to mobilize up to $30 billion in addition to the $100 billion of financing. Private sector engagement is pivotal, and ADB is taking steps to co-invest, co-finance, and de-risk projects to attract private investments. Blended financing is a key strategy in this endeavour.
The Role of Digital Public Infrastructure (DPI)
The digital divide is now a prominent face of inequality, both regionally and globally. Digital connectivity serves as an enabler for remote learning, teleconsultation, e-commerce, and more. However, limited access to affordable and high-quality digital connectivity hampers these opportunities. ADB recognizes the potential of DPI in addressing this divide and promoting inclusivity. By embedding digital components in projects, ADB aims to leverage digital technology for enhanced development impact.
India’s Model for DPI Adoption
India’s success in harnessing digital technology for economic growth has caught the attention of ADB. The country’s DPI initiatives have the potential to serve as a valuable blueprint for ADB’s efforts. Collaboration between ADB and India in this domain appears promising, with discussions already underway.
A Global Perspective
The inclusion of the African Union in the G20 marks a significant shift in the dynamics of global development discourse. It offers a platform for the developing world to voice its aspirations and needs. For MDBs like ADB, this broader representation at the G20 level presents opportunities for knowledge sharing and synergy among regional development banks.
Modernizing MDBs for Contemporary Challenges
Amid discussions of reform and modernization, two key aspects emerge. Firstly, there is debate over whether the existing multilateral system is functioning effectively or if the need for a new system exists. ADB advocates strengthening the current MDB system through financial support and reforms to make it more suitable for today’s global context.
Secondly, shareholding and governance are topics of discussion, with emerging major economies from the global south seeking greater representation. Balancing these interests remains a complex challenge, but it underscores the importance of ensuring a more inclusive and equitable global development landscape.
ADB’s commitment to partnering with India on DPI projects represents a significant step towards addressing the digital divide and fostering inclusive growth. The ongoing reforms within ADB, coupled with its dedication to climate finance and sustainable development, underscore its role as a catalyst for positive change in the Asia-Pacific region. As ADB and India collaborate to harness the potential of digital public infrastructure, they pave the way for a more inclusive and digitally empowered future. This partnership showcases the importance of innovative solutions and international cooperation in overcoming the complex challenges facing our world today.
