The case for an Indo-Pacific Economic Resilience Bank

In response to a global landscape increasingly shaped by economic insecurity, climate change, and stalling development, a new Lowy Institute Analysis proposes the creation of an Indo-Pacific Economic Resilience Bank (IERB).

The Analysis, entitled The case for an Indo-Pacific Economic Resilience Bank, by Michelle Lyons, Roland Rajah, and Grace Stanhope outlines how the IERB could bridge critical gaps in the international financial architecture.

The authors argue the IERB’s unique investment focus on economic security, climate, and development would mobilise new public and private capital, particularly in developing Indo-Pacific economies. The bank would help scale clean energy investments and diversify green supply chains — reducing overdependence on China in critical sectors, such as clean energy manufacturing.

The creation of the IERB would signal a significant policy shift, offering a multilateral alternative to fragmented national initiatives.

“This new institution could be a game-changer,” said Michelle Lyons. “By multilateralising economic security, the IERB could unlock fresh capital to foster the regional cooperation needed to navigate today’s most pressing global challenges.”

“With the world facing a multi-trillion-dollar financing gulf for climate and development goals, the IERB would combine public and private investments to begin filling this gap — accelerating the global clean energy transition.”

“By expanding clean energy markets and diversifying supply chains, the IERB will provide economic security and sustainable development, particularly for Indo-Pacific nations, home to more than 2.5 billion people.”

The Lowy Institute’s Research Director, Hervé Lemahieu, said: “In proposing an economic resilience bank for the region, my colleagues have come up with a very compelling policy idea and a good way to get policymakers thinking about the inherent tensions between the development, economic security, and climate policy spaces. The paper is especially pertinent to Australia given our region and the need to bridge the agendas of the industrialised West and Global South.”

KEY FINDINGS

• The world faces a triple crisis of economic insecurity, climate change, and stalled development, but there are deep tensions between the policy agendas being deployed to address them. We propose a new Indo-Pacific multilateral bank that can turn these tensions into complementarities.
   
• The bank can accelerate clean energy funding by mobilising new public and private capital investments, primarily for projects in the Indo-Pacific’s developing economies. And it can create multilateral economic security by diversifying green supply chains to dilute the current excessive dependence on China.
   
• The bank would create benefits for both developing and advanced economies, fostering new industries and diversified, resilient markets while helping build the multilateral cooperation and capabilities needed to construct a more secure and sustainable world.

The full Lowy Institute Analysis, The case for an Indo-Pacific Economic Resilience Bank, is available to read and download at the Lowy Institute website.

MEDIA CONTACT
Andrew Griffits
Head of Media and Communications
media@lowyinstitute.org