ADB proposes an additional $10 billion of assistance in 2009-2010 to help Asian countries out of the current financial crisis even as the bank expects the Asia Pacific region to regain growth momentum in the later part of 2010.
The crisis assistance will include a new $3-billion countercyclical support facility to disburse funds quickly and efficiently for urgent needs, and a front-loading of Asian Development Fund resources to provide $3.4 billion to ADF recipient countries this year. It also includes up to $1 billion to support trade financing, which is expected to generate up to $15 billion in trade support, the bank said in release.
"With strong national and regional efforts, and a mild recovery expected in the global economy next year, developing Asia should bounce back to 6 per cent growth in 2010," Asian Development Bank president Haruhiko Kuroda told the opening session of the 42nd annual meeting in Bali, Indonesia.
In a speech focusing on the global crisis, economic rebalancing and environmental sustainability, Kuroda stressed the importance of continuing to support the region's growth and poverty reduction efforts. The region's aggregate growth is expected to fall to 3.4 per cent this year from record growth of 9.5 per cent in 2007, he said.
"Therefore, this should not be a time of despair. Our region continues to grow and will remain a touchstone of dynamism and hope, contributing substantially to global growth and poverty reduction," he added.
"Under our current projections, 60 million more people will remain trapped in poverty this year and yet another 100 million next year – an alarming setback to our vision of an Asia and Pacific free of poverty," Kuroda said, noting that the crisis and climate change are the two major threats to poverty reduction in the region.
The annual meeting follows a vote by its board of governors to triple ADB's capital base from $55 billion to $165 billion. The 200 per cent increase will allow ADB to respond quickly and proactively to the immediate needs of its developing member countries while maintaining a focus on long-term development objectives, the release said.
He said, in order to rebalance and sustain growth, Asia should place more emphasis on domestic demand and consumption. By doing so, "Asia can lead the way in charting a new, globally beneficial development course," he said.
''While the challenges are huge, I believe the crisis is also an opportunity. An opportunity for our region – and the world – to fundamentally restructure our approach to development and bring about a more sustainable global balance,'' he said. ''An opportunity for Asia to become not only a major source of goods and services, but also a major destination,'' he added.
Asian countries, he said, also need to work together to strengthen the investment climate, build a "seamless infrastructure" across the region, and promote regional trade. While warning strongly against protectionism, Kuroda said, "a stronger and more resilient regional economy, with multiple sources of growth, will also contribute to a stronger, more vibrant, and more resilient global economy."
Kuroda said the new development paradigm must also include a sharp focus on combating climate change - the region's share of global carbon emissions could reach 40 per cent by the year 2030. ''We need to target those investments to green development, including clean energy, to mitigate climate change," he said.
Last year, ADB provided nearly $1.7 billion for projects with clean energy components, and is financing a range of projects across the region. The bank is adding a new $40 million disaster response fund.
ADB, meanwhile, is pursuing ways to facilitate rapid diffusion of new, low carbon technologies across the region, and has established an advisory panel of acclaimed climate change experts to guide the bank's efforts in the coming years.
Mr. Kuroda noted that ADB continues to improve its development effectiveness through better human resource management, knowledge sharing and management, more effective evaluation of projects, upgraded risk management capacity, alignment of its public and private sector operations, and updating of its social and environmental safeguard policies.