Nusa Dua, Indonesia: Some Asian governments are already looking for support from the Asian Development Bank’s new $3 billion facility to counter the effects of the global economic downturn, the head of the bank said on Tuesday.
ADB President Haruhiko Kuroda told reporters at the end of the bank’s annual meeting that the counter-cyclical fund was likely to be approved by the board within weeks.
“There are already quite a few governments indicating their intention to borrow from the new facility,” he said, although he gave no details.
“The fund will provide fast disbursing support... to swiftly provide targeted support for the poor.”
The new fund is part of an extra $10 billion that the ADB plans to lend to developing nations in Asia over the next two years, taking its total loans in the period to about $33 billion. Another initiative is to provide around $1 billion in trade finance.
Earlier on Tuesday, Philippine Finance Secretary Margarito Teves told Reuters that Manila was working on quickly getting a $500 million loan from the ADB and other multilateral agencies to cover the increase in its budget deficit, which has soared because of the need to shield the economy from the downturn.
On the sidelines of the meeting, Japan, China, South Korea and the 10-member Association of South East Asian Nations agreed on Sunday on a $120 billion fund to guard against the kind of capital flight seen during the 1997-98 financial crisis.
Kuroda said Asia was currently facing its most difficult economic period since that time, with the economic crisis and climate change posing threats to long-term growth and to the poor.
Although the influenza epidemic sweeping Mexico and parts of the United States has not been much felt in Asia, it was necessary to take precautionary measures in the region, he said.
“Asian countries are very much aware of the risk involved in communicable disease,” he said. “We have to be alert, we have to be prudent, in preparing for the spread of this new influenza and at this moment countries in the region are taking appropriate measures.”
The ADB’s annual meeting was held on the Indonesian island of Bali and was attended by finance ministers and central bank governors from most of its 67 member-nations. Kuroda said the meeting, which also endorsed the tripling of the bank’s capital base to $165 billion to enable it to raise more funds, was a great success.
However, the United States, which along with Japan is the ADB’s biggest donor, sent only a relatively junior official as its head of delegation.
India, the biggest ADB borrower in 2008, also did not send a government minister and was represented by a bureaucrat.
“I am very much pleased by the outcome of the meeting,” Kuroda said. “Some countries may be in election so politicians may not be available to come,” he added, referring to India’s month-long polls that are underway.