Tokyo: After four decades of fighting poverty, Asian Development Bank (ADB) is considering an ambitious overhaul to safeguard its relevance in a rapidly shifting economic landscape.
With extreme poverty expected to have been largely overcome in Asia by the end of the next decade, a key issue for ADB at its annual meeting this weekend in Kyoto will be how to sharpen its focus to keep up with the times.
“Asian economies are growing quite fast which means that absolute poverty will be substantially reduced by 2020, though many people will still be struggling to get by on just $2-3 a day, even if their incomes have risen above the dollar-a-day line,” ADB president Haruhiko Kuroda told AFP in a recent interview.
“Though income poverty is substantially reduced, child mortality rates, HIV/AIDS, clean water, sanitation and non-income related Millennium Development Goals will still not be achieved even by 2015 or 2020,” Kuroda said.
The consensus was that ADB should increase its focus on supporting more equitable and environmentally sustainable growth, and take a more regional or global approach instead of concentrating on individual countries.
ADB’s primary role when it was established in 1966 was to borrow money from capital markets to lend to developing Asian economies that might struggle to raise affordable funds on their own. But many Asian nations can now easily tap capital markets themselves. Singapore and South Korea have turned into donor countries to ADB, whose biggest shareholders are US and Japan, followed by China and India.
Asian nations have accumulated vast foreign currency reserves that they are now considering putting to better use to aid their development.“Over the next decade many countries could become donor countries but countries like India, Pakistan and Bangladesh will continue to borrow,” said Kuroda.
“Our assistance could be scaled up rather than scaled down.” ADB’s lending of $6.82 bn (Rs28,644crore) in 2006 was dwarfed by Asia’s infrastructure investment needs of some $300bn.The four-day ADB meeting, which gets underway on 4May, will also assess the health of the Asian economies a decade after the regional financial crisis, as well as prospects for further financial integration.
Last year the 10-member Association of Southeast Asian Nations along with China, Japan and South Korea agreed to study the creation of a single Asian currency akin to the euro, although little progress is expected any time soon.
Asean ministers will meet on 5May on the sidelines of the ADB meeting to discuss how to bolster the system of bilateral currency swaps that was introduced in 2000 in a bid to prevent another regional financial crisis.