ADB meets to re-examine its role as Asia grows

Kyoto (Japan), May 4: The Asian Development Bank began discussing ways to tackle the challenges facing the region's rapidly growing economies on Friday, with the Manila-based agency seeking a new role for itself to keep pace.

The ADB is under pressure to prioritise its work to better serve its 67 member countries, ranging from struggling Bangladesh and Pakistan to booming China and India, as well as its largest donors Japan and the United States.

Worsening environmental and energy problems are key topics at the May 4-7 meeting in the western Japan city of Kyoto, where an international protocol on reducing greenhouse gas emissions was adopted a decade ago.

Delegates at the ADB's 40th annual meeting will also discuss a report by an independent panel of experts that has proposed a vision for Asia's future and strategic priorities for the ADB, which was founded in 1966.

''The region has achieved impressive rates of growth and made substantial headway in reducing poverty,'' ADB President Haruhiko Kuroda told a news conference on Friday.

''However, Asia still remains home to two-thirds of the world's poor and this is something we must not lose sight of.'' Kuroda said rising inequality, increased pressure on the environment and a widening gap between rich and poor are among challenges that face the region.

The ADB said on Friday it would spend at least $1 billion on clean energy projects in 2008, as it seeks to strengthen its role in balancing economic development and environmental concerns in the region.

That would mark a rise of 10 percent or more from this year, when it is expected to invest $900 million in such projects.

A decade after a financial crisis rocked the region, Asian finance ministers continue to take steps to strengthen their existing currency mechanism to avert a repeat of the turmoil.

CURRENCY AGREEMENTS

On the sidelines of the ADB meeting, finance ministers from China, Japan and South Korea agreed to develop region-wide bilateral currency agreements into more powerful multilateral deals.

Kuroda told Reuters in an interview on Thursday that he saw little risk of another Asian crisis as many economies in the region enjoy solid economic growth, current account surpluses and improved conditions in their financial sectors.

But he said it was important for policy-makers to be always preared for the worst.

The report by the panel of experts said Asia has been transformed into a region that has largely conquered extreme poverty.

The panel said the ''New ADB'' now needs to focus more on supporting higher and more inclusive growth, environmentally sustainable growth and regional integration.

Kuroda said input from the report would be reflected in the ADB's review of its long-term strategic framework and the review would be completed in time for its next annual meeting in Spain.

''It is true that the number of people living on less than a dollar a day is falling drastically,'' he said in the interview.

''But there are still 1.9 billion people living on less than two dollars a day and it is very difficult to substantially reduce that number.'' Kuroda said he hoped member countries would provide more funds than previously to the ADB's concessional lending window, the Asian Development Fund (ADF), when they negotiate for the 10th ADF covering years 2009 to 2012.

The meeting is expected to attract some 3,000 participants.

REUTERS