Challenges ahead as ADB seeks to redefine itself

With 1.9 billion people in Asia living on $2 a day, the Asian Development Bank faces tough challenges to balance its mission to help the poor and the need to better serve a growing number of middle-income countries.

Winding up its 40th annual meeting on Monday, the Manila-based agency will hear more from its governors on what its new role should be in a region which experts say will account for 45 percent of global growth by 2020.

Some of the ADB's bigger shareholders said on Sunday that reducing poverty should remain its main focus, while more efficient use of energy was needed as environmental degradation spread across the region and the world.

One focus of the meeting in Kyoto, western Japan, has been a report by a panel of experts on the future of the ADB. The report will be the basis for debate on the agency's future role, priorities and strategies to keep pace with a changing economic environment in the region.

The development body has 67 members, ranging from struggling Bangladesh and Afghanistan to booming China and India, and powerful donors such as Japan and the United States.

The panel of experts, envisaging a dramatically transformed Asia by 2020, said the "New ADB" will need to focus more on inclusive and more environmentally sustainable growth, regional integration, and technology and knowledge management.

REDUCING POVERTY

"It is abundantly clear that the nature of investment demand is changing rapidly, which is an indication of the inherent strength and resilience of Asian economies," Subba Rao, head of India's delegation, told the meeting on Monday.

Though the report stresses the need to care for the region's poor, delegates from some developing countries expressed concerns that the poor could be left behind.

The United States, the largest shareholder along with Japan, and some industrialised nations said the ADB should not lose sight of its goal of reducing poverty.

"We are concerned that a 'two-bank model' is emerging in some thinking," Christopher Pearce, head of Australia's delegation, told the meeting on Sunday.

"This could see Asian Development Fund countries relegated to lesser importance than their more prosperous neighbours," he said.

The ADB aims to complete a review on how to set the course for strengthening Asian economies and itself by the next annual meeting in Madrid, Spain.

A decade after financial turmoil engulfed the region, Asian economies have recovered sharply, boosting trade with rest of the world and accumulating massive foreign exchange reserves.

Per capita income in developing Asia, in real terms, grew from less than $170 in 1967 to over $1,000 in 2005.
Source : http://www.alertnet.org