Adb Prepares For The Next Century

The Asian Development Bank (ADB) opened its 30th annual meeting yesterday with a call from its president to boost its impact, but a warning from the biggest donor Japan that cuts in aid were likely.

ADB president Mitsuo Sato called the bank a family doctor which saw Asian nations through their early, rapid development.

But as the 21st Century approached, the ADB needed to prove it had more than just old remedies, he said.

We must demonstrate that our assistance really generates maximum impact on the ground, Sato said.

The region's and the bank's progress over the last 30 years is highly encouraging. But formidable challenges remain. About 3,000 finance ministers, central bank governors, businessmen and other economic officials are attending the meeting of an organisation founded 30 years ago when Asia was a different and poorer place.

 

Sato's appeal was preceded by a stern warning from Japanese finance minister Hiroshi Mitsuzuka, host to the meeting in the southern Japanese city of Fukuoka until Tuesday, that development aid to poor nations might have to take a backseat because of budgetary constraints at home.

Mitsuzuka said Japan in recent years had a proud record of giving the most development aid of any industrialised nation despite enormous fiscal pressures at home.

But, he said: Since our fiscal situation is the worst among industrial countries, fiscal reform is among our top policy priorities.

When implementing fiscal structural reforms, however, the official development aid cannot be exempted from our effort to cut down on expenditure.

The Japanese finance minister also pointed the finger at the ADB itself, saying the bank needed to carry out its objective of helping poor nations in a more effective and efficient manner, and in greater coordination with the private sector.

The annual gathering, at a sprawling complex which includes an indoor baseball stadium, comes at a time when the quasi-governmental bank is groping for a new role in a region where private capital now rules.

We have been striving to adapt to the changing needs and emerging challenges of the region, and to the changing ideas as development thinking progresses, Sato said. We see the rising tide of private capital flows across borders, far surpassing official development assistance in the developing world. Sato, a Japanese national, added that harnessing private capital for productive investment was one of the greatest challenges to the developing world. But he said the bank must not lose sight of the fact that its first and foremost task was to reduce poverty.

We also realise that we must adopt a direct approach to poverty reduction to bring the poor into the broad process of growth, he said.