ADB told to keep cutting poverty as it eyes future
06 May 2007 11:14:04 GMT Source: Reuters
By Yoko Nishikawa KYOTO, Japan, May 6 (Reuters) - The governors of the Asian Development Bank challenged the agency on Sunday to keep its focus on reducing still pervasive poverty even while praising efforts to make strong regional growth more environmentally friendly. Member countries also voiced worries that growth was causing widening disparities between the rich and poor across Asia, a concern ADB President Haruhiko Kuroda addressed by saying the region's prosperity should be shared by both rich and poor. "Despite impressive progress, we cannot be complacement," Kuroda told the opening session of the ADB board of governors at its annual meeting in Kyoto, western Japan. He described Asia as having two faces -- the shining Asia of vitality and wealth, and the shadows where desperate poverty persists. "Increased inequality across the region, and within individual countries, threatens social cohesion and puts at risk the process of growth itself," Kuroda said. The ADB is reexaming itself to keep pace with rapidly expanding economies in the region, notably China and India. But delegates, from both industrialised and developing countries, said the ADB should stay true to its original goal of reducing the number of poor. Kenneth Peel, delegation head for the United States, the ADB's largest shareholder along with Japan, said the region is still home to about half the world's most extreme poor, despite strong growth in many economies. "These two parallel realities form the challenge we face in charting a strategic direction for ADB in the years ahead," he said. A panel of experts has called on the ADB to consider setting up a regional facility to manage part of Asia's massive foreign reserves, but Peel said the ADB should not stray from its mission and become a miniature version of the International Monetary Fund. Britain's representative, Charlotte Seymour-Smith, said she welcomed the ADB's new initiatives on energy efficiency but that "poverty elmination must be the heart of our work". At the weekend gathering, the ADB announced plans to spend at least $1 billion on clean energy projects in 2008. LOOKING AHEAD Citing proposals to reform the ADB in a report by an independent panel of experts, Kuroda said Asia has new challenges arising from economic success, such as prosperity with inclusiveness and growth with sustainability. "The vision of Asia as articulated in the report is one I share -- the vision of an Asia and the Pacific fundamentally transformed," Kuroda said. "An Asia and the Pacific with new challenges to tackle -- no longer arising from pervasive poverty, but instead from economic success." Per capita income in developing Asia, in real terms, grew from less than $170 in 1967 to over $1,000 in 2005. But booming economies mean more demand for energy. Over the last three decades, Asia's energy consumption has grown by 230 percent and is expected to double again by 2030, Kuroda said, calling on the ADB's 67 member countries to use natural resources more wisely so that poor nations will not have to bear the brunt of the environmental impacts of growth. China's finance minister, Jin Renqing, said his country's economic growth faced serious challenges due to resource and environmental factors. "China is still in a transitional period and faces formidable challenges, such as resource constraints, environmental pollution and regional imbalances," he told the meeting. Japanese Finance Minister Koji Omi, chairman of the meeting, called for an overhaul of the 1997 Kyoto Protocol on reducing CO2 emissions to deal with the environmental impact of Asia's rapid economic development. "It is important to go beyond the Kyoto Protocol to create a new, practical and effective framework in which all countries, including the United States, China and India will participate," Omi said. He called on the ADB to use its knowledge to support developing countries to set up regulatory frameworks for energy efficiency. More governors of the ADB, mostly finance ministers from member countries, will address the board meeting on Monday, when the four-day gathering ends. (Additional reporting by Yuzo Saeki, Eric Burroughs, Leika Kihara, Hideyuki Sano and Eadie Chen)
