Surviving the Global Crisis: ADB Annual Meeting Emphasizes Challenges to Growth and Poverty Reduction

By Sandra Lodoen
External Relations Specialist

If one thread was woven through the numerous events surrounding the Asian Development Bank (ADB) 42nd Annual Meeting, it was the global economic crisis. From the governors' statements at the formal business sessions to the civil society discussion panels to the President's closing press conference, the focus was keenly on how the Asia and Pacific region will manage the crisis impacts and reemerge onto its path of stronger growth and poverty reduction.

Expectations for ADB to help in this process are high. Just days before the meeting began, ADB governors agreed to a tripling of ADB's ordinary capital resource base from $55 billion to $165 billion—a sizable injection that will support a substantial response to the crisis, as well as the achievement of ADB's long-term strategic agenda.

"This is truly a historic moment," President Kuroda told journalists at a media briefing in which he released a report outlining ADB's response to the global crisis. As part of this response, Mr. Kuroda announced ADB’s plan to establish a $3 billion Countercyclical Support Facility to provide fast-disbursing loans to member countries needing immediate assistance. "I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impacts of the crisis," he said.

Despite the current global crisis, delegates were urged to keep in mind the region's long-term development goals. At the opening session, Dr. Sri Mulyani Indrawati, Annual Meeting Chair of the Board of Governors and Governor for Indonesia, commended ADB for its leadership role in addressing climate change. "Given our region’s size, diversity, and growth potential, along with the tremendous needs for energy, environmentally sustainable development in Asia and the Pacific is essential not only for the region but for the world," she said.

President Kuroda also spoke of the region's long-term challenges, including the need for Asia to rebalance growth. He said that "by rebalancing export-driven growth with a greater reliance on domestic demand and consumption, Asia can lead the way in charting a new, globally beneficial development course."

Indonesian President His Excellency Dr. Susilo Bambang Yudhoyono noted that "the economy of the future will be unlike the economy that is failing us. The economy of the future will be full of new challenges. We will need to adapt. We will need to innovate. We will need to be enterprising and to be bold. And I have every confidence that, if we work together, we WILL succeed."

The 4-day meeting, set in the richly cultural and serene environs of Bali at the Bali International Conference Center, drew over 3,000 participants including ADB Governors, delegates from member countries, and representatives of the private sector, civil society, academe, and the media. The opening ceremonies included a striking performance of Balinese dance and the presentation of a song specially written for ADB called From Asia to the World (link to song).

In addition to the official business sessions, the 4-day event offered an array of seminars on topics ranging from inclusive growth to environmental sustainability to institutional development. At a seminar on the importance of regional infrastructure, the President unveiled a new flagship ADB-ADBI study entitled Infrastructure for a Seamless Asia. Infrastructure remains a huge challenge for the region, with investment needs of some $750 billion a year. The study should serve as a practical guide for regional infrastructure development to increase the region’s competitiveness, promote poverty reduction through better access to services and opportunities, and help in recovery from the global economic crisis.

A major highlight was the Governors' Seminar on "The Global Financial Turmoil and Implications for Asia," focusing on the impact of the crisis on developing Asia's economies and their contributions to global recovery. In introducing the seminar, Mr. Kuroda stated that "there are signs that domestic consumption is remaining strong and Asia may well lead the way out of this downturn," while Sri Mulyani Indrawati warned that a continued reversal in capital inflows could exert significant macroeconomic pressure on the region. The seminar was moderated by BBC journalist Nik Gowing and also featured presentations by Kaoru Yosano, Minister of Finance and ADB Governor for Japan; Li Yong, Vice Minister of Finance and ADB Alternate Governor for the People's Republic of China; Nick Sherry, Minister for Superannuation and Corporate Law and Temporary ADB Alternate Governor for Australia; Abul Maal Muhith, Minister of Finance and ADB Governor for Bangladesh; and Ashok Chawla, Secretary, Department of Economic Affairs, Ministry of Finance and ADB Alternate Governor for India.

Delegates from civil society and nongovernment organizations (NGOs) took part in an open forum in which they had an opportunity to exchange views with President Kuroda. The civil society/NGO program also included discussions on environmental management as a key factor for sustainable development; the food, economic, and climate crises; ADB’s draft energy policy, energy efficiency initiative, public communications policy, and safeguard policy update; and a forum on the impacts on workers of the global financial and economic crises. Participants highlighted the need to address the fallout of the economic crisis in terms of job losses, increasing poverty, and exacerbation of inequality and gender considerations in ADB operations and policies. They also urged ADB to uphold strong safeguard standards, ensure provision of information to persons residing in areas affected by ADB-financed projects and proper compensation for those resettled by ADB-financed projects, support a strong public sector, and uphold core labor standards.

The Annual Meeting drew more than 300 journalists, and brought wide attention to the region’s challenges. Over 900 articles in international and national media and over 4,500 in Indonesian Bahasa highlighted how the global economic crisis is affecting Asia and the Pacific, the need to deepen regional cooperation and to rebalance growth in the region, and ADB’s role in responding to the crisis and supporting economic growth and poverty reduction in its developing member countries.

“It is clear that developing Asia and the Pacific is facing its most difficult economic and development challenges since the Asian financial crisis of the late 1990s,” Mr. Kuroda said in his closing remarks. However, he noted that “ADB is in a strong financial position to assist the region” following last year’s Asian Development Fund replenishment (ADF X) and the more recent tripling of ADB’s ordinary capital resources. Reiterating his appreciation for the general capital increase, he assured Governors that ADB could now “respond aggressively to the crisis, while sustaining momentum on long-term development and poverty reduction across the region.”