Catalog

President Meets The Press

President Chino: Good afternoon, ladies and gentlemen. Thank you very much for coming to this press conference. I trust you all have copies of my closing remarks of the Board of Governors’ meeting. I’m very happy to report that our Annual Meeting was a great success. Governors fully endorsed the way we are implementing our Poverty Reduction Strategy and they expressed approval of our other initiatives, including the Long-Term Strategic Framework, our essential road map for the first decade and a half of the century. I appreciate the insights and the views of all Governors on the issues facing the region and ADB in our efforts to reduce poverty. Many Governors said that ADB is now well-equipped with the right policies to tackle this daunting challenge. Some Governors also reaffirmed ADB’s traditional emphasis on promoting regional and subregional cooperation. Many Governors stressed the importance of information and communication technology for the future development of developing countries in the Asian and Pacific region. ADB is the leading institution serving Asia and the Pacific which is home to two thirds of the global poor. It is a unique position to combine global and regional perspectives, knowledge, and resources, to assist the national efforts of all developing countries of the region. With the very strong support of all our member countries and also with the strong support of our Board of Directors and, of course, our very dedicated, capable staff, we are fully committed to an Asia and Pacific region free of poverty. I wish to express my appreciation to the Government of the United States, and to the State of Hawaii and the City and County of Honolulu for the excellent arrangements for this Annual Meeting. We have held a most productive meeting in peaceful circumstances. Our next meeting, the 35th Annual Meeting will be in Shanghai in May next year. I hope to see many of you there. Thank you very much and I now invite your questions.

Thomas Wagner (Associated Press): I wonder if I could ask whether you have any reaction to Myanmar’s request to renewal of loans from the ADB, and also whether the ADB plans to take any vote on that issue, and also the issue of North Korea’s requested membership.

President Chino: Thank you very much. Under the Charter, the Bank’s operations are guided by the Board of Directors representing all 59 member countries. At present, we are not operating in Myanmar but I am greatly encouraged by recent progress, especially political progress, in that country, for example, strengthening of the dialogue between the Government and opposition leaders. This is becoming a very close dialogue, I understand. And also, early this year, the Government invited a European mission to see the situation of that country. So there are very positive political moves, progress in that country. We are monitoring closely the political, economic situations in that country.

Thomas Wagner (Associated Press): Sorry, do you plan to take any step to consider North Korea’s request for membership despite the US opposition?

President Chino: In August 2000, we received a letter from the North Korean Government, indicating their interest to be a member of ADB. The admission of a new member, whether it is North Korea or any other country, is determined on the basis of a consensus of the existing members of the Bank. So when I received the letter from North Korea, indicating their intention to become a member, I immediately notified our member countries through our Board of Directors. We are now waiting for the responses from the member countries.

Sumei Wang (United Daily News): I would like to say that our Governor suggested that ADB can play a more active role in initiating general arrangements to borrow among member countries in his statement yesterday. I would like to know Mr. Chino’s opinion if it is possible to achieve this.

President Chino: Thank you for your question. There are various initiatives now undertaken for the regional and subregional cooperation in Asia and the Pacific. Asian countries have learned very valuable lessons from the recent financial crisis of 1997. And there are initiatives under discussion. One of the initiatives, as you know, is the Asian + 3 initiative, the so-called Chiang Mai initiative, and I have heard that there has been a positive step forward in this initiative among the countries concerned. I think your Governor’s suggestion could be one of the ideas which could be discussed among the interested Asian countries.

Christopher Anstey (AFX News): Mr. Chino, the ADB’s largest shareholder, the US, communicated at this meeting its desire to see the Bank focus aggressively on using its resources to raise productivity growth rather than the indirect goal of poverty reduction. Mr. O’Neill said that poverty reduction can only be a by-product of faster growth and he appeared to present a new approach from the Bush administration. I’m wondering how the Bank is going to incorporate what the United States presented here in its activities over the coming years.

President Chino: We have a Poverty Reduction Strategy which was unanimously approved by the Board of Directors in November 1999. According to this Poverty Reduction Strategy, the first pillar is pro-poor, sustainable economic growth. The second pillar is the social development, and the third pillar is good governance. And if you will read our Poverty Reduction Strategy, it is very clear that learning from the Asian experience, without economic growth, there is no sustainable poverty reduction. So for the poverty reduction agenda to push forward, economic growth is very important. In this, productivity increase is very, very essential so I think Mr. O’Neill is supporting our strategy very strongly. We appreciate his encouragement.

Michael Bociurkiw (MSNBC/Forbes): Those of us who aren’t economists, in listening to the speeches yesterday, get the feeling that the Europeans are very much pushing this poverty reduction thrust while as the previous questioner said, the Americans are focusing more on economic prosperity. But I'm interested, sir, in your personal opinion. For example, if I can put it in a simplistic way: suppose you have $15 million, and you wanted to help Cambodia, would you rather push that into poverty reduction, for example, giving loans, such as microlending or would you like to do something different like build highways or hydroelectric dams? What is your personal opinion?

President Chino: Thank you for your good question. You see, since this Bank was established, this Bank has been always interested in poverty reduction. And everyone knows that without economic growth, there is no sustainable poverty reduction. And another thing which we have learned recently is that poverty differs from country to country. For example, in some countries, like Pakistan, in order to reduce poverty, education of young ladies is essential to give half the population access to economic and social activities, and activate their potential. But in the case of, for example, Sri Lanka, where education is at a very high level, almost everybody has access to basic education. In this country, for example, in order to reduce poverty, road building—which enables farmers access to markets—is essential to poverty reduction. The causes and manifestations of poverty differ from country to country. We continue to pay attention to, for example, infrastructure, if it is necessary for poverty reduction. At the same time, in many cases, it will be also necessary to do a lot of work in the social sector. Both are necessary.

Norie Hata (International Financing Review): Because ADB achieved substantial increase in net income, China has asked ADB to use part of its net income to reduce OCR interest burden. India also talked about a lending instrument for poverty reduction that ADB promised. What steps are you considering taking in response to these questions, these requests? Are there any chances that ADB will use part of its net income to reduce interest rates on projects funded by OCR for poverty reduction?

President Chino: In Asia, there are a little more than 3 billion people—China has almost 1.3 billion people; India, 1 billion people. These two countries have 2.3 billion out of a total Asian population of a little more than 3 billion. Lots of poverty exist there. So poverty reduction in India and China is very, very important for poverty reduction in Asia as a whole. At this moment, these two countries have no access to our concessional lending, the Asian Development Fund. These two countries, at this stage, have no access to this concessional fund. So, in the Poverty Reduction Strategy Paper which was approved by the Board of Directors in 1999, there is a paragraph which says that we have to study the possibility of some kind of innovative product for poverty intervention projects in these two countries, both of which have no access to concessional loans. The other day, Management of our Bank proposed one good idea to the Board of Directors on this. There were, however, diverse responses to this. We have to make efforts to come up with a solution which will be accepted by everybody, every country. It’s a very difficult issue. It can only be determined by the Board of Directors. So we must work hard on what could be possible. We must work hard with our shareholders on this.

Andrew Marshall (Reuters): Two questions, please. Firstly, I would like to ask the President’s opinion on the idea that the recent increase in monetary cooperation we’ve seen between many Asian countries could one day lead to an Asian Monetary Fund. What's the Asian Development Bank’s view on that possibility? Secondly, I would just like to ask your response on some of the criticisms of the Bank that we’ve heard this week both inside and outside the conference hall where people have suggested it lacks transparency, it lacks accountability, and that the United States and Japan have very conflicting views about the role of the Bank on its future. So I'd like your response to those accusations. Thank you.

President Chino: First, the question of the AMF. Yes. One of the most important lessons which we learned from the Asian financial crisis of 1997 is the necessity of a certain type of mechanism which can provide a sufficient amount of short-term liquidity in case of need or emergency. AMF was one of the ideas created to respond to this need. But, judging from the present situation of Asian economies, the recovery as a whole is progressing. For example this year, even though we are affected by global economic slowdown, still we are expecting about 5 percent average growth will be possible for developing Asian countries as a whole. Recovery is going on, and Asian countries are much more resilient than in the precrisis period. Asian countries are much more resilient to external shocks, learning from the Asian financial crisis. For example, with more flexible exchange rate systems, reduced short-term borrowings, increased foreign exchange reserves, and so on. The concept of AMF may not be a very urgent issue at this moment. The concept of AMF could be one of the ideas which could be considered by Asian countries in the medium- to longer-term perspectives.

Andrew Marshall (Reuters): I just would like to ask the President's response to some of the accusations that we've heard both from inside and outside the conference hall this week that the ADB lacks transparency, lacks accountability, and that there’s conflict of opinion, particularly between the United States and Japan, about the Bank’s role in its future.

President Chino: To the contrary, our Bank is a quite transparent institution. We have been working very hard to improve transparency and accountability of the Bank’s operations. Internal governance has been improved very much by various initiatives, including efforts by Management and Board members to work together. We have recently established our Development Effectiveness Committee. This is also a very good step forward for making our Bank more transparent and effective. I think if there is any such rumor, please tell me what is the issue. I would be able to respond very clearly.

Klaus Engelen (Handelsblatt): Mr. Chino, I have been struck by the low attendance from the banking side. For instance, from Germany, there are only two or three bankers from the commercial side here. Also there is rather small attendance looking at the panel of high-caliber seminars. What is your explanation for this? Is it location or other reasons? The other question or part of the question is, I talked to some governors, particularly from Europe, and they told me that basically you run the Bank very well and they are considering now or ready to discuss your second term. The Europeans have checked with the Americans, and the Americans have no position yet, but basically, the Europeans seem to be in agreement to support you for a second term. Did you also hear these rumors? And then the third aspect of the question is simply the fact that we have this Reform of the International Financial Architecture. The G7 and the IMF are the driving forces for financial stability. And it's to be lauded that you have financial stability and the ADB has shared in the effort to set the financial standards. Question: Do you think that there is a backlash? I quote Mr. Aziz, Finance Minister of Pakistan who said money laundering is not a problem of the developed and the emerging market countries; it’s a problem of the OECD. Are the Asians opposing these new standards that come under the heading of the International Reform of the Financial Architecture?

President Chino: I understand that the IT seminar was attended by 350 people and there were many other seminars which had very good attendance. We don’t yet have the final figure of the number of participants. In the case of our previous meeting in Chiang Mai, there were about 2,500 participants. I think that the number could be around that figure. But we have to check. We do not yet have a final figure.

Regarding a possible second term: our very important Poverty Reduction Strategy was approved in 1999. We have prepared for the implementation of this strategy in 2000. This year is the first year of full implementation of the Poverty Reduction Strategy. I am actually fully 100% occupied and focused on how best to implement this strategy most efficiently. I have no time to contemplate other issues. As to the financial architecture, I think, there is a big role for a regional bank. While those international financial architecture issues and other global issues are discussed at the G7 and other global fora, I think ADB has a responsibility and the capability to give valuable input from a regional perspective to these global discussions. There will be a good discussion between the global panel and Asian people, including ADB, on such issues as the one which you raised. We have the responsibility to reflect the perspectives and experience of Asian people in that global discussion.

Glenn Wakai (KHNL): I want to ask two questions: First of all, your thoughts on the protest that took place here this past week, and secondly, the State of Hawaii was really banking on having this conference go on without incident. I wanted to find out your assessment of Hawaii’s performance in possibly enhancing its convention business in the future.

President Chino: Everybody has a right to express their beliefs and ideas. We, as one of the development agencies, are very eager to listen to the voices of the people who are interested in our Bank, in our operations, in order to make our Bank effective in addressing poverty issues in the region. We are very anxious to listen to the people. You know it was very nice to have the opportunity. This time, I had a very good full discussion with many NGOs—about one hour or a little more than one hour—that was a very constructive discussion between myself and the NGOs. I also had the pleasure of meeting other protesters outside the venue. And I thought it was very useful. I listened to their views and I told them that I would give a careful consideration to the petition that includes many, many items. And I promised them to study it carefully and respond as soon as possible. We are welcoming different views. We are a bank which is dedicated to poverty reduction in Asia and we should like to discuss and exchange views with all the people related and interested in poverty reduction issues. Whether they are criticizing us, whether they are going along with us, we are interested in all views. And we really welcome different views. The people of Hawaii have demonstrated very great capabilities of having such a big, important conference in a most fruitful, successful, peaceful way. I’m very impressed by the people. Actually, this Annual Meeting was originally scheduled to be held somewhere else, but for various reasons Honolulu became the venue for this Annual Meeting. And I'm greatly impressed by the capabilities, and good will, and hard work of the Hawaiian people who made very good preparation for these big Annual Meeting conferences in a very short time. Usually, preparation for the Annual Meeting takes two or three years. I'm very much impressed by their capabilities.

May I add to this? I am very impressed by this island. Since the statehood of Hawaii in 1959, this State has made quite a change at a rapid pace. In 1959, Hawaii was basically an agricultural state based on exports of sugar and pineapple. But Hawaii has been very successful in making this State a destination of tourists. And the island with only 1.2 million people is inviting 7 million tourists a year. This is a great achievement. In addition to that, this State is now successful and very famous for its advanced technologies. In addition to that, this time, the Hawaiian people demonstrated their capability that Hawaii can be a very good venue for big, important conferences and serious business talks. So from now on, many people will be very happy to come to hold their Annual Meetings in this city. Thank you.

Atsushi Yamada (Asahi Shimbun): Regarding the various opinions outside, you emphasized on good governance. Yes, I think good governance is very important. Earlier, you said that ADB has a very good transparency. But many countries you lend money to don't have transparency. They have corruption and lack of good governance. So the money you lend is not used healthily in that area. So, what do you think about this matter? A specific case is Thailand Samut Prakarn Wastewater project. And many village people have requested ADB to stop the project construction. How do you think about this problem? Why don't you stop that project? It has a very big lack of good governance. Governance is very important, as you say.

President Chino: Thank you very much for this very important question. Yes, good governance is very important. Good governance, you know, enables effective formulation and implementation of public policies. Good governance enables effective fiscal and macroeconomic policies. And also, good governance reduces corruption and waste in the flow of public money from government to the targeted poor, for example. So good governance is very important. The question is whether this is really observed in many countries. I should like you to know that ADB is the first development institution with a Board- approved formal governance policy, as early as 1995. The Board approved the good governance policy; this was the first time for the MDBs. And also we have a very severe anticorruption policy. These policies are implemented very rigorously. And of course, we are working with many different countries and some countries have some problems in governance. That's one. This is an ongoing effort to balance the level of good governance in many Asian countries. We are making efforts in this area.

As for Samut Prakarn, whether we can stop it or not, that depends on our Bank's regulations. And on the basis of the regulations—which are approved by the Board of Directors, on the basis of regulations, our contract, in other words—the loan agreement between ADB and the country includes the articles of regulations. Unless the case meets some specific criteria stipulated in this regulation, we have no right to stop. But anyway, I should like to tell you that in order to respond to the concerns of the villagers and the stakeholders, we have started our Independent Review composed of world-renowned experts in the area to address the concerns of these people. And this will be very helpful in bringing more transparency and more effectiveness in our loan activities.

Albert Lanier (Fil-Am Courier): I was wondering, I had been to the meeting in NGOs and I'm just curious as to why the new NGO center and desk and network has only come about recently? Because it seems that the ADB, for what I had been told has had a relationship with NGOs for quite a number of years. So something like this would seem very logical and on the face of it, reasonable. So why did it take so long for, not only the NGO center, but also the desk and the network to finally come into fruition?

President Chino: Our relationship with the NGOs started many years ago. In 1985, the post of NGO coordinator was established in our Bank. That was the substantive beginning of our real collaboration with NGOs. But it is taking time, as you say. But last year, when we had a meeting with the NGOs in Chiang Mai, I recognized the necessity of strengthening our dialogue and collaboration with NGOs. I took it very seriously. After we came back from Chiang Mai, I instructed our staff to establish a task force so as to find out what we could do to improve the situation. And then, there was the recent establishment of the NGO center and NGO network. It has taken time, but this is a strong real start of our more productive and energetic relationship with NGOs and civil society. Thank you.

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