Catalog

At the Helm
ADB Review [ August 2005 ]

By Lynette R. Mallery, (lmallery@adb.org)
Senior External Relations Specialist
and
Marcia R. Samson, (csamson@adb.org)
External Relations Specialist

Haruhiko Kuroda, Japan’s former Vice Minister of Finance for International Affairs, took over as Asian Development Bank (ADB) President on 1 February 2005. ADB’s Board of Governors unanimously elected him as ADB President to succeed Tadao Chino, who announced his resignation in August 2004.

Before ADB, Mr. Kuroda, 60, was Special Advisor to the Cabinet of Japanese Prime Minister Junichiro Koizumi and a professor at the graduate school of economics at Hitotsubashi University, Tokyo.

In a career spanning nearly 4 decades, Mr. Kuroda has represented Japan’s Ministry of Finance at international monetary conferences as Vice Minister of Finance for International Affairs.

Between 1997 and 2003 during his terms as Director-General of the International Bureau and as Vice Minister of Finance, Mr. Kuroda helped design and implement the $30 billion Miyazawa Initiative—Japan’s response to Asian economies hit by the 1997–1998 financial crisis. Under his leadership, Japan helped Asian nations establish a network of currency swap agreements under the Chiang Mai Initiative to avert another crisis.

He joined the Ministry of Finance in 1967 and, 8 years later, was seconded to the International Monetary Fund. After returning to the Ministry, Mr. Kuroda assumed senior posts in the Ministry’s international finance and taxation bureaus. While Deputy Director-General of the International Finance Bureau, he was responsible for Japan’s official development assistance and relations with multilateral development finance institutions including ADB.

Mr. Kuroda served as President of the Ministry’s research arm, the Institute of Fiscal and Monetary Policy, for a year before returning to the International Finance Bureau as Director-General. Two years later, he was promoted to Vice Minister of Finance for International Affairs, responsible for policy planning, international coordination, and external representation.

After retiring from the Ministry in 2003, Mr. Kuroda was appointed Special Advisor to the Cabinet of Japan’s Prime Minister Junichiro Koizumi to advise the premier on international monetary issues. He has authored several books on monetary policy, exchange rate, international finance policy coordination, international taxation, and international negotiations.

Born in 1944, Mr. Kuroda holds a BA in Law from the University of Tokyo and a Master of Philosophy in Economics from the University of Oxford.

In an interview with ADB Review, he outlines the region’s greatest challenges and how ADB is responding to them.

What is your vision for Asia and the Pacific?

My vision is a region free of poverty, a region free of income disparities across countries, a region that has achieved its economic development potential. I believe that the region has good prospects in the coming years, despite the fact that a huge number of poor people currently live on less than $1 a day. To achieve this vision, ADB will have to enhance its efforts in helping economies develop by encouraging regional integration and accelerating economic growth.

Aside from poverty, what challenges face the region?

Of course the greatest challenge is poverty. But there are other challenges as well. The Asia and Pacific region is diverse, and the countries within it are at various stages of economic development. The People’s Republic of China and India are developing tremendously, yet poverty still exists in many areas. There are great income disparities among countries. The small island countries in the Pacific must be developed. And postconflict areas, such as Afghanistan and Cambodia, still have very weak human and institutional capacities. Many countries need assistance in capacity building. Low-income countries must be helped in transforming into middle-income countries.

And the challenges are constantly changing. It is, therefore, important for ADB to change as well—to improve and be able to address the many and diverse needs of the countries in the region.

Is ADB up to the challenge?

Yes. I believe that ADB and the staff have the capability to address the challenges. ADB has to continue to transform itself. As a whole, the region has been successful in achieving economic growth. ADB has contributed to that growth, but we cannot be complacent. The institution needs to adjust. The region is dynamic and has good prospects of accelerating development and transformation. It is important for ADB to constantly improve its capability and operations.

ADB is in the midst of implementing a reform agenda. What areas need improvement?

Stakeholders would like to see clear results from ADB’s operations. We must respond positively to this request. We must be accountable in supporting our member countries. Performance-based results and results-based management are important in strengthening our efforts to help our members.

Performance-based management within ADB is also necessary. The nature of our operations is complex. We have to clearly show the results of our operations. The work of ADB staff must be more performancebased and results-based. As President of ADB, I will strengthen performance-based management through better human resource management and improve staff morale and incentives. Our Human Resources Strategy will help with this.

How does ADB intend to narrow the development gap among countries in the region?

The overall objective of ADB is to reduce poverty. To attain that, we need higher economic growth, better governance, and more social investment. The PRC and India are different culturally, but their economies have been developing very fast. Each country is unique, and it is ADB’s role to help each country reach its potential. One strategy will not be applicable to all other countries. Each country must have its own poverty reduction strategy and its own development strategy.

Are you confident that the region can still achieve the Millennium Development Goals (MDGs)?

Achieving the MDGs might be difficult in some parts of the region. We have to upgrade our efforts in reducing poverty. Regional cooperation with development partners is essential. Partnership is extremely important, especially cooperation with bilateral and multilateral donors, and with ADB’s developing member countries themselves. Regional cooperation efforts have been making some progress in the last couple of years. This trend must be extended and strengthened. Although ADB is a major development player, it cannot reduce poverty by itself.

What are your views on having a single currency for the region?

Having a single currency is a long-term objective that may take 20–30 years to reach. There is potential for this, although no consensus has been reached. Having a single currency requires developing a single market, reducing internal tariffs, removing impediments against the movement of labor, harmonizing domestic regulations, increasing capital mobility, and transferring technology. Europe has been successful in creating a single currency but it was a huge effort. I don’t see Asia doing this overnight, but I think it is a worthwhile goal for the region.

What is ADB’s role in the development of a single currency for the region?

ADB, as a regional development bank, has the obligation to encourage and foster regional economic integration that could lead to a single currency. In the next 5 years, ADB can further encourage regional economic integration in the Asia and Pacific region. It is already helping countries toward this end through its regional cooperation initiatives. ADB has been successful in promoting regional cooperation, particularly in the Greater Mekong Subregion, although more tangible results need to be seen. Another way is to support other efforts such as the Chiang Mai Initiative and the Asian bond markets. Technical inputs to fostering economic integration will be needed.

Go back to current issue

Email this to a friend