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Annual Report 2004 : Part 2: Poverty Reduction : Thematic Priorities
Supporting Regional Cooperation and Integration for DevelopmentSince the early 1990s, the rationale for supporting regional cooperation has rested on two main factors: the imperative need for DMCs to respond to common transboundary problems and the opportunities for greater access to external trade, investment, expertise, information, and technology. The PRS and LTSF formally identify regional cooperation as a core component for reducing poverty. Based on project pipelines for 2004–2007, regional investments will increase to 20% of total ADF concessional lending, representing a sharp increase from 1998–2003 levels of 6%. To advance poverty reduction, preparations began in 2004 on a strategic approach to regional cooperation that will outline how ADB will coordinate support among the five subregions, namely East and Central Asia, Mekong, the Pacific, South Asia, and Southeast Asia. The goal is to prepare innovative interventions for the 2006–2010 medium-term strategy. ADB supports cooperation between and among countries in addressing trade, maritime safety, prevention of infectious diseases, air pollution, financial contagion, terrorism, money laundering, trafficking, and other crimes. Trade, financial, and monetary shocks, risks to the environment, and infectious diseases are particularly important. Among other initiatives, ADB promoted an improved trade environment by supporting customs harmonization and streamlining, combating money laundering, and other measures in coordination with organizations such as the Asia-Pacific Economic Cooperation and the Asia-Pacific Group of the Financial Action Task Force on Money Laundering. Creating a corruption-free business environment is the aim of the global UN Convention Against Corruption and is key to improving trade throughout the region. In an effort to address this critical issue, the Asia-Pacific Anticorruption Initiative supported by ADB and OECD brought together 23 countries to design and undertake effective programs. Increased trade and integration can help countries in many ways. Export-oriented firms and those with some foreign ownership are more competitive than domestically oriented firms by 40% in Indonesia and the Philippines and by 15–20% in the Republic of Korea and Thailand. Firms also boost productivity by linking up across borders to integrate production networks that supply raw materials, manufacture components, assemble finished goods, and move them through regional and global distribution chains to consumers. With assistance from ADB, developing Asian countries are trying to promote similar production networks by improving their regulatory environments and freeing up trade and transactions. The growth arising from increased competitiveness and productivity helps to enhance human and social capital, and to reduce poverty. The same can be said of meeting the requirements of trade agreements. For example, as the PRC has started meeting its World Trade Organization (WTO) commitments on agricultural liberalization, agricultural incomes have risen as farmers shift to value-added crops. It is expected that further improvements will occur as the PRC addresses issues such as rural education and labor mobility. The environmental challenges facing Asia and the Pacific include problems of water allocation, habitat and species conservation, and air pollution. Intergovernmental organizations are the key players, including the Association of Southeast Asian Nations (ASEAN), the Mekong River Commission, and the Clean Air Initiative for Asian Cities. Although these organizations are making progress, the overall institutional framework to address transboundary environmental governance is incomplete. Decisions at the local, national, and regional levels need to be more synchronized. The outbreak of Avian flu in 2004 and the rapid spread of HIV/AIDS along new economic corridors have severely affected the poor. ADB is working in partnership with WHO to quickly assess country readiness to react effectively to contain disease outbreaks and to mobilize financial support. ADB's Community Action for Preventing HIV/AIDS, funded by the Japan Fund for Poverty Reduction, focuses on source and destination areas of mobile populations in Cambodia, Lao PDR, and Viet Nam. ADB is also actively facilitating the provision of regional public goods in combating HIV/AIDS by providing access to information about the epidemiology of HIV/AIDS and about the ways to successfully prevent the disease. Although proactive regional approaches are making headway, more resources and commitments from regional governments are needed. In collaboration with UNICEF and other partners, ADB worked with five countries—PRC, Indonesia, Pakistan, Thailand, and Viet Nam—on national country investment plans for food fortification to tackle the critical and persistent problem of micronutrient malnutrition. The project included four regional forums and workshops with sessions devoted to flour and oil fortification; improving the micronutrient content of complementary foods for young children; and regulation, quality assurance, surveillance, and trade in fortified processed foods.
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