New Solutions Needed to Meet Challenges of Asia's Two Faces, ADB President Tells Annual Meeting

HYDERABAD, INDIA - Asia and Pacific countries should work together to reduce disparities within the region by sustaining high economic growth and spreading the advantages of growth to the disadvantaged, ADB President Haruhiko Kuroda told the official opening of ADB's 39th Annual Meeting of its Board of Governors today.

In a speech titled “The Two Faces of Asia: Working Together for a Poverty-Free Region,” the ADB President emphasized that while absolute poverty is declining, inequality is growing.

“Poverty, in all its aspects, remains our region’s most daunting problem,” he said in his speech to an audience of more than 2,000 delegates at the Hyderabad International Convention Center. “Thus, the abiding passion, vision, and mission of the Asian Development Bank continues to be the elimination of poverty.”

Also speaking at the opening event were India’s Prime Minister Manmohan Singh and P. Chidambaram, Minister of Finance and Chairman of the ADB Board of Governors.

Mr. Kuroda pointed out that the people of the Asia and Pacific region have transformed their economies, that trade has flourished, and the pace of growth has soared.

“The face of Asia is changing. Today, hundreds of millions of people enjoy a better quality of life. The middle classes are growing and Asia's place in the world is rising,” he said.

“But open the lens wider, and another face appears. In this region of increasing prosperity, one in five people still cannot access safe drinking water. Half the population is without proper sanitation … more than 4 million children will die this year, never reaching their fifth birthday.”

In the medium term, pragmatic, sensible solutions to promote social development and sustained equitable growth, good governance, and a commitment to environmental responsibility will help close the gaps in incomes and opportunities, he said, as reflected in ADB's soon to be finalized medium term strategy (MTS).

Mr. Kuroda touched on the most urgent challenges facing the region if the benefits of growth are going to be more equitably shared.

• Achieving the Millennium Development Goals, he said, will require substantial investment, particularly in infrastructure, to sustain high economic growth and extend basic services to the poor, highlighting the need to substantially increase private sector participation. Recently introduced financing instruments will help ADB strengthen its ability to engage the private sector in bridging the investment gap.

• Improving even a single aspect of governance – such as regulatory efficiency or controlling corruption – can bring about a tremendous increase in per capita incomes. "While good governance is fundamental for growth, it is equally important to ensure that individuals are treated fairly and with dignity,” he said. “All evidence shows that when governance is weak, it is the poor who suffer the most.” ADB for its part would strictly uphold governance and anticorruption policies in its operations and work with its development partners to develop a common framework for preventing and combating fraud and corruption.

• The negative consequences of growth, such as environmental degradation, must be curtailed, otherwise the poor will only grow poorer. Mr. Kuroda said that given the region's large appetite for energy, this sector will receive special attention. For example, ADB will expand its investment in clean energy projects to $1 billion a year, and introduce a Carbon Market Initiative that will benefit both developing and industrialized countries. “We cannot continue to rely on fossil fuels and an aging energy infrastructure,” he said. “By working together to make the best use of our resources, we can leave a cleaner, more enduring legacy for future generations.”

• While Asia is making great progress, it is still a patchwork of development. Therefore deeper regional cooperation and integration is the thread to transform the region into a “harmonious tapestry of progress for all.” Across the region, countries are joining forces to confront problems that transcend borders, including natural disasters, AIDS, SARS, and avian flu, Mr. Kuroda pointed out. “All of these events and developments – our setbacks as well as our progress – should inspire us to take our cooperation efforts even further,” he said. “Regional cooperation and integration is an idea whose time has come.”

In the long term, Mr. Kuroda said that new thinking will be needed to solve the region's present and future problems, including rising unemployment, aging populations, rapid urbanization, and the widening gap between rich and poor.

To this end, Mr. Kuroda is convening a panel of eminent persons to provide ADB with insights on the region's future. The panel’s views will be discussed at the 2007 Annual Meeting, to be held in Kyoto, Japan, and help guide ADB in a comprehensive, consultative review of its Long Term Strategic Framework.

Mr. Kuroda concluded by saying that Asia stands at a defining moment.

“We are a resourceful region - a region with the maturity, experience, and confidence to make the policy and investment choices that will finally lift the veil of poverty from our region,” he said.

“There can be only one Asia – one face of Asia, with opportunities open to all. An Asia and Pacific where every individual can live with dignity – free of poverty and sharing in prosperity. I assure you, ADB will continue to be your partner in this journey for human progress.”

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