Speech by
President Tadao Chino
Asian Development Bank

at the 14^th PDMC Governors' Meeting

14 May 2004
ICC Jeju, Republic of Korea

Distinguished Governors, Members of the Board, Ladies and Gentlemen,

It is a great pleasure for me to participate in this year's Pacific Governors' Meeting.

In my brief remarks this afternoon I would like to touch on two issues. The first is improving global economy and the opportunity a positive external environment offers to the Pacific. My second point is that the preparation of a new ADB Pacific Strategy is important; it defines how we can work together towards social and economic development and poverty reduction in the Pacific.

After weathering some turbulent years, the United States is growing strongly again, Europe's performance is modestly positive, and the key economies of Asia are surging ahead. The rapid economic growth of People's Republic of China (PRC) continues and is now being joined by India, while Japan has resumed solid growth.

Despite these favorable conditions in the major economies as well as in other key trading partners for the Pacific, such as Australia and New Zealand, the quest for strong and sustainable economic growth in the Pacific remains elusive. The Pacific region did not benefit from strong global growth in the 1990s. As the global environment now regains its strength, it is vital that the Pacific become engaged more successfully than in the past.

As you are well aware, economic growth has not kept pace with population growth in some Pacific countries. Consequently, social indicators show access to, and the quality of, social services are poor. Poverty continues to be the most serious development issue in the Pacific.

This is the context for main topic of today's discussion-ADB's new Pacific Strategy for 2005 to 2009. From a demographic perspective, the Pacific is the youngest subregion in the broader Asia-Pacific region. We urgently need to accelerate job creation for Pacific youth, and to ensure that we can provide adequate social services, especially education. To do this, economic growth in the Pacific over the next decade will need to improve substantially.

Later this afternoon, Jeremy Hovland, Director General of ADB's Pacific Department, will give a more detailed presentation on the Pacific Strategy, but first let me describe three opportunities provided by the new Strategy.

First, an exercise of this type allows us to think again about development in the Pacific, about ADB's role, and consider fresh ideas and approaches. Present trends for the Pacific are not encouraging, so "business as usual" does not appear to be the right approach. We all need to think actively about how we can improve development results. One means is through greater and more informed participation in development programs. This requires raising awareness of key development issues, more effective communication with all segments of society, and greater transparency and accountability.

Second, Pacific leaders are moving to further strengthen regional cooperation, and regional institutions. The region has had a striking success in the past 12 months with the Regional Assistance Mission to the Solomon Islands, bringing stability and fresh development opportunities to the country. Regional cooperation is especially important in the Pacific, where it can provide economies of scale, promote the sharing of knowledge and solutions to common problems, and reduce vulnerabilities.

Finally, I would like to stress that ADB is committed to deepening our investment in partnership with all of you. We want to build a real consensus on the way forward. The establishment in 2004 of our new offices in Port Moresby, Suva and Sydney is intended to be just one example of ADB's efforts to work more closely with the Pacific and its people.

Before I conclude, I would like to note that discussions on the eighth replenishment of ADF (ADF IX) just concluded successfully two days ago in Seoul. Donors reached agreement on an ADF IX program, covering four years from 2005 to 2008 at a level of $7 billion, significantly higher than ADF VIII. Donors have also agreed to establish a grant program in ADF IX, for the first time in ADF history. Under the grant program, renewed funding for our technical assistance will be provided, which is of special importance to our Pacific members. Under our agreement with the donors, the new ADF funds will be allocated much more strongly on the basis of performance and results. So let us commit to working even more closely together to making real progress in reducing poverty and promoting growth in the Pacific.

In conclusion, these times present the Pacific both challenges and opportunities. The key challenge is to improve development performance in the region and to eliminate poverty. An improving external environment provides an opportunity, which you can seize with greater subregional cooperation, and appropriate policies and institutional reforms. The new ADB Pacific Strategy will strengthen the partnership between ADB and the Pacific, and help us realize our shared vision for a brighter future.