Asia and Pacific Moving into More Integrated and Inclusive Era, ADB President Tells Annual Meeting

ISTANBUL, TURKEY (4 May 2005) - The Asia and Pacific region is moving into a new era of development, Asian Development Bank (ADB) President Haruhiko Kuroda told the opening of the 38th Annual Meeting of the Board of Governors today.

"Developing Asia is in the midst of a fundamental and far-reaching transformation," he told the gathering of development partners, private banks, civil society, NGOs and media in Istanbul. "It is no longer on the periphery of the global economy - it is central to global economic progress." Asia now accounts for 30% of global gross domestic product, based on purchasing power, he added.

Recognizing what benefits one can benefit all, countries in developing Asia are pursuing regional cooperation, said Mr. Kuroda. Free trade agreements are proliferating - intra-regional trade accounts for nearly half of all trade in Asia.

In addition, Governments are implementing key policy reforms, improving regulatory frameworks and strengthening internal governance and institutions.

Sustained, rapid growth is fundamental to achieving the vision of a region free of poverty, he said in his speech, entitled "Building on Momentum: A New Era of Development for Asia and the Pacific."

A 1% increase in household income is associated with a 2% decline in poverty.

But growth alone is not enough, said Mr. Kuroda. "I see us moving into a new era of development - more interdependent, more integrated and more inclusive," he said. "An era where nobody is left behind."

For despite remarkable progress - over 200 million people in the region have broken free of poverty in the last 15 years - some 700 million people still struggle on less than $1 a day.

Of the Millennium Development Goals - targets to cut poverty in half and raise living standards around the world by 2015 - Mr. Kuroda said: "If they are not achieved in Asia, they will not be achieved at all. And if they are, the benefits will be profound - not only for Asia, but also for the world."

The region's dynamic changes also mean that ADB must change, said Mr. Kuroda. "The new era of development requires that ADB become more relevant, more responsive and more focused on results."

To remain relevant, ADB is striving for more focus and selectivity in its operations. "It is the only way we can offer and sustain high quality products and services to our clients," said the new ADB President.

The areas of greater focus include:

• Scaling up financial assistance, especially to support the non-income Millennium Development Goals. This means investing more in sectors such as water supply, sanitation, education and health care.
• Paying special attention to improving the lives of women and to address the increasing spread of HIV/AIDS.
• Engaging more effectively with post-conflict and fragile states.
• Taking a larger role in closing developing Asia's massive infrastructure financing gap, estimated at more than $250 billion a year. This includes pursuing innovative ways to catalyze higher levels of private sector investment.
• Promoting closer regional cooperation and integration by building on existing subregional
• Deepening partnerships with regional bodies such as ASEAN + 3 to improve trade and financial linkages. ADB's recently established Office of Regional Economic Integration will be a focal point for these efforts.

Being more responsive entails being more timely and more innovative, said President Kuroda. ADB is this year introducing measures to reduce the preparation time for projects and improve project implementation. To be more innovative, ADB last year launched debut local currency bond issues in India and Malaysia and this year plans to issue local currency bonds in Thailand, Philippines, and People's Republic of China.

ADB is also developing new financial instruments and modalities, said Mr. Kuroda. These include local currency financing, sub-sovereign lending, refinancing and a multi-tranche financing facility. To support these new instruments, ADB plans to establish an independent, comprehensive credit and financial risk management unit.

As part of its implementation of the Managing for Development Results framework, ADB is shifting focus from activities and inputs to outcomes and impacts. At project level, a new design and monitoring framework helps to identify results early on, along with more specific indicators to monitor progress.

ADB has also prepared results-based country strategies and programs on a pilot basis and will expand this to all its developing member countries.

In addition, ADB is applying its new performance-based allocation policy to its concessional ADF IX resources on the basis of economic management, socially inclusive development, governance, and portfolio performance.

A new human resources strategy will increase accountability for results at the individual level, said Mr. Kuroda. And a new Public Communications Policy, to provide the public with improved access to documents, places ADB at the forefront of multilateral development banks in terms of transparency and access to information.

Finally, ADB has established an Integrity Division to strengthen its ongoing fight against fraud and corruption within the Bank and in all ADB-financed activities.

In his first annual meeting since assuming office as ADB President on 1 February 2005, Mr. Kuroda said that shareholders' continued support and engagement were essential in helping ADB chart a course to help build a future of hope, opportunity and prosperity for all the people in Asia and the Pacific.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members, with 45 from the region.

Contact Person

Graham Dwyer
Tel. No. (+90-212) 241-8000 loc. 2548
E-mail: gdwyer@adb.org