Opening Remarks at the PDMC Meeting

Opening remarks by Haruhiko Kuroda, ADB President, at the 19th meeting of the Governors of the Pacific Developing Member Countries (PDMC) at the 42nd Annual Meeting of the Board of Governors, Bali, Indonesia

Thank you, Mr. Chairman.

Governors and Alternate Governors, Ladies and Gentlemen, it is my pleasure to welcome you to the 19th Pacific Developing Member Countries Governors Meeting with ADB Management.

Global Challenges

We meet at a very difficult time for your countries. Last year, we had to confront global food and fuel crises. Today, we are confronted with a global financial and economic crisis that threatens to slow economic growth and increase poverty and hardship in the Pacific.

I am pleased to let you know that I recently visited the Kingdom of Tonga. While it was a fascinating trip for me, I saw how the crisis is severely affecting the Pacific, as well as how difficult and unique the challenges of the Pacific are.

No country remains untouched by the current global turmoil. We forecast that overall economic growth in the Pacific will slow to 3% in 2009. This is down from the record 5.1% growth of 2008, a growth slowdown driven by the global economic crisis. With lower commodity prices, export incomes will decline. And tourism income and remittances are expected to fall as source economies experience severe recession. Most of the region's public offshore investment funds have declined in value, and some large private sector operations dependent on offshore demand and funding are at risk. We need to effectively respond to these challenges so as to come out of this impasse sooner than later. Our challenge now is to assist not only long term development objectives but also to respond to the crisis in the short term.

ADB's Response

It is therefore heartening for us that ADB's member countries-including all of you-agreed to a record tripling of ADB's capital resource base just before we convened for this annual meeting. I am indeed grateful to each one of you for your support to the ADB's 5th General Capital Increase. This capital increase will not only enhance assistance to countries borrowing from ordinary capital resources (OCR), but also to those who draw on the Asian Development Fund (ADF), through OCR income transfers to ADF and the TA Special Fund.

To address severe impacts of the ongoing crisis, we will increase our assistance by more than $10 billion in 2009-2010. This includes a front-loading of ADF operations and a release of $400 million from ADF liquidity reserve, to provide $3.4 billion resources to ADF countries in 2009.

In addition, we have proactively responded to the needs of the Pacific through a crisis response program, which includes monitoring, analytical work and program assistance. We are working closely with our development partners to monitor the unfolding impacts of the crisis and coordinate our assistance.

Pacific Response, Strategy and Operations


I am pleased to note that our assistance to the Pacific has been increasing in recent years. Our loan and grant approvals amounted to $150 million in 2008 with technical assistance approved at $20 million. The cofinancing mobilized in the last two years of about $140 million has exceeded the combined cofinancing of the previous ten years ending 2006. We were also able to provide an additional $72 million in ADF assistance in 2008 on top of the ADF allocation to the Pacific.


We have significantly strengthened our presence in the Pacific. All field offices now have more human resources. We have established joint field presence with the World Bank in Solomon and Tonga, and soon we are going to have a similar presence in Samoa. We have also delegated more functions and operational responsibilities to these field offices.

The first multi-tranche finance facility in the Pacific was approved in 2008 to provide longer-term, more flexible commitment to Papua New Guinea road sector development. Output-based contracting in the Domestic Maritime Sector Project in Solomon Islands and the adoption of public-private partnerships (PPP) for health service delivery in Papua New Guinea are some examples of ADB's flexible and innovative approaches. We have also simplified our business processes to prepare Country Partnership Strategies that better suit your specific needs.

To implement the ADB's Strategy 2020 effectively, we are preparing a new Pacific regional strategy and will share it with you shortly. With your strong participation in its preparation, the new strategy will focus more sharply on the special development challenges you face. The new Pacific strategy will also outline new approaches to implementing policies for better development outcomes and impacts. It will give due recognition to the problems of fragile situations, and it will be better aligned to the Pacific Plan.

To address the global climate change issue that confronts you, we have also prepared, in consultation with your countries, Climate Change Implementation Plans. These will be implemented beginning this year.

Regional Cooperation and Integration


The Pacific is a region with a history of regional cooperation. I am pleased to note the success of ADB's recent efforts to help strengthen the provision of regional public goods and services. But much more can be done to strengthen regional economic integration and this will be a focus under the new regional strategy.


It is really gratifying to note that ADB joined as a founding partner of the Pacific Regional Infrastructure Facility established in 2008. In addition to this and other ongoing regional initiatives you are aware of, we are also processing assistance to facilitate trade in the land border regions between Papua New Guinea and Indonesia, and between Timor-Leste and Indonesia.

In 2008, we also conducted High Level Consultations with all major development partners, with the Pacific Islands Forum Secretariat and with the Secretariat of the Pacific Communities. We will continue to proactively collaborate with our development partners to assist the regional institutions and achieve greater integration outcomes for the region.

In Conclusion

As the global economic crisis unfolds, we are compelled to swiftly and effectively respond to its challenges, and to do so collectively.

We are closely collaborating with other development partners in the Pacific, notably Australia, Japan, New Zealand and the World Bank. We will further strengthen coordination and harmonization with them in line with the Paris Declaration.

We are committed to responding effectively to issues of concern in the Pacific economies, and will continue to actively engage with you through our Pacific Department on these issues in true spirit of partnership.

Thank you for the opportunity to meet with you today, and my best wishes for a productive meeting.

Thank you.


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