ADB Madrid Meeting to Seek Ways to Fight Poverty
By Na Jeong-ju
Staff Reporter
Asia's financial leaders will gather in Madrid, Spain next week to discuss regional cooperation and lay the groundwork for sustainable growth for the next decade amid rising concerns over a global food and energy crisis.
During the 41st annual meeting of the board of governors of the Asian Development Bank (ADB), scheduled for May 3-6, member nations will engage in a host of formal and informal consultations that will help shape common policies for the region's economic, financial and social prosperity.
One of the highlights of the gathering will be a discussion on ADB's long-term strategies.
ADB has launched ``Strategy 2020,'' a set of new long-term action plans aimed at achieving an Asia and Pacific region free of poverty. It will serve as ADB's main strategy from 2008 to 2020, replacing the long-term strategic framework for 2001-2015 released in 2000.
To fight poverty in a region of more than 600 million poor people surviving on $1 a day, Strategy 2020 will focus ADB operations on three development agendas ― inclusive economic growth, environmentally sustainable growth and regional integration, ADB officials say.
``Strategy 2020 reshapes, redirects, and repositions ADB for a more innovative and effective development role in our rapidly changing region and within the international aid architecture,'' ADB President Haruhiko Kuroda said.
Strategy 2020 sets ADB's new strategic course, emphasizing that poverty reduction can only be sustained if more people are economically productive, economic growth takes place in a well-managed natural environment, and neighboring economies work within larger and freer markets, according to the bank.
Finance ministers, heads of central banks as well and representatives from the private sector, academia, media, and civil society groups from around the world will gather for the consultations. Organizers said some 3,000 participants will attend the annual meeting.
Following the financial crisis in 1997, the region's economies realized the importance of economic cooperation among themselves and the need to institutionalize such interdependence.
Regional Integration
Throughout the past decade, global and regional economic landscapes have changed extensively.
Most Asian economies have substantially liberalized foreign trade and direct investment regimes. Increasing intra-regional trade in Asia, improved physical connectivity, rapid growth of large emerging market economies such as China and India, the spread of vertically integrated production networks and the export of oil and gas resources from Central Asian economies have brought Asian economies ever closer together.
East Asian economies have embarked on several initiatives for economic regionalism in the areas of trade, investment, money and finance.
The Madrid meeting will focus on issues and challenges of wider and deeper Asian integration amid financial market instability caused by the U.S. sub-prime mortgage crisis and rising raw material prices.
Specifically, it is expected to cover the roles of regional players, the direction and pace of the Asian integration process and possible problems and challenges that lie ahead, particularly those that have considerable implications for ADB's developing member countries, organizers said.
By 2012, 80 percent of ADB's lending will be in five core operational areas ― infrastructure, environment, regional cooperation and integration, finance sector development and education.
By 2020, about 50 percent of operations will be in private sector development and private sector operations, and 30 percent in regional cooperation and integration. ADB will continue to operate on a more selective basis in health, agriculture and disaster and emergency assistance, ADB officials said.
Using up to $100 million in seed capital, ADB is helping establish five private sector funds with a total target investment of up to $1.2 billion in clean energy projects in Asia.
``ADB believes the success of these funds will help demonstrate the credibility of private equity in the emerging clean energy sector in developing Asia and mobilize capital to support other private equity funds,'' said Mu-Shin Kim, Investment Specialist in ADB's Private Sector Operations Department.
The funds ― MAP Clean Energy Fund, China Environment Fund III, GEF South Asia Clean Energy Fund, Asia Clean Energy Fund, and China Clean Energy Capital ― will each receive up to $20 million in capital from ADB. The five funds were selected from 19 fund managers.
South Korean company GS Holdings and its subsidiaries will invest in the Asia Clean Energy Fund. GS will also be the manager and advisor along with Korea Technology Investment Corp.
The investment is in line with the group's decision to more aggressively advance into clean energy and power generation businesses, according to the group. It expected the project to add to its potential as a leader in the energy sector, and hoped to expand the business scope to the alternative energy business.
By 2030, global energy demand is expected to rise by 53 percent, and developing Asia represents a large portion of it. ADB has been focusing on shifting Asia's energy demand from fossil fuels to clean energy due to price rises and environmental problems.
``Significant resources need to be invested into clean energy and low-carbon investment alternatives over the next few decades,'' Kim said.
ADB is Asia's leading development institution and a center for knowledge in economics, development and regional integration.
The Manila-based bank is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members ― 48 from the region. In 2007, it approved $10.1 billion in loans, $673 million in grant projects, and technical assistance amounting to $243 million.
