ADB pushes for capital hike to address crisis
By Karen Flores, abs-cbnNEWS.com | 03/09/2009 7:57 PM
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Despite resource constraints, the Asian Development Bank (ADB) said Monday it is planning to increase its original $12-billion capital this year to assist its developing member countries affected by the global economic crisis.
Speaking before finance ministers and international leaders, ADB President Haruhiko Kuroda said the bank is planning to use the amount to ensure that developing Asia has sufficient access to financing through a mix of loans, grants, and credit guarantees.
In particular, Kuroda said the ADB is planning to employ a combination of measures which include targeted lending, greater use of guarantees, and enhanced co-financing.
“We must continue our development agenda, especially in the critical areas of infrastructure, education, and health. ADB stands ready to play a larger role in channeling resources to developing Asia in 2009,” Kuroda said.
Kuroda did not specify the needed amount to fulfill such responsibilities. He said, however, that ADB’s shareholders are set to reach an agreement in its upcoming annual meeting in May.
ADB's shareholders include a number of developing and developed countries within the Asia and Pacific region, and 19 other Organisation for Economic Co-operation and Development (OECD) countries. OECD members hold 64.5 percent of total subscribed capital and 58.5 percent of total voting rights.
The OECD countries include Japan, US, and UK whose economies are still being battered by the global crisis.
Impact to Asia
According to Kuroda, there are four interrelated impacts of the global economic crisis in Asian countries, which include the reduction of exports, depressed domestic equity markets and conservative lending strategies, constrained credit for small and medium enterprises and microenterprises, and reduced remittances.
Given these, he called on governments to protect the most vulnerable sections of societies through targeted support for the poor and public spending which creates jobs while preserving macroeconomic stability.
In a study, the ADB said financial assets worldwide lost $50 trillion last year, which is equivalent to one-year's worth of the world’s gross domestic product. Of this amount, developing Asia suffered $9.6 trillion in losses.
“This is by far the most serious crisis to hit the world economy since the Great Depression. While this crisis originated in the US and some European countries, by now no region or country is insulated. I am afraid things may get worse before they get better. However, I remain confident that Asia will be one of the first regions to emerge from it, and will emerge stronger than ever before,” Kuroda said.
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