Highlights from ADB’s 45th Annual Meeting (2-5May 2012, Manila)

At the closing press conference of the ADB Annual Meeting in Manila, ADB President Haruhiko Kuroda reported a record number of more than 5,000 registered delegates, including finance ministers and other key policymakers, business leaders, academics, civil society representatives and media.  He also announced that the next ADB Annual Meeting will take place in Delhi, India on May 2-5, 2013.

 The theme on Inclusive Growth through Better Governance and Partnerships” provided a platform to discuss the pressing issue of how to bring the benefits of Asia’s rapid growth to all levels of society, especially the poor.  ADB’s Asian Development Outlook 2012 forecasts a GDP growth of 6.9% for developing Asia and the Pacific in 2012, and 7.3% in 2013. However, the region still faces long-term challenges such as rising inequality – “Determining how best to pursue inclusive growth can lead to sustainable growth, support greater levels of trade, and generate growth in tourism. Conversely, a weaker Asia presents a host of threats to global growth and prosperity.”

 Key issues at this year’s annual meeting included what Asia must do to:  Adapt to the global economic downturn; Build resilience in urban centers; Promote green growth; Ensure regional food security; Grow trade between Asia and Latin America; Strengthen regional cooperation and integration.

 Adapt to the global economic downturn.  According to ADB’s  How Can Asia Respond to Global Economic Crisis and Transformation report , the region must update its growth model to accommodate a “new normal” — prolonged restructuring in advanced economies – and surmount obstacles to sustained and equitable growth in developing Asia.  Long-term prosperity hinges on relying more on domestic and regional markets as well as expanding ties with Latin America and Africa.  Regionally, there is need for a strong, effective and adequately resourced financial safety net to complement national and global financial arrangements. To counter growing inequality between rich and poor, Asia must invest more in human development and social services to better equip its people to benefit from the opportunities of rapid growth.

 Build resilience in urban centers.  Building resilience has emerged as a key global strategy to help reduce the impacts of natural hazards that threaten cities.  According to ADB, disaster risk management should be seen as an investment rather than a cost to save people’s lives and livelihoods, climate proof critical infrastructure, and promote sustainable development.  For every $1 spent in disaster risk reduction, the economic impact of disaster will be reduced by an estimated $7.  The cost of ignoring disaster risks on long-term growth is substantial; and a paradigm shift is needed, from post-disaster compensation for reconstruction and recovery to pre-disaster investment in risk reduction, adaptation, and innovative disaster finance. Urban risk reduction measures in the region, such as planning for urban development and land use patterns; ensuring quality construction and design practices; and risk reduction efforts such as redeveloping buildings to acceptable building codes, are typically not well established.  Asian governments can incorporate urban risk reduction into their national and local development strategies, by e.g. developing incentives and by using market mechanisms to better align risk reduction actions. Private investment in disaster risk reduction can be promoted through tax credits.

 Promote green growth.  An ADB-ADB Institute (ADBI) study – Policies and Practices for Low Carbon Green Growth in Asia – suggests ways for countries in the region to take immediate action to help prevent catastrophic climate change.  Governments must create a carbon market, phase out pervasive fossil fuel subsidies, and establish an Asian free-trade zone for high-impact, low-carbon technologies and services to promote green growth in Asia. It is estimated that Asia and the Pacific will need more than $6 trillion worth of investments in new energy infrastructure by 2030.  Developing countries need to create an appropriate policy and legal environment to attract more private sector participation, while international development institutions should promote the use of risk-mitigating products such as political risk and credit risk guarantees to encourage private sector investment in low-carbon infrastructure.  Furthermore, the low-carbon development agenda needs to expand beyond energy to cover all sectors.

 Ensure regional food security.  Despite rapid economic growth in Asia, food insecurity and inequality remain a reality for millions.  Asian and Pacific governments must find ways to reduce food waste and storage losses, encourage rural development, and provide well-targeted safety nets to protect the poor from hunger, says a new ADB report Food Security and Poverty in Asia and the Pacific: Key Challenges and Policy Issues.  A “second Green Revolution” – one that relies on biotechnology to increase food production – is needed. Weather-based crop insurance, as well as futures contracts that would give farmers a guaranteed minimum income for their crops, are other measures worth exploring, the report said.  The report also recommends that governments set up a “hunger alleviation fund” representing 1% of a country’s GDP, to be used when food prices grow beyond the reach of the poor. The funds could be jointly managed with the private sector, with companies encouraged to contribute using incentives such as tax breaks.

 Grow trade between Asia and Latin America.  A joint ADB-Inter-American Development Bank (IDB) report Shaping the Future of Asia-Latin America and the Caribbean Relationship underscores the need to diversify trade and investment and broaden economic cooperation among more Asian and Latin America and the Caribbean (LAC) countries. Asia is now Latin America’s second biggest trading partner; growing at an annual average of 20% since 2000, trade between Asia and LAC reached an estimated $442 billion in 2011.  This surge is being fostered by an increase in the number of free trade agreements (FTAs) between Asia and LAC.  Most Asian investment has been concentrated in the largest markets, Brazil and Mexico. In order to increase investment throughout the region, governments in both Asia and Latin America need to create more favorable business environments, reduce non-tariff barriers and establish more transparent regulations, the joint report says. To ensure cross-regional knowledge-sharing has the greatest impact, the ADB and the IDB have established a South-South cooperation agreement to help their members deal with complex issues such as regional integration, infrastructure, renewable energy, climate change, institutional development and social policy. Manila was the first time that IDB’s top executive – President Luis Moreno – participated in ADB’s Annual Meeting, following Pres. Kuroda’s participation at the IDB Annual Meeting in March.

 Strengthen regional cooperation and integration.  ADB will support ASEAN+3 plans to double funds to $240 billion under the Chiang Mai Initiative Multilateralization (CMIM) and establish the ASEAN Infrastructure Fund (AIF). The 1997-98 Asian financial crisis has led to ongoing reforms to strengthen the regional financial system and establish a regional crisis support facility. CMIM is a pool of emergency liquidity for use in times of economic crisis; countries can access CMIM funds without IMF conditionalities. The AIF is ASEAN’s largest financing initiative to finance the development of regional road, rail, power, water and other critical infrastructure needs estimated at about $60 billion a year.  ASEAN member countries and ADB have provided initial equity of $485 million; the Fund will be domiciled in Malaysia. ADB will administer the AIF and provide additional co-financing for every AIF project.  One unique feature of the AIF is that it plans to issue debt, which is designed to target the use of the region’s foreign exchange reserves in the future.

Asian Development Fund (ADF).  President Kuroda also announced that ADB secured $12.4 billion for its concessional ADF, a 9.5% increase over the previous four-year period. The funds will be used in 2013-2016 to promote gender mainstreaming, good governance, food security, private sector development and the formation of a Disaster Response Facility.  Established in 1973, the ADF is the oldest and largest of ADB's special funds designed to provide concessional assistance – 1-1.5% interest; 8-10 years grace period; 24-40 years repayment – to ADB's developing member countries (DMCs) that have low incomes per capita and limited or low creditworthiness. 

 Please also find attached highlights prepared by ADB from the 2012 Annual Meeting Knowledge Sharing and Partnership Events (KSPE).  A separate Civil Society Program includes the GUFs’ panel discussion on ADB's Inclusive Growth: Pro-Poor or Anti-Poor?.

 For more info, see:

http://www.adb.org/annual-meeting/2012/main

Asian Leaders to Focus on Inclusive Growth at ADB's 45th Annual Meeting

ADB Assistance to Developing Asia Tops $21.7 Billion in 2011

ADB Secures More Than $12 Billion to Help Asia's Poorest

Asia Must Increase Investment in Urban Disaster Risk Management - ADB Seminar

New ADB, ADBI Book Highlights Region's Potential

 ADB Meets Most Key Development Effectiveness Targets in 2011

Time Running Out for Low-Carbon Growth in Asia - ADB Seminar

ASEAN Launches Biggest Ever Fund to Meet Critical Infrastructure Needs

Global Crisis Must Not Disrupt Asia's Continuing Transformation: ADB Report

Make the Financial Markets Work for Asia's Poor - ADB Seminar

Hunger Persists in Asia Amid Dynamic Economic Growth - ADB Panel

Inclusive, Green, Knowledge-Based Growth Keys to Asia's Future

Reform of International Financial Safety Nets Now a Priority - ADB Seminar

ADB and IDB to Boost Asia-Latin America Links
ADB Concludes 45th Annual Meeting

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ADB Governors Statements_2012agm_vpc.pdf66.88 KB
GUFs Press Statements, Coverage.pdf142.76 KB
Letter to ADB President re May4_29may2012.pdf22.78 KB