Asian bank president cautiously upbeat on economy (Roundup)

Bali Island, Indonesia - Developing countries in Asia should be able to rebound from the global economic crisis and reach 6-per-cent growth next year, the president of the Asian Development Bank, Haruhiko Kuroda, said Monday. Growth in the region was expected to fall to 3.4 per cent this year from 6.3 per cent last year and record growth of 9.5 per cent in 2007, Kuroda said. 'With strong national and regional efforts and a mild recovery expected in the global economy next year, developing Asia should bounce back to 6-per-cent growth in 2010,' Kuroda said at the opening of the bank's annual meeting in Indonesia. 'Therefore, this should not be a time of despair,' he said. The two-day annual meeting on the resort island of Bali was being attended by ministers, central bank governors and officials from the bank's 67 member countries. Kuroda said Asia would need to rebalance growth, placing more emphasis on domestic demand and consumption rather than exports. He said the region should also pay greater attention to fighting climate change as the region needs energy to grow and its share of global carbon emissions could reach 40 per cent by the end of 2030. A new book released on Monday by the Asian Development Bank revealed that Asia's infrastructure is generally below the global average and many parts of the region are isolated economically and geographically. Trade competitiveness relies heavily on efficient, seamless infrastructure and poor connections would continue to hinder growth, the book said. On Sunday, Japan, China and South Korea agreed with the 10-member Association of South-East Asian Nations (ASEAN) to set up a 120-billion-dollar currency reserve pool to counter the global economic crisis. Japan and China each committed 38.4 billion dollars, or 32 per cent, to the fund while South Korea would provide 19.2 billion dollars. The rest would come from the ASEAN members - Indonesia, Thailand, Malaysia, Singapore, the Philippines, Vietnam, Myanmar, Brunei, Cambodia and Laos. Officials said the scheme was not intended to replace the role of the International Monetary Fund. Japan also said it would establish an emergency fund of up to 60 billion dollars in the event of an Asian financial crisis, a scheme separate from the ASEAN pool. The Asian Development Bank has warned that the crisis would keep more than 60 million people in developing Asia trapped in poverty this year and nearly 100 million more in 2010. Indonesian President Susilo Bambang Yudhoyono warned that social and political unrest could erupt in many countries if the crisis went unchecked. 'We have no clear indication whether the worst is already behind us or whether there is more bad news around the corner,' Yudhoyono told the opening session of the meeting. Describing the crisis as 'the most serious one since the Great Depression' in the 1930s, Japanese Finance Minister Kaoru Yosano said he believed 'the crisis will subside in the not-too-distant future.' South Korean Finance Minister Jeung Hyun Yoon said the region needed to push forward talks on a new regional finance architecture to build up economic and financial stability. 'Along with efforts to enhance economic and financial coordination in the region as well as to strengthen the role of the ADB, I am sure we will overcome the current crisis in the near future,' he said, using the bank's acronym. The bank plans to set up a 3-billion-dollar fund to provide emergency loans to crisis-hit member countries faster and more cheaply than under the bank's existing programmes. The fund would help increase total loan disbursements by the bank by 10 billion dollars to 32 billion dollars over the next two years. Last week, the bank's board of governors agreed to triple its capital base from 55 billion dollars to 165 billion to enable it to boost support for countries affected by the global downturn. But activist groups criticized the move, saying the bulk of the money was intended to go to private clients and big infrastructure, which they said brings little benefit to the poorest of the poor.