ADB chief: Asia's key economies showing signs of recovery

Bali Island, Indonesia - China, South Korea and Japan appear to be recovering from the global financial crisis, the president of the Asian Development Bank (ADB), Haruhiko Kuroda, said Tuesday. But Kuroda said some Asian countries had indicated that they were seeking to borrow from the bank's new 3-billion-dollar facility designed to counter the crisis. He did not name the countries. 'The Chinese economy may have already bottomed out ... and the Korean economy shows some signs of recovery,' Kuroda told a news conference at the end of the bank's two-day meeting on the Indonesian resort island of Bali. Kuroda said even Japan, whose economy contracted 3.3 percent in the fourth quarter of 2008, appeared to be recovering. 'I'm cautiously optimistic that Asia can recover by the end of next year,' he said. Kuroda said the region was facing its most difficult economic trouble since the 1997-98 Asian financial crisis. The 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. Growth in the region is 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. 'The effects are being felt across the region, posing a serious threat to its poorest and most vulnerable citizens,' he said. He said the crisis also undermined the region's efforts to achieve the United Nations' Millennium Development Goals, which include halving poverty by 2015. But he also expressed optimism that Asian countries could emerge from the crisis quickly and economically 'stronger than before.' Delegates agreed that climate change poses clear risks to the region's long-term growth and early actions can lessen Asia's carbon dependency and reduce greenhouse gas emissions. Kuroda said the bank was in a strong position to help the region, after its board of governors agreed to triple the bank's capital base from 55 billion dollars to 165 billion dollars last week. But activist groups said that the meeting failed to come up with lasting solutions to the financial crisis and climate threat. The NGO Forum on ADB, a pressure group, criticized the bank for what it called 'a cynical attempt to use the current crisis to re-promote discredited large scale infrastructure-biased development.' 'Unfortunately, throwing money indiscriminately will solve neither the financial nor the climate crisis,' said Joanna Levitt of the International Accountability Project, a global development watchdog. Kuroda said the bank was committed to undergoing reforms, focusing on human resources management, risk management and accountability. Commenting on the outbreak of swine flu, Kuroda said Asia was well-prepared to handle the threat, citing the region's experience in dealing with the outbreaks of Severe Acute Respiratory Syndrome (SARS) and bird flu. 'I'm relatively comfortable with their ability and willingness' to tackle the threat, he said. Kuroda said the bank would also support social safety nets and help sustain investments in economic and social infrastructure in the region. On the sidelines of the Bali meeting 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 also said it would establish an additional emergency fund of up to 60 billion dollars in the event of an Asian financial crisis.