Asia should rebound next year: ADB president

Bali:Developing countries in Asia should be able to rebound from the global economic crisis and reach 6 percent growth next year, the president of the Asian Development Bank (ADB), Haruhiko Kuroda, said here Monday.

Growth in the region was expected to fall to 3.4 percent this year from 6.3 percent last year and record growth of 9.5 percent in 2007, Kuroda said.

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"With strong national and regional efforts and a mild recovery expected in the global economy next year, developing Asia should bounce back to 6 percent growth in 2010," Kuroda said at the opening of the bank's annual meeting.

"Therefore, this should not be a time of despair," he said. "Our region continues to grow and will remain the touchstone of dynamism and hope, contributing substantially to global growth and poverty reduction."

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.

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 currency reserve pool to counter the global crisis.

Japan and China each committed $38.4 billion, or 32 percent, to the fund, while South Korea would provide $19.2 billion, the ministers said.

The remainder would come from the ASEAN members - Indonesia, Thailand, Malaysia, Singapore, the Philippines, Vietnam, Myanmar, Brunei, Cambodia and Laos.

Officials said the fund was not intended to replace the role of the International Monetary Fund (IMF).

"The region will have a major financial facility supplementary to the major international funding institution, the IMF, which is responsible for that kind of thing," ASEAN Secretary General Surin Pitsuwan said Sunday.

Japan also said it would establish an emergency fund of up to $60 billion in the event of an Asian financial crisis, a scheme separate from the ASEAN pool.

The ADB 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.

"But we can all safely assume that 2009 will be a difficult year for many economies," he said.

The bank plans to set up a $3 billion 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 to $32 billion over the next two years.

Kuroda said Asia would need to rebalance growth, placing more emphasis on domestic demand and consumption rather than exports.

"While the challenges are huge, I believe the crisis is also an opportunity ... for our region - and the world - to fundamentally restructure our approach to development and bring about a more sustainable global balance," he said.

The new approach must also include greater attention to combating climate change as the region needs energy to grow and its share of global carbon emissions could reach 40 percent by the end of 2030, Kuroda said.
Source: IANS