Asian Development Bank president Haruhiko Kuroda was confident at its 42nd annual meeting that Asian economies could bounce back to full recovery by the end of 2010.
Kuroda’s optimism was based on his own view that Asia’s biggest economies, especially Japan,
China and Korea have been showing signs of recovery, whilst Indonesia has continued to show positive growth.
He said China’s downturn may have bottomed out, while the Korean economy shows some growth, and the Japanese economy, which contracted in the last quarter of 2008, shows signs of bottoming out.
“It's not a uniform picture, but on the whole I’m cautiously optimistic that Asia will come out to full recovery by the end of next year,” Kuroda said after the closing of the annual meeting here on Tuesday.
Moreover, Kuroda said, the ADB has more resources available now to help crisis-hit countries to recover.
With its capital base tripled from US$55 billion to $165 billion, Kuroda said, ADB can now deploy $10 billion in additional funds for the poorest nations for this and next year.
Of that figure, $3 billion will be used especially to help crisis-hit countries in the form of fiscal
support and $1 billion to help facilitate trade through trade financing facilities.
“In the coming months, we will focus on programs to stimulate growth, trade, capital inflows and private demand,” Kuroda said.
“Our support will be flexible and responsive with due diligence, providing coordinated assistance that countries need quickly and effectively,” he added.
Kuroda’s assurance responded to requests from some developing members who wanted faster disbursement of loans to mitigate the impacts of the crisis and restore positive growth in the region.
Indonesian finance minister Sri Mulyani Indrawati said the main outcomes from the ADB meeting included the ADB's increased capability and capacity to respond to the crisis, with better policy coordination between ADB members.
She added ADB member countries had agreed to more integrated regional development and that the bank would help reduce the gap between its richer and poorer members by allocating more concessionary loans.
“This is an historic meeting and will increase the international community’s confidence in Indonesia,” Mulyani said.
All ADB shareholders agreed to increase the bank’s capital by three times to $165 billion, the first big increase since 1994 and the biggest capital injection since its inception in 1966.
Indonesia, according to Mulyani, is currently the ADB's sixth largest shareholder.
To maintain its position, Indonesia needs to contribute Rp 2 trillion over the next five years.
At the meeting, some developing country members, especially China, indicated they wanted to increase their say in multilateral financial institutions, including the ADB.
China, with over $1 trillion in reserves, has the capacity to increase its shares in the ADB.
However, as things stood, China could not do so unless all member countries also did so.
ADB president Kuroda, however, noted that in the longer run, in-creasing the voices of bigger developing countries like China may be possible through special increases in capital.
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