MANILA, May 1, 2009 (AFP) - The Asian Development Bank gathers on the Indonesian island of Bali this weekend for its annual meeting against the backdrop of a crippling economic crisis and the threat of a flu pandemic.
While the official agenda was set out well before the swine flu outbreak in Mexico and later beyond, the bank's 67 governors are expected to discuss the economic implications that a global epidemic would have on the region.
|A Yokohama Arena official holds a cup of hot water to show a thermo graphic exam camera system during a press conference at the venue of the World Table Tennis Championships in Yokohama, Japan on May 1. The Asian Development Bank gathers on Bali this weekend for its annual meeting against the backdrop of a crippling economic crisis and the threat of a flu pandemic. (AFP photo)|
The last time it was faced with such a health crisis was during the outbreak of severe acute respiratory syndrome (SARS) in 2003.
That crisis cost Asia about 18 billion dollars, mostly through lost tourism, according to ADB data, with Hong Kong's economy shrinking 2.6 percent and Singapore's by 2.0 percent in the first half of the year.
The ADB's response to SARS was to establish a Crisis Team to examine the impact on ADB staff and dependents on the bank's operations and programmes around the region.
It also reallocated funds to help countries buy equipment to increase their ability to detect and prevent further cases of SARS.
But, while the outbreak is likely to feature high on the agenda, the bank is expected to focus most of this year's meeting on trying to deal with the financial crisis, which has taken the world economy to the brink of recession.
Top of the list will be more spending to help poorer nations manage their economies, a job made easier after the bank announced this week that its board had agreed to triple its capital base to 165 billion dollars.
Earlier, ADB President Haruhiko Kuroda said the bulk of the money would be given by shareholder nations, in particular the US and Japan, it two biggest contributors.
"This substantial increase is a resounding vote of confidence from our shareholders for what we can achieve as a premier development partner in the region," Kuroda said in a statement.
The last capital increase, amounting to a 100 percent hike, came in 1994.
The global economic meltdown, which initially looked as if it might leave Asia relatively unscathed, has begun to bite hard.
In its Asian Development Outlook in March, the bank said that the region's developing economies would expand by just 3.4 percent this year, down from 6.3 percent last year and 9.5 percent in 2007.
"The short-term outlook for the region is bleak as the full impact of the severe recession in industrialised economies is transmitted to emerging markets," ADB acting chief economist Jong-Wha Lee was quoted recently as saying.
However, the bank predicted an expansion of 6.0 percent in 2010.
But having just won approval to for its biggest ever capital increase, the bank will find itself under further scrutiny from lenders -- especially the United States -- on issues such as governance and project oversight procedures.
Ben Diokno, an economist with the University of the Philippines, the country in which the ADB is based, said he believed the bank needs to "redefine itself."
"When the bank was set up 42 years ago, Asia was a very different place from what it is today," he told AFP.
Then, the primary role of the bank was to help foster economic growth and cooperation in what was a predominately agricultural and poor region.
Today that is no longer the case, with China now the third biggest economy on the planet and Singapore and South Korea also major financial forces.
But Kuroda said helping the poor was still the bank's major goal, with the financial crisis threatening to keep more than 60 million people trapped in absolute poverty this year with another 100 million more in 2010.