Empire Feature: ADB

Asian Development Bank Fighting Poverty in Asia and the Pacific

Banking on the ADB

Cyberabad is all set to host a high-powered meeting of the Asian Development Bank, which is facing a major conundrum: How to lift 1.9 billion people who live on less than $2 a day cycle in a region that is also the world’s economic engine

By Rahul Basu

Hyderabad, India’s most cyber-savvy city after Bangalore, is hosting the 39th meet of the Asian Development Bank (ADB) from May 3-6. Based in Manila, the ADB is a multilateral finance institution that promotes economic and social progress in the Asia-Pacific region. The meet assumes special significance as it is being held after a gap of 20 years. What will be on top of the bank’s agenda? The question becomes all the more relevant given the growing buoyancy and dynamism of Asian economies over the last decade and the greater influence of the region on the world map. India’s finance minister P. Chidambaram will chair the meeting so we can assume that further easing up of governance and liberalisation will be given top billing. 

For those not in the loop about what the ADB does, here’s some dope. The bank is managed by a Board of Governors, a Board of Directors, a President, four Vice-Presidents, and the Heads of departments and offices. Each member country nominates one Governor and an Alternate Governor to vote on its behalf. The Board of Governors elects the 12 Directors (each with an alternate)-eight representing countries within the Asia-Pacific region and four representing countries outside the region. The Board of Governors also elects the President for a term of five years, with the possibility of re-election. The President chairs the Board of Directors and follows its directions in conducting the business of ADB.
In modern times, no country has managed to substantially reduce poverty without greatly increasing the use of energy. Energy reduces poverty by boosting poor people’s productivity and thus their income. The speakers in the seminar will discuss:
  • The potential and risks involved in meeting the energy needs of Asia to satisfy consumer demands, fuel economic growth, and bring modern energy services to the poor in a locally and globally sustainable manner. 
  • The role of different agents involved in this process-the government, the producers and consumers and the development community, particularly ADB.
  • Policy and technological options along with success stories at country, regional, and global levels.

Here we take a bird’s eye view of the proposed topics to be dealt with at the forthcoming conference.

Over the past decade, a growing awareness of the importance of regionalism in managing the challenges of globalisation has led to stronger regional economic cooperation and integration initiatives in Asia. Progress has been made by the region in the areas of trade, investment, money and finance, and regional infrastructure.

While economic cooperation initiatives have been mainly bilateral and subregional, links are starting to be built across subregions, and Asia as a whole is starting to integrate. Subregionalism is beginning to be the stepping stone for Asian regionalism. 

As a regional development bank, ADB has a unique mandate to play a proactive role as a catalyst and coordinator for regional cooperation and integration in Asia. The seminar will have senior level speakers who will address the following challenges facing Asia’s efforts toward economic integration:

  1. How far should Asia go in its efforts towards regional economic integration? 
  2. Should the ultimate objective (say, over the next quarter century) be the adoption of a single currency, as in Europe? 
  3. Should Asia’s economic integration be modeled on the North American Free Trade Area (NAFTA), i.e., far short of adopting a single currency but creating a giant free trade area? 
  4. Should Asia produce its own model of economic integration, threading together some elements of both the European and North American models and adding new ones of its own? 
  5. What are the key constraints to achieving an economically integrated Asia, whatever the final form such integration may take? 
  6. What are the likely effects of Asian regionalism on the rest of the world and how can Asia make its regional integration process a building block, rather than a stumbling block, to the globalization process?

The seminar will be of interest to a wide audience including government officials, academics, investors, and other multilateral institutions. The new framework for banking supervision, Basel II, which is due to be implemented from 2008 is supposed to come up for discussion at the conference. In view of its complexity, developing Asia will have to follow a sequenced approach to its adoption given the stage of development of the banking industry, the legal and regulatory environment, accounting practices, rating agencies, and the level of understanding of risk measurement and management of the banking industry. The capacity of the regulators to effectively implement new methodologies and supervise the banks also has to be taken into account.

The seminar will examine the challenges and implications for Asia and specifically address:

  1. Implications of Basel II for emerging and developing economies.
  2. Perspectives on the choices national regulators will offer to the Asian banks.
  3. The approaches chosen by individual Asian countries and how countries will address the technicalities of the credit risk, market risk and operational risks.

The development community is increasingly recognising the importance of knowledge for economic growth and poverty reduction. Moreover, the technological revolution, centered on information technology, is now reshaping societies based on access to information and knowledge. 

In the 21st century, economies are becoming more globally interdependent, introducing a new form of the relationship between economy, government, and society. Increasingly, the main actors in a knowledge-based economy will be those who have the capacity to efficiently generate, process, share, and turn information into knowledge. 

This seminar will present the broad framework of knowledge-based economies, including the potential and role of information and communication technologies (ICT), which can be instrumental in supporting sustainable development and economic growth.

May 2006

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