Financial Times

Hyderabad, India - “We are very upset. ADB President Haruhiko Kuroda did not answer our questions concretely and categorically,” said Princess Nemenzo, International Convener of the NGO Forum on ADB, after a meeting with the ADB president, the Forum said in a statement.

The Forum, an Asian-led network of civil society organizations monitoring ADB’s projects and policies since 1992, said civil society organisations from all over Asia and Pacific region were once again disappointed with the ADB president for completely evading the issues on corruption, mismanagement, and social and environmental destructions connected to the Bank’s funded projects.

He only gave them his usual rhetorical statements that ADB is preventing corruption, promoting transparency and people’s participation, and is really concerned in reducing poverty incidence in the Asia and Pacific Region.

ADB only consulted 37 unknown people for the Melamchi Project. NGOs and the local communities who are against the project were never consulted. Gopal Siwakoti Chintan of WAFED-Nepal said during a media briefing by the Forum. “The president did not respond to calls by local communities for better and cheaper alternatives to expensive projects,” he added. Civil society organisations are pointing out to ADB’s non-implementation of its Safeguard Policies resulting in displacement of communities and environmental destruction.

“The Safeguard Policies should not be made just flexible but mandatory. Lest, it would have great negative impact on poor communities,” said Mishka Zaman of Bank Information Center.

Bruce Rich of the Environmental Defense Fund-USA also said that there is a wide disconnect between the minds of the management of ADB and the affected communities.

“Project after project, ADB does not address the concerns in the ground. The president keeps on saying that ADB will address the concerns of the local communities. But no actions have been made until now,” he was quoted in the Forum statement as saying.

On debt cancellation, the Bank remained silent. The G-8 already agreed last year to cancel the debt of 18 countries, mostly from Africa.
“The World Bank-IMF and the African Development Bank as well followed suit and cancelled the multilateral debt of these countries. However, ADB has remained silent on the issue,” said Princess Nemenzo.

Hyderabad, India – Protestors took to the streets last week as the Asian Development Bank held its annual meeting on expanding free trade in a region which is home to two-thirds of the world's poor.

More than 1,000 people beating drums and carrying banners rallied against the lending policies of the ADB and the World Bank which they branded as anti-poor, witnesses said.

Several hundred protestors had already demonstrated during the early morning in this southern Indian city to protest the “anti-people policies” of the multilateral agency.

Wearing black headbands, brown and green jackets proclaiming “Destroy ADB” and “Go back ADB”, the demonstrators, including women and children, shouted slogans against the Manila-based lender.

“ADB hands off our water, our health, our forests, our livelihood and our environment,” a huge banner read.

“These agencies are undemocratic and push their own agenda without listening to our voices,” said Murad Hussian, head of a 70-member group from India’s eastern state of West Bengal.

The People’s Forum Against ADB, an umbrella group of more than 70 non-governmental organisations, also kicked off a “parallel session” in Hyderabad to highlight the plight of people displaced by ADB projects, what it claims to be the lack of accountability of the ADB and other social issues.

“The ADB, like the World Bank, has become the custodian of private investment and the promoter and protector of corporate interests and profits,” said Gururaja Budhya, a People’s Forum spokesman.

“The projects of the ADB continue to displace hundreds of thousands of people across the region with little or no compensation,” he said. “The ADB creates development refugees and manufactures poverty.” On Friday, the People's Forum was planning a rally in Hyderabad and more than 7,000 people were expected to attend.

More than 3,000 delegates including finance ministers, business leaders and representatives from global organisations are attending the ADB’s 39th annual meeting to focus on Asian development challenges.

ADB President Haruhiko Kuroda said the major challenge was to bridge the widening gap between rich and poor and to ensure that the poor benefit from economic growth even as the lender plans to double its funding for India to $2.65 billion by 2008 to help expand necessary access to basic services.

“Broad-based growth can only be achieved if people have basic access to clean water and sanitation, and if the poor are provided with education and training to get jobs,” Kuroda said.

The ADB is also expected to finalise a new medium-term strategy for Asia at the annual meeting.
“I expect the strategy will confirm ADB’s fundamental goal of poverty alleviation and intensify our focus on a few key areas as well as regional cooperation and integration," Kuroda said.

He said record-high oil prices will soften as they are unsustainable.
The statements came as oil prices headed back toward an all-time high of $75.35 (Rs 7,750) a barrel hit on April 21 amid ongoing concerns over Iran's nuclear ambitions.
“At $75 per barrel, it’s unsustainable. Some geopolitical events may destabilise the market. But apart from that, the current level is very high,” Kuroda said.

The formal sessions of the ADB meeting ran from May 5 to 6 with various meetings taking place in the run up to the official opening.

High oil prices could weaken Asia’s strong economic growth, the president of the Asian Development Bank warned last week, adding that producer and consumer nations should work together to lower prices.

Asia’s economy grew by 7.4 percent last year, and is expected to expand another 7.2 percent this year. But “if the high level of oil prices continue, it will affect the growth outlook of the Asia-Pacific region,”' ADB President Haruhiko Kuroda told reporters.

He was speaking on the first day of the bank’s annual meeting, this year being held in Hyderabad, a key information technology centre in one of the region’s economic powerhouses.

”The oil producers and consumers should sit together and find a sustainable price level,” Kuroda said.

Rising oil prices, these days hovering above the $70 (Rs 7,200) mark, are expected to be discussed at the conference, which ends Saturday, along with talks on key trends in the international economy – from information technology to labor – and their implications for Asia.

Iran’s deputy oil minister, M. H. Nejad Hosseinian, said last week in India’s capital, New Delhi, that the price of a barrel of oil could hit the $100 mark this coming winter as demand outpaces supply.
”Oil supply in the short term cannot be increased,” he told reporters.

Kuroda said the best way for emerging Asian economies to tackle high oil prices is to raise their energy efficiency. He added the ADB is willing to help.
”We have financed many energy efficiency projects in the past, but annually the amount isn’t so big, so we intend to multiply our efforts,” he said.

Kuroda said the ADB would provide loans worth $1 billion to member-countries to undertake clean energy projects in the coming years. The new loans would be disbursed by 2008, he said.

“Because of a rapid economic growth in Asia, the region has been suffering from environmental degradation. We have to protect the environment,” he said.

New Delhi, India – At least half a billion people in developing Asia are unemployed or underemployed and finding ways to provide them productive jobs should top economic agendas around the region, according to Labor Markets in Asia: Issues and Perspectives, an ADB book launched last week.

Asia has made significant progress in reducing poverty over the last two decades, but almost 1.9 billion Asians still survive on less than $2 a day. There are many causes of poverty, but in the final analysis poverty exists because people are either unable to find work or earn too little from the work they do, according to the book.
Out of a total labour force of around 1.7 billion, at least 500 million people in the region are unemployed or underemployed on conservative estimates, the book notes, and some 245 million people are expected to join Asia’s labor market over the next decade.

Keeping the workforce employed, and finding new jobs, will forge Asia’s future growth.

Keeping the workforce employed, and finding new jobs, will forge Asia’s future growth.

“The outlines of an Asian employment crisis are already taking shape,” says ADB Chief Economist Ifzal Ali. “Strong economic growth alone will not solve the problem. Even in countries that have achieved relatively high growth rates of output, employment growth has been disappointing. Governments must focus on achieving full, productive, and decent employment for their people if their economies are to provide equitable growth and development.”

The challenge of generating jobs in many countries is particularly acute in the formal sector where employment entails higher earnings, a degree of job security, and social benefits. The share of formal employment in many Asian countries has declined or stagnated in recent years despite economic growth.

There are two dimensions to this phenomenon. First, agricultural employment, which tends to be overwhelmingly informal, has been slow to decline as a share of total employment in a number of countries, especially in South Asia. In India, for example, agriculture continues to account for a majority of total employment in the country.

Second, many new jobs being generated outside of agriculture are also in the informal sector. The book notes that this is a break from the past when economic growth and expansion of employment in the formal sector went together.

The book discusses the key elements of an overall policy package to address Asia’s employment challenge and points out that while labour laws could be improved in some cases, they are not the main drag on job creation. More flexible labour laws alone would not spark a surge in new jobs. Among the key issues a successful policy package would address are:
• The need to increase public investments in rural infrastructure and the provision of agriculture extension services to raise productivity in agriculture. Increased productivity on the farm would bring benefits for the non-farm rural economy. Increased incomes from improved farm productivity would also raise demand for non-farm outputs; and
• The need for significant increases in the demand for labour in the formal sector. The key to encouraging job growth in the formal sector will come from policies that promote diversification of production activities into new areas, especially labour intensive areas; that facilitate restructuring of existing activities; and that foster coordination between public and private entities.

“The potential of developing Asian economies is widely recognised,” says Mr. Ali. “But unless Asian governments make job creation a central national objective backed by time-bound, feasible, credible, and measurable policies, the region may well remain plagued by huge unemployment, underemployment, and poverty – and all the challenges they create.”