ADB to set up $3 bn emergency fund to fight downturn

May 2nd, 2009 - 3:30 pm ICT by IANS  

Bali, May 2 (DPA) The Asian Development Bank (ADB) plans to set up a $3-billion fund to help developing member countries cope with the global economic crisis, its president, Haruhiko Kuroda, said Saturday.
The fund would provide emergency loans faster and cheaper than under the bank’s existing programmes, Kuroda said.

“I believe it will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impacts of the crisis,” Kuroda said at a news conference ahead of the bank’s annual meeting on the Indonesian resort island of Bali.

The fund, subject to approval by the bank’s board of governors at their meeting in Bali Monday and Tuesday, would help increase total loan disbursements by the bank by $10 billion to $32 billion over the next two years, Kuroda said.

The bank 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.

The International Labour Organisation estimated that 20 million would lose their jobs in Asia.

On Thursday, the bank’s board of governors agreed to triple the bank’s capital base from $55 billion to $165 billion to enable it to boost support for countries affected by the global downturn.

But a pressure group, the NGO Forum, called the move “irresponsible and dangerous”. It said poor communities in the region had experienced forced displacement and environmental damage caused by the bank’s projects.

“If not managed well, a 200-percent general capital increase could easily translate into a more than 200-percent increase in social and environmental harm,” said Red Constantino, the forum’s executive director.

Kuroda said the bank had made the utmost efforts to make its projects environmentally friendly.

“We have an appropriate accountability mechanism regarding environmental issues,” he said. “ADB has learned a lot from past experiences, and we have made substantial progress.”

While the Bali meeting is to focus on the global economic crisis, it would also discuss the outbreak of swine flu and its impact on the region.

Kuroda said the outbreak of the H1N1 flu strain was expected to severely affect the tourism and aviation sectors.

“At this moment, it’s very uncertain what kind of impact will be felt in the region and what kind of assistance will be needed,” he said.

On the sidelines of the Bali meeting, ministers from the 10-member Association of South-East Asian Nations and their counterparts from Japan, South Korea and China were expected to announce progress on talks on creating a network of bilateral currency swap arrangements among the countries.

The group had agreed to increase the fund pool’s size to $120 billion from $80 billion during earlier talks.

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