Asian Development Bank Says Reforms Needed to Cope With Fast-Changing Region

The president of the Asian Development Bank says the organization must adapt to stay relevant in fast-moving Asia. He also called for a greater role in developing the region's infrastructure.

President Haruhiko Kuroda says economic development has changed the face of Asia in recent decades. In just the past 15 years, he estimates, 200 million people in the region have broken out of poverty. However, much more needs to be done.

"In Asia and the Pacific, almost 700 million people, two thirds of the world's desperately poor, still struggle on less than one dollar a day," he explained.

President Kuroda says in the past four decades the Asian Development Bank has invested $113 billion in the region. However, its lending levels have been stagnant and its operations sometimes too broad in scope.

In a speech Wednesday at the opening of the ADB's annual conference in Istanbul, he said the organization must scale up its financial assistance and go for more selective operations. He mentioned investment in water supply, health care, and improving women's lives.

Mr. Kuroda also says the bank must take a larger role in developing Asia's infrastructure, and he spoke of a deeper partnership with the Association of Southeast Asian Nations.

The bank's president said the ADB this year will issue bonds denominated in Thai baht, the Philippine peso and the Chinese yuan. In addition, the bank will soon test new financial instruments, including local currency financing.

The non-profit institution, which is based in Manila, lends to dozens of countries spread from Fiji in the South Pacific to Sri Lanka in the Indian Ocean. Its 63 members also include such nations such as the United States, Germany and Australia.

During the conference this week, about three thousand delegates are expected to discuss issues ranging from ADB reforms to aid for rebuilding areas hit by last December's tsunami.

The day before the ADB meeting began, the finance ministers of China, Japan and South Korea agreed to strengthen Asia's defenses against attacks on regional currencies through the so-called Chiang Mai Initiative. The initiative involves a $39 billion network through which Asian nations can borrow currency from others in the group to cover short-term needs during market turmoil.

China, Japan, and South Korea are the world's largest holders of foreign exchange reserves. The three also agreed to push for greater representation in international financial institutions, such as the International Monetary Fund.