ADB president Haruhiko Kuroda is confident he can defend his regional economic cooperation and integration agenda before ADB governors at the annual meeting, he told Emerging Markets yesterday. He rejected criticisms that this could deflect the ADB from its mission of poverty reduction and said regional integration initiatives elsewhere have shown unmistakably that growth accelerates and income disparities are reduced as a result".
Some ADB executive directors from Europe and elsewhere have challenged the bankÕs new mid-term strategy, in which the need for the ADB to help foster regional economic cooperation is stressed. Their views are expected to be reflected in policy speeches that finance ministers and other governors deliver at the meeting, a senior bank source said yesterday.The mid-term strategy, which sets a course for the ADB over the next three years, will be approved after the annual meeting Kuroda said yesterday during a press briefing. The final version is likely to reflect views expressed in Hyderabad, other bank sources said. The ADB president meanwhile acknowledged to Emerging Markets that Òregional economic cooperation and integration does not make much sense by itself.Ó It is Òone of five pillarsÓ that will guide the bank under his direction, he said, adding that the ADB must focus on Òinclusive development, pro-poor sustainable growth, governance issues and environmentally sustainable growth. But he remained defiant in defence of the need for regional integration, which some have claimed is a ÒJapanese agendaÓ that the former senior Japanese finance ministry official is pursuing through the ADB. ÒIt is true that growth can be achieved even without closer economic cooperation and integration but I am quite sure that Asia can grow faster and reduce income inequalities fasterÓ by becoming more closely integrated, he said. ÒIntegration is also good for overall poverty reduction.Ó Kuroda appeared defensive too about controversy generated by the ADBÕs plan to construct an index of regional exchange rates know as the Asian Currency Unit or ACU. The plan has drawn fire from the United States and elsewhere as being a possible first move toward an Asian common currency of the type that Kuroda has said Asia must one day have to match its growing trade and investment integration. ÒI have said from the start that this is only an indicatorÓ and not a unit of account, he told EM. ÒAs such, it can make a useful contribution and we are still consulting with governments and others,Ó he said. Kuroda declined comment on moves expected today by the ASEAN+3 finance ministers in effect to take over the ACU initiative, saying only that the ADB could Òwork alongsideÓ the ASEAN+3 and others on the project. He described the economic background against which ADB governors are meeting this year as Ògenerally benignÓ, apart from possible risks posed by high oil prices and global financial imbalances. This will leave ministers free to focus in Hyderabad on longer-term development issues such as the need for poverty reduction, he added.