Signs of a regional rift between the governors of the ADB appeared yesterday over what course the bank should take. The divergence between regional and non-regional members of the bank became quickly apparent as governors from the bank’s 65 member states came together to deliver their verdict on the first 18 months of president Haruhiko Kuroda’s stewardship.
US and European members attacked the direction the Manila-based institution is moving under president Haruhiko Kuroda while China, India and Japan stepped up to endorse the bank chief’s controversial vision.
The disagreement centred on the new strategy blueprint that Kuroda and his aides have drawn up for the coming three years and which stresses the need for the bank to play a more proactive role in promoting regional economic cooperation and integration.
Kuroda defended the ADB’s new direction: “Regional cooperation and integration is an idea whose time as come,” he insisted. “Imagine an Asia-wide economic community,” he said, a community of nations where borders are fully open to trade and investment [and} that offers competitive, complementary markets for the benefit of all its members as well as the rest of the world. If we can envision this, I know we can achieve it.”
But others seemed unimpressed by the vision “Regional economic integration is certainly a key part of Asian growth,” said US temporary alternate governor Kenneth Peel. But the ADB’s new emphasis on “the study of potential regional currencies” and on regional economic surveillance must not be allowed “to divert scarce human and financial resources from the ADB’s core mission of poverty reduction,” he insisted.
The theme was taken up by France’s temporary alternate governor Ramon Fernandez who charged that the link between the ADB’s medium-term strategy plan “and the goal of poverty reduction was too tenuous.”
Germany’s governor, Karin Kortmann, was more blunt. “We need a clear decision on the ADB’s course,” she said. We feel that such a decision is still missing in the new strategy documents.”
China’s governor Jin Renqing, sprang to Kuroda’s defence. He praised what he called the “achievements of the ADB in the past year.” The ADB, said Jin, “should further regional cooperation, a mission that is enshrined in its charter. Regional cooperation is full of potential. It is our hope that the ADB will continue to play a role of facilitator and financier, so as to promote deeper regional cooperation.”
Indian prime minister Manmohan Singh also offered compliments. “While being a regional bank, the ADB has acquired a global relevance, because of Asia’s rising global profile,” he said. Singh called for an increase the “quantum” of ADB funding to enable it to meet massive infrastructure and other needs of the region, and for a speeding up of the way in which aid is chanelled.
Korea’s governor, finance minister Han Duck Soo, insisted that “it is crucial for the ADB to emerge as an agency that reflects the unique characteristics of the Asia region, while pursuing harmonisation with other multilateral development banks.” Under Kuroda, the ADB has become a “more accountable institution” because the president has “sent messages on what the bank should do,” added Japan’s governor, finance minister Sadakazu Tanigaki.