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The two-day Asian Development Bank’s (ADB) 42nd annual general
meeting ended yesterday happily impressed by the latest signs of
global economic and financial recovery. Signs show that China, in
particular, appears to have definitely begun its recovery from the
global meltdown and that the whole world is going to recover, albeit
mildly, next year.
To the Asian countries, ADB will surely be a
major factor in propelling the recovery. Last week, the ADB’s
governors agreed to triple the 42-year-old bank’s capital base to
US$165 billion.
ADB President Haruhiko Kuroda said that that
decision was a “resounding vote of confidence from the
shareholders.”
These shareholders are ADB’s 67 member
economies (countries and territories, including the Philippines,
where ADB, thanks to the Japanese initiators, was founded and has
its headquarters). The biggest donor-shareholders are Japan and the
United States.
Call for greater transparency
ADB shareholders, while disagreeing with the
stand of social-reform and anti-poverty activists who question the
bank’s pro-capitalist policies, seemed to be at one with them in
demanding greater openness and transparency from the decision-makers
of the bank.
Expectedly, the more militant non-government
organizations (NGOs) held a people’s tribunal in Bali, where the
ADB general meeting was held, and found the lender guilty of
promoting inequality and injustice, including forced displacement of
communities and environmental destruction in loan-recipient
countries.
The group of 250 NGOs called NGO Forum on the
ADB, which is critical of the way the bank does business, attacked
the capital increase as a source of greater hazards for poor people
and the environment.
The Filipino activist and intellectual Red
Constantino said, “The bank is proposing a blinkered,
business-as-usual program that will not prevent developing countries
from sliding back into poverty but instead is likely to cause
environmental destruction and social dislocation.” Other activists
slammed ADB plans to partner with private equity funds to advance
private sector activity without proper oversight mechanisms. They
berated ADB’s and governments’ cynical use of “the current
crisis to re-promote discredited large-scale infrastructure-biased
development” destructive of the environment and minority
communities.
These assessments, though made in more polite
language, were also made by some of ADB’s shareholders.
Austria’s representative, Marcus Heinz, lauded the decision to
enlarge the capitalization of the banks but warned that “ADB can
achieve its goal of poverty reduction through inclusive and
sustainable growth only if funds are managed effectively and
responsibly.” He was not criticizing the ADB’s management of
funds, which has never been in question. He was speaking, without
naming names but one fears the Philippines might be among the
countries alluded to, about loan-awarded countries the diligence and
honesty of whose government officials and project managers may be
questionable.
China’s Finance minister was more direct. He
could see ADB’s success in the mission of eradicating poverty in
the societies of developing-country members only if ADB first
promoted “its own development through internal reform.”
Several of the banks governors, such as the
Australian chief delegate, raised issues about the bank’s policies
regarding accountability, employment biases, the monitoring of ADB-funded
projects and geographical representation.
Huge expansion of lending activities
Agence France-Presse reported that Kuroda
outlined a huge expansion in the ADB’s lending plans after
shareholders agreed to triple the bank’s capital base in response
to the global downturn.
The bank’s loans to Asia’s poorest countries
will increase by more than US$10 billion this year and in 2010. US$3
billion will be immediately released so these countries’ can meet
their “urgent needs stemming from the crisis,” Kuroda said.
These urgent needs, such as those of the Philippines, include funds
to plug the holes caused by reduced exports to Japan, Europe and the
US whose demand for our products has severely declined.
Call to ‘rebalance’ export-driven growth
“The transfer of savings from one part of the
world to another worked well when advanced economies could absorb
production from developing economies, but the current state of the
global economy suggests that era has passed,” Kuroda said.
“By rebalancing export-driven growth with a
greater reliance on domestic demand and consumption, Asia can lead
the way in charting a new, globally beneficial development
course.”
The Philippines’ economic managers have in
fact been doing exactly this. The stimulus packages announced by the
Arroyo administration are—if the intentions are turned into
reality and corruption does not eat up the funds allocated for
them—going to pump money to families. Most Filipino families will
have less money otherwise. OFW breadwinners are sending them less
money or have in fact lost their jobs abroad and are now back home
looking for jobs for less pay. And some of the domestically based
breadwinners have also lost their jobs or are earning less because
their workplaces have closed down or downsized.
Urgent meaning of ‘rebalancing’ for
Filipinos
There is another and urgent meaning of
“rebalancing” for us Filipinos.
This is to use this crisis as our opportunity to
rebuild our much damaged self-sufficiency in food production. Our
agricultural productivity and agri-business capabilities have been
allowed to deteriorate by our political and economic leaders. They
were seduced by the last decades’ call for globalization, which
they interpreted as total surrender of our markets and productive
capabilities to the world market.
Also we must to turn the crisis to rebuild our
now almost nonexistent basic industries which have been damaged by
lawful imports as well as rampant smuggling.
But there will be a problem. How not to be denied ADB’s and
the other world lenders’ funding assistance—because we will be
accused of having become protectionist when we start making
ourselves self-reliant—is a challenge to our present leaders and
those who will come after the 2010 elections must face.
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