Stick to role regional bankers told

HYDERABAD - With the rich-poor gap widening and nearly 2 billion poor in the region, the Asian Development Bank's core mission to reduce poverty still has a long way to go and its members say that should remain its focus.

Winding up its annual meeting at the weekend, ADB president Haruhiko Kuroda said Asia looked poised to continue on its fast track of economic growth but work was needed to attract more investment and build up infrastructure, health and education.

"We all agree more must be done to include the poor in the region's plans for growth," he said.

China's Finance Minister Jin Renqing went further: "ADB still has a long way to go in promoting sustained and stable regional development and eliminating poverty."

Founded in 1966 with a mandate to elevate hundreds of millions of Asians from poverty, the ADB's 65 members range from struggling Nepal and Bangladesh to booming China and India to its largest and most powerful donors, Japan and the United States.

The challenges of global imbalances, economic integration, high oil prices, protectionism and Asia's infrastructure needs have been high on the four-day agenda for the 2500 delegates in the Indian city of Hyderabad.

But after the Group of Seven rich nations endorsed a broader economic surveillance mandate for the International Monetary Fund in April, the role of the ADB has come in for questioning.

Kuroda said members supported the strategic priorities of catalysing investment, promoting regional integration, improving governance and preventing corruption.

China urged the bank to mobilise more funds for development, increase its assistance to Asia's poor countries and enhance its role as a co-ordinator for deeper co-operation.

The ADB has been studying the concept of regional currency units, an idea which was taken up by finance ministers for 10 Southeast Asian nations and Japan, China and South Korea.

Japan's Finance Minister Sadakazu Tanigaki said it was natural for the bank to be interested in currency and financial co-operation as a way to reduce the burden on the poor, especially during financial crisis.

But he added: "It is essential for the ADB to have a thorough discussion with member countries to decide on what its involvement should be in pursuing each area of regional co-operation." The US was less keen on the ADB looking at currencies.

"I do worry about mission creep in this institution, and that they ought to stick to their knitting. It's a development institution, the IMF can help think through some of the monetary issues," the US Treasury undersecretary for international affairs, Tim Adams, said.

"I understand where the president would like to head. I think it may be a little bit out of the lane of this institution."

The ADB is criticised for being too bureaucratic, too consensus-driven and too slow to react, but Kuroda, the former Japanese vice finance minister, pledged a new spirit of transparency and responsiveness when he became president in February last year.

The US said in its address to the meeting that the bank still needed to become more transparent and responsive. "The ADB cannot be all things to all countries and all sectors. Selectively targeting ADB's resources to its comparative advantage will help the bank fulfil its core mission and maintain its relevance in the region."

- REUTERS