ADB says high oil prices could hurt Asian growth
JEJU, South Korea (AP) - Despite rapid growth in recent years, Asian economies remain vulnerable to surging global oil prices, slackening regional financial reforms and a widening digital divide between the region's richest and poorest countries, the Asian Development Bank's president said Saturday.
Opening the Manila-based bank's annual meeting, Tadao Chino offered optimistic forecasts for the region's developing nations, which were expected to grow at a brisk 6.8 percent in 2004 and 6.7 percent in 2005.
But he said there is no shortage of risks.
 A huge screen shows ADB President Tadao Chino, right, delivering a speech at the opening of the 37th Asian Development Bank - Appic |
"These include geopolitical concerns, rising oil prices and imbalances in industrial economies. Other risks, such as slowing of financial and corporate reforms, relate more specifically to the region,'' Chino told the gathering, which includes finance ministers and central bankers from more than 60 nations.
Underscoring Chino's remarks, financial markets worldwide were hit this week by a spike in oil prices to 13-year highs and speculation that U.S. policymakers will raise interest rates soon.
Those topics, along with China's recent efforts to rein in its overheating economy and the potential dampening effect on regional growth, were expected to figure into discussions during the ADB's three-day meeting on South Korea's resort island of Jeju.
In recent years, the bank, which funnels billions of dollars a year in loans and technical economic assistance to the region, has served as a forum for top economic policymakers from Asia as well as Europe, the United States and Canada.
The bank has also led a push to lower Asia's dependence on international lenders such as the World Bank and counter the economic presence of the North American Free Trade Agreement and the European Union.
In 2000, for instance, countries agreed to a currency swap plan as a way to protect each other's currencies in times of crisis - and prevent a recurrence of the 1997-1998 Asian financial turmoil.
On Saturday, ministers from the Association of Southeast Asian Nations (ASEAN), Japan, China and South Korea met to work out a deal to integrate their bond markets before the end of the ADB's three-day meeting.
The plan - part of broader drive to pool foreign currency reserves and boost financial policy coordination and market monitoring - seeks to make money flow more freely between nations while setting standards for surveillance and defaults.
For Asia's developing nations, reducing poverty is a top priority.
Though the region includes economic giant Japan and emerging juggernaut China, about 720 million Asians _ nearly two-thirds of the world's poor - still live hand-to-mouth on less than US$1 a day, according to ADB statistics.
The ADB's Chino warned that unless nations double their efforts to raise the living standards of the poor, Asia will fail to meet the goal of halving poverty by 2015 set at the summit in Johannesburg, South Africa, two years ago.
Building roads and other infrastructure and closing the widening gap between poor nations and rich, technologically advanced countries will be key to meeting the goal, he said.
Chino expressed worries about a shortfall in an estimated US$250 billion a year needed for roads, which would boost commerce and speed the delivery of humanitarian supplies to far-flung areas.
More ambitious plans for Asia were also on ADB agenda.
Haruhiko Kuroda, Japan's special envoy, told officials Friday that Asia's shift toward greater regional integration brightens the prospects for a common Asian currency to rival the euro in the future.
But critics say the idea, which has been bandied about for more than a decade, would require a level of trade and monetary integration that Asia isn't ready for yet.
ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippine, Singapore, Thailand and Vietnam. - AP
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