NUSA DUA, May 4 – The Asian Development Bank (ADB) called Monday for a fundamental "rebalancing" of regional economies in response to the global crisis, while predicting a "mild recovery" next year.
Bank President Haruhiko Kuroda said the region would record only 3.4 percent growth this year but could expect a rebound to around 6.0 percent growth in 2010, as he opened the ADB\’s board of governors annual meeting in Bali.
"With strong national and regional efforts and a mild recovery expected in the global economy next year, developing Asia and the Pacific should bounce back to about 6.0 percent growth in 2010," he said.
"These are positive signs, therefore this should not be a time of despair."
He outlined a huge expansion in the ADB\’s lending plans to help stimulate developing economies across Asia, after shareholders agreed last week to triple the bank\’s capital base in response to the global downturn.
The bank will increase its overall lending assistance by more than 10 billion dollars in 2009 and 2010, including three billion to meet "urgent needs stemming from the crisis," Kuroda said.
Some of that new lending would aim to help Asian economies boost domestic consumption and adjust to plunging demand for their exports to markets such as Europe and the United States.
"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," he 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."
He also called for changes to the global financial architecture to give voice to the aspirations of Asia, where powerhouses like China and India are emerging as rivals to US dominance of the world economy.
Ten Asian countries plus China, Japan and South Korea agreed Sunday to set up a 120-billion-dollar regional emergency fund to help Asian economies out of crises, a move Kuroda applauded.
"It is… important to create a financial architecture that gives developing countries a voice more commensurate with their share of world output and trade," he said.
His comments echoed China\’s calls for a greater say in international economic decision-making at institutions such as the International Monetary Fund.