ADB forecasts 5% growth in SE Asia region for 2003

ADB forecasts 5% growth in SE Asia region for 2003

Teresa Cerajono, Associated Press, Manila

The Asian Development Bank said Monday it expects the region's
developing economies to grow around 5 percent this year, with the
SARS outbreak likely to have only a moderate economic impact.

ADB President Tadao Chino said Asia's robust performance,
compared with other regions, would be based on steady growth in
both domestic and export demand in most countries, as well as
supportive economic policies.

Chino said if governments continue to fight SARS, the economic
impact "is likely to be moderate, though differing from country
to country." Although the outbreak is receding, he warned the
region to remain vigilant to prevent it from recurring.

He said the economic outlook was highly dependent on global
economic movements and susceptible to disruptions in tourism,
trade, investment and other services.

Although growth is expected to remain strong, Chino cited the
challenges of poverty reduction, private sector development and
environmental sustainability.

"Behind the uncertainties, the underlying problems continue to
be deprivation, lack of opportunity, inadequate participation,
inequity and a sense of powerlessness - all being dimensions of
poverty," he said.

Chino also emphasized the need for strong financial support
from the bank's stakeholders, noting that demands to assist
poorer member countries exceed available funds. Bank donors are
meet in Copenhagen in October.

In May, the bank had to allocate US$200 million from its 2002
net income to the Asian Development Fund, the bank's lending arm,
to meet the growing demand for loans and grants, he said.

Ann Quon, a bank spokeswoman, said Chino's statements at an
annual meeting of the ADB's Board of Governors did not mean the
ADB has revised its earlier forecast of 5.3 percent growth for
the region's developing economies, which excludes Japan.

In April, the ADB cut its 2003 growth outlook to 5.3 percent
from the original 5.6 percent, due to severe acute respiratory
syndrome, a global economic slowdown and the Iraq war.

"The president just rounded off the figure. It is not a
revision," Quon said.

In her speech, Philippine President Gloria Macapagal Arroyo
called on the ADB to include on its agenda uplifting the region's
"poorest of the poor" and promoting greater trade between
developing countries and developed economies, which she said
continue to exercise protectionism.

She also asked the bank to encourage the flow of greater
private capital into developing countries, supplement debt
restructuring and provide cheaper financial aid, and support
institutional capacity-building to help poor countries still
hobbled by weak administration.

The one-day conference, originally scheduled for Istanbul in
May but moved apparently due to security concerns linked to the
war in Iraq, has been scaled down. Ambassadors and heads of
missions represented member countries instead of finance
ministers. Civil society groups, which attended past meetings,
were not invited.

Outside the ADB headquarters, about 500 protesters objected to
the privatization of public utilities, such as water, electricity
and sewage systems, saying it has led to higher prices for
consumers and less environmental protection.

The ADB representative to the Philippines, Richard Ondrik,
told reporters that privatization of utilities has been shown to
cut costs and ultimately benefit consumers, and that not enough
privatization has taken place in the country.