Development fund for Asia may run dry next year: ADB
Development fund for Asia may run dry next year: ADB
MANILA (AFP): A fund to help Asia's less developed nations will run dry, threatening efforts to fight poverty early next year unless it is replenished, Asian Development Bank (ADB) President Mitsuo Sato warns.
Obtaining money for the fast-dwindling Asian Development Fund (ADF) is expected to dominate discussions during the ADB board of governors' annual meeting in the Philippine capital from April 30 to May 2, Sato told AFP in an interview.
The fund's money comes mainly from wealthy industrialized states and is lent at zero interest with up to 40-year repayment terms to Asia's poverty-stricken countries.
But Sato says it has shrunk to only US$1.3 billion -- enough to last up to early 1997.
The ADF is refilled every three years. The current fund, called ADF Six, had a total of $4.2 billion and was originally earmarked for 1992 to 1995, although the appreciation of the yen has allowed it to last until end 1996.
"In terms of the agenda, I think many members will be discussing the things related to the replenishment of the concessional fund, or money going to the poorest of the poor, simply because we are going to run out of money quite soon," Sato said.
Finance ministers and Central Bank governors from the ADB's 56 member countries, including Japan and the United States, are to attend the 29th annual jamboree at the bank's headquarters here.
During last year's meeting held in Auckland, New Zealand, delegates from developing nations blamed U.S. reluctance to pay its arrears in ADF Six for the delay in restocking the fund.
Analysts said then that other Western donors were waiting to see what Washington's move would be.
Industrialized countries last year reminded developing nations that while they supported the ADF's continued operation, donor governments were themselves hard-pressed with budget deficits and were calling for a stricter accounting of how the money is spent.
They likewise challenged Asia's economic dragons -- Hong Kong, Singapore, South Korea and Taiwan -- to raise their contributions to the ADF, of which they were former recipients, arguing they have already become as wealthy as the industrialized countries.
Sato said in the interview Wednesday that the United States earlier this year paid $100 million in its ADF arrears, but that Washington still owed $337 million.
U.S. officials have cited difficulties in getting budget approval from a Republican-controlled congress for the delay in payment.
Discussions
Sato said that discussions during the annual meeting are expected to focus on the size of the new ADF for the next three years and the proportion of "burden-sharing" between Asia's dragon economies, also known as tigers, and western donors.
"One important aspect of the discussions is to encourage the so-called Asian tigers to contribute more to the ADF," said Sato, who expressed concern that Asia's poorest countries would suffer if the fund is not resupplied soon.
Although Asia has remained the world's economically fastest growing region, ADB has also admitted that it is still home to a majority of the planet's 800 million poor people, making poverty alleviation a major concern.
The ADB, founded in December 1966 to help in Asia's development 20 years after World War II, has 56 member nations -- 40 from the region and 16 from outside.
Japan and the United States, the biggest contributors, hold equal stakes although the Japanese have traditionally held the bank presidency.