THE ASIAN DEVELOPMENT BANK TWENTY-NINTH ANNUAL MEETING, Philippines, 1 May, 1996
I would like to thank our host, the Philippine Government, for its generous hospitality towards delegates at this meeting. Mr. President, I look forward to your continuing leadership and commitment to manage the Bank effectively.
The management of the Bank should also be commended for the implementation of the Bank Strategic Framework which has enabled the institution to be more proactive and innovative in planning its activities. Some of these activities, particularly investment in economic sectors, are instrumental in enhancing growth in developing member countries. As a result there is greater demand on the Bank's resources, hence the need to increase the institution's funds. For this reason, the effort of the President and Management to complete the Fourth General Capital Increase is commendable. We urge member countries to meet their obligations in fulfilling the terms of the General Capital Increase to ensure that the bank continues to function efficiently.
The ADB has played a major role in enhancing growth in developing countries. However we noted that while private capital flows into the more advanced member countries have been encouraging, the inflow of private funds to the less developed members is only marginal. This situation must be remedied. Thus the Bank should devise appropriate strategies to attract the flow of private capital to the less-developed countries.
The effectiveness of the ADB is contingent upon its resources. The membership of the Bank as well as the number of countries eligible for the soft loan window continue to grow. Unless something is done, the resources under the Asian Development Fund (ADF) VI will be depleted by the end of the year.
We support the ADF, which is specially designed to meet the funding needs of the Bank's poorer members, especially those in Category A. Successful Asian countries should respond positively to the call by the Bank increase the number of donors. Asian economies must be seen to shoulder additional responsibilities in the activities of multilateral institutions such as the ADB. Successful Asian economies carry a certain measure of moral responsibility to assist our less fortunate members. By so doing, they would also foster the growth of new patterns of relationship between the rich and poorer countries. Multilateral institutions such as the ADB should also be more appreciative of the social and economic complexities of developing countries that embark on gradual reforms.
Reforms and stabilization measures are necessary for sustainable growth. But imposing uniform measures on every country by ignoring their level of development and the social costs involved in the reform process would be tantamount to a form of punishment on the borrowers. In this regard, donors should not use their contributions as a means to dictate terms and conditionalities that aggravate rather than alleviate the difficulties of poor countries. If we genuinely believe that economic growth will help these countries remedy a host of their difficulties, then we must assist them in meeting the pre-requisite for growth, which is increased capital flows.
There must also be a greater degree of pragmatism on the part of the bank in determining the criteria for project financing rather than narrow profitability. We must also be sensitive to the growing criticism against bureaucratic rigidity that impedes the effectiveness of the Bank. We must strive for efficiency and accountability and as an institution with a social conscience, we must emphatise with the needs and predicament of our poorer members. Be that as it may, we would like to express our appreciation for the efforts of the management and the staff of the Bank for being able to finance quality projects to the satisfaction of borrowers.
We would like to take this opportunity to welcome Uzbekistan as a member of the Bank. And consistent with the philosophy of the institution, we urge our fellow governments to consider accepting Iran as a member.
Regional cooperation and joint development has been a strategy in promoting and dispersing growth in the recent years. Thus we are happy to note that ADB has been actively identifying projects in the BIMP-East Asian Growth Area involving the countries of Brunei, Indonesia, Malaysia and the Philippines. We acknowledge, too, the contribution of ADB in growth triangles involving Malaysia, Indonesia and Thailand and that of Malaysia, Singapore and Indonesia. In similar vein we also commend the role of the ADB in the development of the Greater Mekong Subregion. We believe that such development initiatives can further promote the integration of the region.