MANILA, Philippines - The Asian Development Bank (ADB) is making $12.4 billion available for poor countries through a special drawing rights (SDR) facility.
ADB president Haruhiko Kuroda yesterday said the multilateral institution’s securing of SDR is its “answer to the growing difficulties of including the millions of poor worldwide.”
The SDR will be included in the institution’s Asian Development Fund (ADF) to cover operations from 2013 to 2016.
“ADF borrowers face significant development challenges, and have fewer resources of their own to address them. We particularly appreciate the strong support and generosity of our donor countries in view of the difficult challenges many are facing at home themselves,” Kuroda said.
The ADF is intended to help improve the lives of millions of Asia’s poorest through environmentally sustainable growth, including improved access to education, social safety nets and the development of clean and renewable energy.
The fund is also intended to narrow the development gap and income inequality, as well as help vulnerable countries cope with shocks such as rising food and fuel prices, natural disasters and conflict.
It will also be used to promote “gender mainstreaming,” good governance, food security, private sector development, and stronger regional cooperation.
Special attention will be given to countries affected by conflict and to smaller island states with fragile economies.
Donors have also agreed to establish a Disaster Response Facility under ADF on a pilot basis to support the poorest countries in responding to natural disasters.
The ADF is also a critical source of financing infrastructure improvements.
In the next four years, the fund will be used for upgrading almost 16,000 kilometers of roads.
This, in effect, is likely to open up new economic opportunities as well as better access to social services for over 20 million people.
More than 2.5 million students will benefit from school improvement programs or other direct support for the education sector.
In addition, 340,000 households will have access to electricity, 560,000 to potable water, and 440,000 to adequate sanitation facilities.
In a press briefing yesterday, Kuroda also bared a positive growth outlook for Asia.
“Our outlook is that developing Asia will grow by 6.9 percent this year, and 7.3 percent in 2013,” Kuroda said at the briefing on the sidelines of the 45th annual meeting of the ADB Board of Governors.
He said despite the positive outlook, the region faces challenges, including inequality within nations and between different nations.
Studies conducted by various multilateral development agencies show that despite successes in poverty reduction, nations including the fast growing ones continue to lose large numbers of children to illnesses, and thousands of mothers die while giving birth.
Technological advancements including the rise of business process outsourcing and social networking have ironically reduced employment options for the Asian poor.
Moreover, the lack of labor-intensive manufacturing activities has excluded the poor from the region’s positive growth.