ADB confident of building credible territorial defense

MANILA, Philippines - Any tension in Asia Pacific, including the territorial dispute in the Panatag (Scarborough) Shoal and the Spratlys, could affect economic development in the region, the head of the Asian Development Bank (ADB) said yesterday.

ADB president Haruhiko Kuroda told a press conference that the ADB and other multilateral institutions should step up efforts to reduce poverty in the region to minimize risks that could lead to the escalation of tension in the region.

“Conflict could affect economic development and regional cooperation in Asia and the Pacific. So as a non-political institution, we continue to provide technical and financial assistance to help these countries reduce poverty and indirectly reduce some sources of internal or inter-state conflict,” Kuroda said.

Cabinet officials and economists believed the escalating territorial dispute in the West Philippine Sea would put a dent on economic growth in the Philippines as a result of lower investments and higher interest rates.

Socioeconomic Planning secretary Cayetano Paderanga earlier told participants at the launching of the book “Role of Key Emerging Economies – ASEAN, the People’s Republic of China, and India” that the standoff between the Philippines and China would have an effect on investments and interest rates.

Paderanga said the uncertainties could result in lower investments and also push up interest rates.

Paderanga, director general of the National Economic and Development Authority (NEDA), is confident that the territorial dispute could be resolved peacefully.

“I am optimistic that this could be resolved. There is a spirit of cooperation in the region,” he said.

For his part, Chinese professor Yu Yongding also believes the tension between China and the Philippines could lead to slower economic growth.

“Yes, it does,” Yu replied when asked whether the territorial dispute would have a bearing on economic growth.

Kuroda said Asia now accounts for about 30 percent of the global output as domestic demand in the region continued to grow faster than external demand.

Key issues discussed during the 45th annual meeting of the ADB Board of Governors included what Asia must do to adapt to the global economic downturn, build resilience in urban centers, promote green growth, ensure regional food security, and grow trade between the region and Latin America.

Kuroda said ADB raised its Asian Development Fund by 9.5 percent to $12.4 billion to promote gender mainstreaming, good governance, food security, private sector development, and the formation of a Disaster Response Facility. – With Jaime Laude