13 September 2007

Opening Address to The Asian Development Fund X Meeting



Key Points

Importance of the replenishment meetings: the meetings this week serve as an opportunity to focus on the challenges facing the region’s low-income countries, especially those in the Pacific.

Role of the ADF: The ADF has provided significant grant and loan assistance to low-income countries in Asia and the Pacific since its inception in 1973; however, focus must also be placed on the effectiveness (delivery and implementation) of such measures.


Good morning.

President Kuroda, Asian Development Fund Replenishment Chairman, Dr Peter McCawley, my colleagues from the Pacific, senior Bank management and staff and government officials.

It is very my great honour to welcome you to Sydney, on behalf of the Australian Government, for the first Asian Development Fund Ten replenishment meeting.

Australia is a strong supporter of the Asian Development Fund, and the Asian Development Bank more generally, and therefore it is a pleasure to make the opening address for the commencement of these meetings.


Last week, Sydney hosted the APEC leaders meeting, which brought a global focus to the region’s collective growth and prosperity and reflected the importance of cooperation, trade and investment in the Asia-Pacific region.

This week’s ADF replenishment meetings are an opportunity for you to focus on the challenges facing the region’s low‑income countries.

As a region, the Asia-Pacific continues to experience robust growth contributing to significant reductions in poverty.

Since the inception of the Asian Development Fund in 1973, Malaysia, Singapore, the Republic of Korea, Thailand, Kazakhstan and the Philippines have all graduated from ADF assistance, signifying considerable improvements in per capita incomes in these countries.

Alongside this growth, however, significant poverty still exists in the region.

The oft quoted statistics are that Asia-Pacific is home to around two-thirds of the World’s Poor – 1.9 billion people living below the international poverty line of $2 a day.

The focus of these meetings is how we all can best help those living below this poverty line in ADF-eligible countries.

There are widening disparities within the region, in relation to both economic and social indicators.  This is creating sub-regions within the Asia-Pacific that, if not provided with the necessary support, will be left behind.

Sustaining regional economic growth will continue to be of paramount importance to further reduce poverty levels in the region and we must ensure the benefits from growth itself are captured and contribute to further reductions in regional poverty.

At the same time, external support from donors and institutions such as the ADB will continue to play a key role in supporting – and in some cases, catalysing – sustained growth and development across the region.


A key reason for holding the Fund meeting in Australia is to highlight the development challenges facing the Pacific, an important Bank client group.

Economic growth in the Pacific over the last five years has been approximately 2 per cent per annum.

This compares with approximately 8 per cent per annum in East Asia and South Asia; 10 per cent in Central Asia; and approximately 4 per cent in South-East Asia.

While some countries have performed better than others in the Pacific more recently - overall the Pacific region is not achieving its growth potential and, in some countries, this has translated into declines in per capita GDP. 

Large differences between the Pacific and Asia also exist in key social indicators such as health and education outcomes.

A recent United Nations Report on the Millennium Development Goals shows that - while progress has been made against most of the MDGs in all regions - including Oceania - Oceania has the lowest proportion of enrolment in primary education in the Asia-Pacific; child mortality rates are high relative to other parts of the region; vaccination rates are at the lowest in the region; and Oceania suffers the highest rate of Tuberculosis in the Asia-Pacific.

I have had the opportunity to travel into the Pacific and discuss the challenges directly with Pacific Finance Ministers.  A clear message is the importance that they place on assistance from both donors and institutions such as the Asian Development Bank, where the combination of knowledge, experience and financing provides a strong platform for supporting national development priorities.

I understand that there will be a discussion tomorrow with representatives from Pacific Developing Member Countries to highlight some of the challenges and opportunities for the ADB’s work in the Pacific.

Role of the ADF

I’d now like to say a few words about the value of the ADF and touch on some of the topics that you’ll be discussing over the next two days.

Since its inception, the Asian Development Fund has provided over US$23 billion in grant and loan assistance to low-income countries in Asia and the Pacific, with around 20 per cent of this being disbursed over the last four years.

Contributions by donors have comprised around two‑thirds of total funds.  In the last replenishment donors agreed to provide US$3.4 billion.  Further contributions, combined with reflows and transfers of internal Bank resources, will be needed again for this ninth replenishment to further strengthen the ADB’s work in these important low-income countries.

However increased financing is only one side of the coin. It is also essential, indeed imperative, that the ADF continues to improve its effectiveness.

Like other donors, Australia is significantly scaling up its aid programme – with an Aid White Paper informing Australia’s goal to double aid by 2010. 

To meet this commitment, Australia will increasingly look to partner with institutions who demonstrate a commitment to assisting the poorest and most disadvantaged and those that can deliver aid effectively.

Not only do donor governments need to justify their aid expenditure to their taxpayers by ensuring effective delivery of assistance, more importantly we have a moral duty to the region’s poor — to provide the best assistance possible for a given amount of funds.

Therefore, it is appropriate that the three themes for this replenishment are deeply tied to effectiveness.

I note that today’s agenda will include a discussion of the ADF’s role and priorities. Of course, there is a direct link between these discussions and the ADB’s Long‑Term Strategic Framework review that is currently underway.

I had the honour of representing Australia at the Bank’s Annual Meetings in Kyoto this year where I called on the Bank to focus its activities on measures to assist the poorest and most disadvantaged in the region, including those who are most in need of external support.

Serving the needs of a diverse membership will be difficult but it is not impossible.  Disengagement from helping the poorest is not in our view, an option.

Appropriate funding allocation mechanisms are also important, which take into account performance and a country’s capacity to repay debt.

I congratulate you for the recent changes in this regard, particularly increasing the ADF’s flexibility to provide grants rather than loans to ensure that countries do not accumulate unsustainable debts through ADF borrowing.

Australia also supports the ADF’s participation in the Heavily Indebted Poor Country initiative, which would see Asia‑Pacific countries afforded equal treatment to heavily indebted countries in Africa and South America. 

But the key is delivery and implementation. Continued improvements in the operational effectiveness of the Bank are needed.

The Bank embarked on internal reforms following the last ADF replenishment. However, for the Bank to serve its clients with the efficiency and responsiveness expected of a modern institution, particularly one serving a dynamic region such as ours, it is crucial that there is a re‑invigoration of institutional reform at the ADB.


These challenges are significant. However, we are well placed to deal with them if we continue, as members, to work together through the ADF united by a goal to reduce poverty in the Asia‑Pacific region. 

You have extremely important work to do over the course of the next two days and in the meetings that follow and we look forward to significant progress and outcomes.

For some of you, this may also be your first visit to our wonderful country, Australia.  Therefore, after your hard work, I also encourage you take the opportunity to enjoy the many wonders of Sydney and Australia.

Thank you.