Mr Chairman, Governors, Mr President, ladies and gentlemen.
On behalf of the Government of Australia, I would like to thank the Government of Uzbekistan for hosting this, the 43rd Annual Meeting of the Asian Development Bank.
When we last met in Indonesia, the world was in the midst of the biggest global recession since the great depression. At that time, the ADB had predicted economic growth to fall by 3 percentage points relative to 2008 levels to 3.4 per cent. Extreme poverty in the Asia-Pacific region was expected to increase by around 60 million relative to growth remaining at 2007 levels.
Final economic growth for the region in 2009 was 5.2 per cent and the ADB now predicts growth for the Asia-Pacific region in 2010 to be around 7.5 per cent. However, growth rates vary significantly across the Asia-Pacific region – with economic growth in Central Asia and the Pacific in particular remaining low. Increasing economic growth in these regions is essential to lift people out of poverty.
President Kuroda, let me thank you and all the staff of the ADB for the Bank's efforts in assisting the Asia-Pacific region in response to the global crisis. The additional US$9 billion to be provided by the ADB in response to the crisis response over the 2008-2010 period has been important in helping our region during these challenging times. Initiatives including the establishment of the US$3 billion counter-cyclical support facility were important in supporting developing member countries during this troubling time.
Risks still remain however – including a slower global recovery, with the outlook for the industrialized economies still somewhat uncertain. Other potentially unsettling issues include a sharp increase in international commodity prices, deteriorating fiscal positions, and the persistence of global imbalances. Rising food prices, which disproportionately impact the poor, also pose a risk to the region.
Government policy makers need to face the challenge of sustaining growth in this still uncertain environment through adhering to sound and responsible fiscal and monetary policies. These served the region well when the crisis broke. Governments need to adapt them appropriately as recovery takes hold and the crisis recedes. Notwithstanding this, there is also plenty of scope for longer-term improvements to the Asia-Pacific's monetary, exchange rate, and fiscal policy frameworks.
The G20 was instrumental in responding to the crisis and helping avert a sustained global recession. The G20 continues to play an in important role in our region through its work on the Framework for Strong, Sustainable and Balanced Growth and through its work on financial safety nets. Australia encourages the ADB to continue to work closely with the G20 and with regional member governments to consider how longer term adjustments to economic policy settings can be made to lift global growth and not just simply shift it.
The ADB also has a key role in supporting strong financial systems in the region, through its work in helping develop local bond markets, supporting and providing trade and credit guarantees, and through technical assistance to enhance regulatory supervision. With the EAS Finance Ministers meeting held in the margins of this meeting, we encourage the ADB to take this opportunity to work closely with the EAS in capacity building in financial cooperation activities in the region.
More generally, the ADB should continue to work closely with other regional bodies such as ASEAN, APEC and the EAS in order to achieve maximum effectiveness from their programs and projects. The Bank is a catalyst for regional cooperation and integration, linking national and regional priorities, and we commend the particular work of the Bank in supporting sub-regional programs aimed at enhancing economic integration and growth.
Last year the ADB Board of Governors, supported by the G20, voted to increase the Bank's capital by 200 per cent, bringing the total worth of the Bank to around US$165 billion. Australia was an early supporter of the 200 per cent general capital increase and on 8 January this year was proud to be the first non‑borrowing country to formally subscribe to the GCI. We now encourage the Bank to effectively implement the changes required to enable the sustained increase in lending over the medium to long term.
In this regard I would like to refer to the results of the 2009 ADB Stakeholder Perception Survey, and to commend the Bank at undertaking this process of external review. It is positive to note that stakeholders see the ADB as a trusted and reliable organisation with excellent knowledge of the region. Feedback is also positive on ADB staff's technical skills and understanding of relevant countries. The survey however identifies areas where more needs to be done. Many stakeholders viewed the Bank as being bureaucratic, slow and needing to improve project management capabilities. More also needs to be done to address issues of gender equality and governance in the Asia-Pacific region. Australia encourages the ADB to continue its work of improving in these areas of concern.
Australia supported the Bank when it released its long-term strategic framework, Strategy 2020, in 2008. With the increased resources, we encourage the ADB to prioritise its operations towards the three distinctive agendas identified in Strategy 2020 of: inclusive economic growth, environmentally sustainable growth, and regional integration.
As we head towards the mid-term review of the ninth replenishment of the Asian Development Fund later this year, it is important that the Bank and its members begin to focus on the key objectives for the tenth replenishment due in 2012. Australia has been a strong supporter of the Asian Development Fund over time: we intend on continuing this support. With two-thirds of the world's poor living in the Asia-Pacific Region, much work remains to be done. Australia particularly encourages the ADB to ensure a strong focus in the next ADF replenishment on small and fragile states within our region, which often experience low economic growth and face particular risks of rising levels of poverty.