Mr Chairman, Mr President, Governors and Delegates,
I would like to thank the Government of Switzerland and the citizens of Geneva for their hospitality in hosting the 1998 annual meeting of the Asian Development Bank. I would also like to thank the staff of the Asian Development Bank for their efforts in organising this meeting.
The Asia Pacific, the ADB's key area of operations, has witnessed dramatic economic developments in the twelve months since we met in Fukuoka, Japan. The Asian financial crisis represents not only a significant turning point in the economic history of the region, but will have significant implications for the entire international financial system.
The speed and flexibility with which the Asian Development Bank and the World Bank have responded to the current crisis has been commendable. Their commitment of exceptional levels of financial assistance to the affected economies in support of the IMF led programs in Thailand, Indonesia and Korea has played an important part in the stabilisation of the financial crisis. The Bank's continued involvement will also be important for its ultimate resolution.
The ADB should also be commended for the innovative approach it has adopted in providing short term loans and guarantees for private sector loans in Thailand and Korea. This has been very important as it has supported economic activity and employment in both countries at a time when the lending capacities of the respective banking sectors is being restored. We welcome that the Bank is giving consideration to providing similar assistance to Indonesia.
These initiatives can contribute significantly to ameliorating the social impact of the crisis as well as in facilitating the general acceptance of the reforms that is necessary for the programs to be effective. We encourage the ADB and World Bank to keep helping governments address the social and environmental consequences of the crisis.
The difficulties confronting the affected economies in Asia are essentially structural. The arrangements that are put in place must lay the foundation for more transparent and competitive financial systems and promote more soundly based corporate investment decisions.
The Asian Development Bank and the World Bank can play a key role in assisting with the development of institutional capacities in financial and corporate sector regulation, the legal system, governance issues and other structural reforms.
The ADB has played an important role in supporting APEC Finance Ministers in addressing these issues, especially in the context of strengthening regional financial markets. In particular, its willingness to provide a Secretariat and technical assistance on the training of bank supervisors and securities regulators is most welcome.
I also welcome the contribution of the ADB to the IMF led regional surveillance arrangements under the "Manila Framework".
There is no doubt that effective coordination between the international financial institutions is essential for the successful resolution of the crisis. We are encouraged by the improved coordination achieved by the institutions in responding to the current crisis and urge that efforts be made to maintain this improved situation.
The financial crisis in Asia has also highlighted the fundamental importance of having efficient international financial institutions. The report of the Multilateral Development Banks to the Development Committee in Washington on 17 April 1998 on their progress in implementing the various recommendations of the MDB Task Force is therefore very timely.
We welcome the ADB's response to the MDB Task Force recommendations.
The Bank is continuing to make good progress in transforming itself from a project financier into a broad-based development institution. We note that the Bank has made significant progress in changing to a results-oriented institution that is primarily motivated by maximising the development impact of its operations.
Although the Bank has made a good start in implementing the recommendations of the MDB Task Force Report, it needs to do more.
It is particularly important for the Executive Board of the Bank to be adopting a more strategic policy focus and to concern itself less with issues relating to project approval and general day to day management issues. I welcome the initiative that President Sato has taken to exploit views on this matter within the Board and his intention to focus attention on the issue this year.
We also continue to place great importance on the Bank improving its project quality and performance. Poor project performance imposes substantial economic, financial and social costs to borrowers. In this regard, we welcome the move towards the development of objective performance indicators and the development of measurement techniques to better assess the impact of projects and programs on poverty reduction.
Although much of our attention has been devoted to Asia in the last 12 months, it is important that we do not forget the needs of our Pacific Island country members, many of whom have been seriously affected by the regional crisis and who continue to wrestle with the many development challenges confronting small island states.
Australia strongly encourages the Multilateral Development Banks to continue to address the ongoing problems of the Pacific Island countries. The Bank's continued active assistance, including in promoting good governance, is vital for economic stability and general development in the region. Although Australia attaches considerable importance to all Pacific Island Countries, we have a particular interest in Papua New Guinea as our nearest neighbour. We urge the Bank to continue to be responsive to the needs of PNG.
Australia welcomes the strengthened commitment shown by the ADB to its Pacific Island member countries over the last couple of years. We are particularly pleased with the increased level of cooperation between the ADB and the World Bank in their respective roles in the Pacific and it is imperative that this be maintained and further improved where possible.
Mr Chairman, although much remains to be done, we are confident that under the strong leadership of Mr Sato, the ADB will continue to make the necessary adjustments to make it a highly effective development institution.
We are also confident that with the assistance of the ADB and the other international financial institutions, the countries that have been affected by the current financial crisis are able to emerge significantly stronger, and better able to respond to the pressures - and to reap the benefits - of a globalised economy.
I would also like to take this opportunity to emphasise Australia's on-going strong support of the ADB and the importance we attach to its operations.
Thank you.