Adb Reports

Innovative rural road project

Women, the key beneficiaries:

Isolated villages in Sri Lanka will be connected to provincial road networks through an innovative project that will work closely with Local Government institutions to employ poor villagers, particularly women, to rehabilitate and maintain rural access roads in their area.

The ADB Board of Directors has approved a $3 million grant from the Japan Fund For Poverty Reduction - funded by the Government of Japan and administered by the ADB - to finance the project in over 60 villages in the Eastern and the North Central provinces.

Some 10,000 families in the project area have been marginalized from mainstream development and remain in poverty because rural access roads to their villages are either in poor conditions or do not exist.

Most of the families depend on the Government’s welfare program, which barely meets their daily needs.

The ADB project will upgrade about 250 kilometres of rural access roads and pilot test a plan to improve rural transport services, to connect local communities to the provincial roads or to essential social services facilities. Four local Non-Government Organizations (NGOs) will be retained to identify, train and supervise up to 2,000 community members to work on road rehabilitation and maintenance.

Another 900 community members will be given a skills training for livelihood development. At least 50 percent of the workers will be women, with opportunities extended to war widows and female heads of the household.

The NGOs will also assist the workers in opening and maintaining bank accounts so that a portion of the workers’ income will be paid directly into individual accounts. These savings may provide a base for the establishment of micro and small-scale enterprises after completion of the road work.

“Isolation and marginalization are fundamental causes of poverty, and the villages in the project area have been isolated and marginalized for many years,” said Social Development Specialist in ADB’s South Asia Department Francesco Tornieri.

“Through the rehabilitation of the rural access road, the project will help address the underlying causes of poverty and provide sustainable livelihood opportunities to a considerable number of the poor,” said Tornieri.

ADB more upbeat :

Emerging Asian economies for 2009 and 2010

Emerging East Asian economies have performed better than anticipated thanks to swift policy responses and an improved external environment. The region is set for a speedy recovery this year and in 2010.

Emerging East Asia is rebounding strongly and growth rates next year are likely to slightly outpace 2008 in most countries

The Asian Development Bank’s (ADB) Asia Economic Monitor released yesterday is now forecasting that the 14 economies of emerging East Asia will grow by 4.2 percent this year and by 6.8 percent in 2010. That is higher than the 3.6 percent and 6.5 percent forecast for the region in September’s Asian Development Outlook 2009 Update.

Emerging East Asia comprises the 10 economies of the Association of Southeast Asian Nations and the People’s Republic of China (PRC); Hong Kong, China; Republic of Korea; and Taipei,China.

“Emerging East Asia is rebounding strongly and growth rates next year are likely to slightly outpace 2008 in most countries,” said ADB’s Chief Economist and head of the Office of Regional Economic Integration Jong-Wha Lee which prepared the report.

Special assessment

In a separate special assessment, also released ADB raised its forecast for growth in developing Asia to 4.5 percent this year and 6.6 percent in 2010. Developing Asia comprises 45-member countries of the ADB.

The Asia Economic Monitor noted that the pace of recovery is uneven across emerging East Asia. The newly industrialized economies of Hong Kong, China; the Republic of Korea; Singapore; and Taipei,China, along with the more export-oriented economies of the Association of Southeast Asian Nations (ASEAN), were hit hard by the global financial crisis but are poised for a swifter recovery. The less open ASEAN economies were damaged much less by the global downturn and are not expected to post a major rebound in growth in 2010.

PRC’s economy, which maintained growth throughout the global financial crisis, is likely to grow faster in 2010 than in 2009, with the pace dependent on the speed of the global recovery. ADB is maintaining its forecasts for the PRC at 8.2 percent for this year and 8.9 percent in 2010.

Key challenge

“Despite the V-shaped recovery now under-way, it’s essential that fiscal and monetary stimulus remain accommodative where possible to put economies on a sound footing. A key challenge for each economy will be to carefully time when best to rollback the stimulus to ensure sustained recovery but avoid excessive inflation and hefty fiscal shortfalls,” said Lee.

Other risks to the outlook for the region include a short-lived recovery in developed economies, which are markets for many goods produced in emerging East Asia, a slower-than-expected recovery in private consumption in Asia and destabilizing capital flows. Investors have rushed back to Asia in recent months as global risk appetite has returned. However, this poses policy challenges for the region, potentially destabilizing the real economy and raising the threat of a sudden reversal of flows.

Greater cooperation

The region would benefit from greater cooperation to manage capital flows, enhance productivity, and ensure financial stability. Closer coordination on exchange rates, in particular, would boost cross-border investment and trade, the report said.

“By working more closely together, Asia can lay solid foundations for long-term economic expansion and ensure it plays a role in the reshaping of the global financial and economic architecture,” Lee said.

ADB and the ASEAN Secretariat are currently setting up an interim surveillance body in advance of the creation of a permanent independent regional surveillance unit. The unit will monitor and analyze regional economies in support of the multilateralized Chiang Mai Initiative, a pool of Asian foreign reserves that can be used to support regional economies in difficulties.

ADB

ADB upgrades economic forecast for developing Asia

The Asian Development Bank (ADB) has upgraded its economic forecast for developing Asia after third-quarter data showed a better-than-expected performance by many countries in the region.

In a special assessment of the region released yesterday, ADB said it now expects developing Asia to grow by 4.5 percent in 2009 and 6.6 percent in 2010. That marks an increase from the 3.9 percent and 6.4 percent it predicted in its Asian Development Outlook (ADO) 2009 Update published in September.

Developing Asia comprises 45 member countries of ADB and covers Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.

PRC’s economic growth to accelerate next year, but the speed of that upturn will depend on the performance of the global economy

“The global economic situation is changing rapidly, necessitating frequent reassessments. The prospects for much of the region look rosier than they did in September when we last did a full study of the region. Fiscal and monetary stimulus policies and a moderate improvement in the G3 economies of Europe, Japan and the US helped East Asia and Southeast Asia in particular,” said Jong-Wha Lee, ADB’s Chief Economist.

ADB forecasts East Asia - comprising the People’s Republic of China (PRC); Hong Kong, China; Republic of Korea; Mongolia; and Taipei,China - will expand by 5.1 percent this year and 7.3 percent next year while Southeast Asia is now set to grow 0.6 percent in 2009 and 4.5 percent in 2010. Southeast Asia is made up of Brunei Darussalam; Cambodia; Indonesia; Lao People’s Democratic Republic; Malaysia; Myanmar; the Philippines; Singapore; Thailand and Viet Nam.

The forecast for the PRC remains unchanged from September’s ADO 2009, update at 8.2 percent in 2009 and 8.9 percent in 2010. Meanwhile, ADB now expects growth in India to be 7.0 percent this year, one percentage point higher than previously expected, but has kept the 2010 forecast unchanged, also at 7.0 percent.

“We expect the PRC’s economic growth to accelerate next year, but the speed of that upturn will depend on the performance of the global economy. The recovery in the G3 is still soft and there are a number of downside risks,” said Lee.

“Meanwhile, India faces some challenges - particularly from rising prices - that the government and central bank will have to consider carefully as they assess policy.”

The Central Asia now looks set to grow more slowly in 2009 than previously expected largely due to persistent economic weakness in Armenia, but the region should still expand by 3.6 percent in 2010. The outlook for Pacific economies remains unchanged.

ADB publishes its Asian Development Outlook for developing Asia in March or April and updates those forecasts in the Asian Development Outlook Update the subsequent September. It publishes the Asia Economic Monitor, a study of the 14 economies of emerging East Asia in July and December.