Amid the backdrop of deepening global economic slowdown, more than 3,500 participants gathered on Saturday for the annual meeting of the Asian Development Bank (ADB).

The meeting is expected to draw a great deal of world's attention, given ADB's role as a key financing institution devoted to boosting economy and reducing poverty in the Asia and Pacific region.

Finalizing reserve pool plan

Under the current global economic circumstances, cooperation in financial areas assumes ever more significance and urgency.

Highly dependent on exports, developing Asian countries have been hard hit by foreign demand slump as the United States, the European Union and Japan have successively entered recessions.

In May 2007, the Association of Southeast Asian Nations and China, Japan and South Korea (ASEAN+3) introduced the Chiang Mai initiative, a bilateral currency swap arrangement to help countries tackle a possible foreign capital flow shortage. The initiative was later upgraded to the Chiang Mai Initiative Multilateralization (CMIM), a regional foreign reserve pool. Now the ASEAN+3 countries have agreed to inject US$120 billion into the reserve pool, or the CMIM, in case of a financial crisis.

The Initiative has been considered important to Asia because it gives a signal that if there happens to be a big crisis in the region, there is financing available.

During the ADB governors meeting, the finance ministers of ASEAN+3 will discuss follow-up actions on the Chiang Mai Initiative.

One highly-expected outcome of their meeting is the finalization of the Initiative, namely an agreement on the contribution ratio of the projected reserve pool among ASEAN+3 member countries and a mechanism in using it. The ADB president expressed his hope that there would be "a decisive progress" on the issue.

The discussion was previously planned at the ASEAN meetings in April in Thailand, which was aborted due to anti-government protests.

Enhanced capacity after capital increase

The ADB meeting will also offer glimpses of how the multilateral lender will act after its Board of Governors approved the plan to triple its capital base from US$55 billion to US$165 billion.

The increase plan, the lender's largest one in history and also the first one since 1994, was approved on Thursday with endorsement of an overwhelming majority of the 67 members.

"This substantial increase is a resounding vote of confidence from our shareholders for what we can achieve as a premier development partner in the region," said ADB President Haruhiko Kuroda.

The 200 percent increase will help the ADB to boost its support to countries affected by the global downturn, enabling it to provide an additional US$10 billion from its Ordinary Capital Resources over the next few years for crisis-related assistance.

Many analysts believe the increase comes at the right time, as the global financial crisis continued to take its toll on developing Asia, where the ADB estimates more than 60 million people will be trapped in absolute poverty this year, and nearly 100 million more in 2010.