In a recent study, the ADB projected a bleak outlook for developing Asia in the coming two years, with economic growth dropping to 3.4 percent this year, down from 6.3 percent in 2008. Economic powerhouses in the past such as South Korea, Singapore, Thailand and Malaysia, among others, would inevitably slide into recessions, according to the report.

The capital increase will also give the ADB the financial capability to pursue longer term development priorities in the region. Even before the crisis, ADB's developing member countries faced an estimated resource gap of US$53 billion a year for meeting the Millennium Development Goals.

ADB's Vice President Zhao Xiaoyu told Xinhua that the bank planned to substantially increase its loans in coming years -- it will approve more than US$26 billion of loans in each year of 2009 and 2010, more than doubled from that of 2008.

But the Vice President also had his concerns. Whether these loans would be effectively "absorbed" by the recipient countries and whether there would be enough projects for the money to be used would be important gauges of the effectiveness of the potential loan increase, he told Xinhua.

Boosting trade facilitation

The trade volume in the Asia-Pacific region has been largely reduced since the beginning of the financial crisis, which has severely damaged the regional economy.

In certain ways, the crisis has laid bare the weaknesses of economies relying too much on export, but, trade, nevertheless, is still the strongest tool to boost economy and fight poverty for many parts of developing Asia.

Many experts believe financing difficulties have been a major obstacle to restore prosperous trade. Knowing where the rub is, the ADB has been endeavoring to ensure trade financing through its Trade Finance Facilitation Program (TFFP), a strong move in curing trade stagnancy of the region, particularly in times of crisis.

The TFFP, which began operations in 2004, had been providing finance and guarantees through international and local banks to boost trade in developing nations.

The ADB has expanded the TFFP from US$150 million to one billion. It has also increased the maximum maturity of loans permitted under the TFFP to three years from two years. After the fund increase, the program is predicted to generate up to US$15 billion in trade financing by 2013.

The ADB planned to expand those programs to six new countries from the current nine, and talks to enhance trade facilitation are expected in meetings of the next few days.

(Xinhua News Agency May 2, 2009)