ADB MAKES $3 BILLION AVAILABLE TO HELP DEVELOPING COUNTRIES

Denpasar, Bali Province, May 2 (ANTARA) - The Asian Development Bank (ADB) is to make US$3 billion in funds available to help developing member countries (DMCs) cope with the impact of the global economic crisis in 2009-2010.

"We hereby announce that the ADB's Board of Directors has approved the establishment of the Countercyclical Support Facility (CSF) with funds amounting to US$3 billion," ADB President Haruhiko Kuroda said here on Saturday.

ADB is holding its 42nd Annual Meeting at Nusa Dua, Bali, May 2-5, which is scheduled to be officially opened by President Susilo Bambang Yudhoyono. The meeting is being participated in by around 3,500 representatives of 67 countries.

He said the CSF would provide short-term loans faster and cheaper than under ADB's existing special program loan (SPL) facilities.

"I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impact of the crisis," Kuroda told journalists.

The funds would be available to developing member countries (DMCs) which qualify for loans from ADB's Ordinary Capital Resources (OCR), said ADB President Haruhiko Kuroda, who announced plans for the new facility at a press conference at ADB's 42nd Annual Meeting in Bali.
OCR is a pool of ADB funds available for lending to middle-income countries at near market terms.

The CSF announcement comes just two days after the ADB's Board of Governors agreed to triple ADB's capital base from $55 billion to $165 billion.

The 200% increase allows ADB to substantially increase its support to countries affected by the global downturn. The new facility would form part of that assistance.

"Today, we will issue a report on ADB's responses to the global economic crisis," the ADP President said.

The report, The Global Economic Crisis: Challenges for Developing Asia and ADB's Response, says ADB plans to increase its lending assistance by more than $10 billion in 2009-2010, bringing total ADB assistance for these two years to about $32 billion. This compares with about $22 billion in 2007-2008.

The crisis support will include project investments, quick-disbursing policy-based loans, guarantees, and new initiatives designed to address specific crisis needs. ADB will also expand its support through grants for policy analysis and capacity building.

The ADB forecasts economic growth in its 44 developing member countries at 3.4% in 2009 and 6.0% in 2010. The current account surplus as a percentage of gross domestic product is likely to fall to 4.9% in 2009 from 5.3% in 2008 and further drop to 4.7% in 2010