ADB Vice-President: regional co-op to help Asia first recover from crisis

Special Report: Global Financial Crisis

by Xinhua Writers Zhou Erjie, Wang Jingzhong

BALI, Indonesia, May 3 (Xinhua) -- Various regional
cooperative mechanisms, if implemented effectively, could help lift Asia first
out of the global crisis, said Zhao Xiaoyu, Vice-President of Asian Development
Bank (ADB) in an interview with Xinhua Sunday.

"Asian countries themselves have a big enough market
to generate the demand now developed countries fail to," said Zhao, "but this
requires countries to make concerted efforts under regional cooperative
platform."

Within ADB are three main existing mechanisms, namely
Greater Mekong Subregion (GMS) Program, Central Asian Regional Economic
Cooperation Unit (CAREC) and South Asia Subregional Economic Cooperation (SASEC)
initiative.

"My analysis is that once the pan-Asian cooperation
is put on track and demand is boosted, there will be very positive factors to
tackle the crisis and this is where the ADB is best at," Li said.

But the Vice-President had his concerns. "Many
governments have announced their stimulus packages, but do they have the
capacity to deliver them? And are there so many readily available projects to
spend on?" Zhao asked.

"It's all about implementation and supervision after
the plans are announced," he said.

Besides, Zhao believed trade financing to be another
critical key for the region to recover from the crisis, as the ongoing crisis
has prompted banks to reduce lending to emerging markets and cut credit lines to
both importers and exporters.

"It's not that they don't have the money, it's that
they do not have the confidence to lend it," he said.

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 150 million U.S.
dollars 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 15 billion U.S. dollars in trade
financing by 2013.

"The last point," Zhao said. "is that there should be
no protectionism of any form. Trade barriers are really dangerous constrains to
Asia's recovery."