ADB to boost lending by $10 billion as crisis hits poor

NUSA DUA, Indonesia – The Asian Development Bank (ADB) will boost lending to the region’s poorest nations by more than $10 billion over two years, warning Saturday that the global economic crisis is jeopardizing the UN’s goal to halve poverty by 2020.

The announcement comes just days after the bank’s 67 member countries approved a tripling of the bank’s capital to $165 billion, expanding the lender’s ability to finance infrastructure and other projects aimed at reducing poverty in partnership with the private sector.

On Saturday, the bank’s president, Haruhiko Kuroda, told an annual meeting in Bali, Indonesia, that loans for Asia’s developing nations will rise to $32 billion over 2009 and 2010 from $22 billion in the previous two years.

The lending will “assist faltering economies and most importantly, protect the poor from the worst impacts of the crisis,” he said. It includes a $3 billion fund that the hardest-hit governments can tap to boost their own fiscal stimulus spending as they battle the downturn.

Activist organizations have not welcomed the bank’s bigger firepower, saying ADB-funded projects often harm the very people they aim to help.

“If not managed well, this 200 percent general capital increase could easily translate into a more than 200 percent increase in social and environmental harm,” said Red Constantino, executive director of NGO Forum on ADB — an umbrella group pushing the bank to become more accountable.

Last year, the bank pulled out of a coal-fired power plant project in Pilburi, Bangladesh, that activists warned would displace 43,000 people.

With economic growth in Asia not including Japan likely to fall by half to 3.4 percent this year from 2008’s figures, the regional bank estimates some 61 million people will be prevented from rising out of extreme poverty. That figure will rise to nearly 160 million if slow growth continues next year, it says. More than 900 million live on $1.25 or less a day.

Kuroda told a press conference he remains “hopeful” that extreme poverty in Asia can still be halved by 2020 though the global recession is making that and the United Nations’ other Millennium Development Goals harder to achieve.

“I’m afraid that in some countries poverty could increase,” he said.