Greater Noida, May 4 (IANS) India Friday made a strong pitch for expanding financial resource base of the Asian Development Bank (ADB) to help alleviate poverty and improve infrastructure in poor countries.
Addressing the annual meeting of the ADBÂ’s board of governorsÂ’ here, Prime Minister Manmohan Singh said multilateral agencies like ADB needed more financial resources to help developing countries reach their development potential.
Â“We have expanded the resources of the IMF enormously in response to the crisis in Europe. We now need to substantially expand the resource base of multilateral development banks so that they have the firepower to help developing countries reach their development potential,Â” the prime said while addressing the opening session of the annual meet here.
Manmohan Singh advised the Manila-based ADB to take innovative measures to channelise financial resources.
“I understand that the level of lending that the ADB can sustain is projected to come down. At this juncture, ADB should take the initiative to find innovative ways to channelize global savings into infrastructure projects in Asia Pacific,Â” he said.
Finance Minister P. Chidambaram also expressed the similar view and urged the member countries to enhance their support to the multilateral lending agency.
Â“Fellow Governors, I call upon you to consider ways and means to increase ADBÂ’s resources to meet AsiaÂ’s needs for infrastructure, economic growth and poverty reduction,Â” he said.
Chidambaram pointed out that an estimated $8-10 trillion investment was required in physical infrastructure in Asia over the next decade.
In India the estimated investment in infrastructure during the 12th five year plan (2012-17) period is nearly $1 trillion. Half of it is expected to come from private sector.
Â“Given the humongous sum of money that is required, government outlays for infrastructure need to be augmented by the private sector. ADB has its work cut out. It must continue to allocate a major portion of its sovereign lending for infrastructure development,Â” Chidambaram said.
He said Â“sustainable level of lendingÂ” by ADB is expected to decline, from $10.1 billion to $8.0 billion.
Â“Thus, the support that ADB can deliver for economic development and poverty reduction in the region will be seriously constrained by the lack of adequate capital. We may hit the wall in about three years,Â” Chidambaram, who is chairing the ADB board of governorsÂ’ meet, said.
He said the prevailing low interest environment has resulted in low investment income and has limited the amount that can be ploughed back into equity for the ADB.
Â“The financial position of ADB is sound at the moment, but is constrained. The prevailing low interest environment has resulted in low investment income and has limited the amount that can be ploughed back into equity for the Bank. I am afraid this low interest environment will continue for some more time,Â” he said.