Developing Asia to show 'mild' recovery in 2010: ADB senior official

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TOKYO, April 2 Kyodo -
Developing Asian economies are expected to show a ''mild'' recovery, not a
''V-shaped'' one, in 2010, and the speed and effectiveness of stimulus packages
adopted by industrialized countries will be key to achieving this, a senior
official of the Asian Development Bank said Thursday.
''Developing Asia will show a mild recovery in 2010, that would be 6.0 percent
growth,'' Jong Wha Lee, acting chief economist of the Manila-based bank, said
in an interview with Kyodo News.
The bank's Asian Development Outlook 2009 issued earlier this week said
developing Asia's growth this year will slow to ''its most sluggish pace''
since the Asian financial crisis in the late 1990s. It projects growth to slide
to 3.4 percent this year, from 6.3 percent in 2008 and 9.5 percent in 2007.
But the region's economy will then recover to a 6.0 percent growth rate in
2010, the report said.
Lee said developing Asia is in better shape than other regions because it
suffered limited damage from the U.S.-triggered subprime mortgage crisis, but
it is hard to expect a sharp recovery because of the region's ''significant''
dependence on external demand.
Export-led Asian economies have been hit by plummeting demand for their export
items amid the global economic slump. The bank estimates that growth in the
volume of world trade decelerated from 7.5 percent in 2007 to 6.2 percent in
2008, and projects a 3.5 percent contraction in 2009.
''Stimulus packages which will be adopted by industrialized economies including
Japan, but also the U.S. and Europe, are very much important,'' he said, adding
that the quick and effective implementation of such measures would help the
global economy recover, not this year, but from 2010.
Lee said it is also necessary to boost the internal demand of developing Asian
countries to encourage a shift in their savings to more efficient and
productive investment, and to develop social infrastructure, especially with
regard to education, housing and health.
A planned substantial increase in ADB's capital base should allow the bank to
maintain and expand lending to member economies to enable them to continue to
promote important projects, Lee said.
The ADB has proposed a threefold increase in its capital base. The plan to
increase capital for the first time in 15 years will be officially tabled next
Monday at a board meeting and put to a vote. The ballots cast in postal voting
by the bank's 67 members will be counted by the end of April, bank officials
said.
The largest capital boost proposal since the bank was established in 1966
appears certain to gain approval as ADB's largest shareholders -- Japan and the
United States -- are backing the plan, they said.
''I think Japan's role is very very important,'' Lee said.
==Kyodo