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DEVELOPMENT: Food Crisis Rises To Forefront At AsDB Sessions

Marwaan Macan-Markar

MADRID, May 4 2008 (IPS) - Three words – high food prices – emerged like a gatecrasher at an event hosted by the Asian Development Bank (AsDB) here that was originally billed as a celebration of the bank’s new vision for poverty eradication in Asia.

Participants at the event discussed the AsDB’s ‘Strategy 2020’ – the long- term strategic framework (LTSF) for the 2008-2020 period – and raised the alarm about the current global food crisis. It is a reality that the bank cannot ignore, they said, in light of the millions who could be condemned to a life of hunger and poverty in the region.

"The rising food prices are a threat to food security and a threat to poverty reduction, and we stress that food security must be adopted as a challenge of the LTSF," D. Subba Rao, secretary of India’s finance ministry, said during a Sunday morning seminar for the central bank governors of the AsDB’s 67 member countries.

"The food crisis cannot be remedied through emergency measures. We have to put back money in rural development," added Supachai Panitchpakdi, secretary general of the United Nations Conference on Trade and Development (UNCTAD).

They were comments echoed by a ranking finance official from Bangladesh, who said that "the food problem is not a cyclical problem but a structural problem."

Such concerns exposed a deep flaw in the bank’s new quest to direct development in Asia. The LTSF makes little reference to aiding the continent’s agriculture sector in the rural areas – home to a majority of the 600 million Asians living in absolute poverty, on less the one dollar a day.


The LTSF, which was approved in March, places stress on five "drivers of change" to achieve "An Asia and Pacific free of poverty" by 2020. These drivers are: private sector development and private sector operations, good governance and capacity development, gender equity, knowledge solutions and partnerships. In addition, "inclusive growth, environmentally sustainable growth and regional integration" will feature as the bank’s "three strategic agendas."

Consequently, Haruhiko Kuroda, the bank’s president, was forced to admit this lapse by an institution that, for over 40 years, has been the premier lender of grants and loans for development in the Asia-Pacific region. "As you look at the LTSF, certainly the five core areas do not include agriculture. But there is a paragraph about agriculture [in the text]," he said during the seminar. "ADB can support agriculture through infrastructure, rural roads as well as rural finance," he said.

The tone of greater interest in the food scarcity than what the LTSF provides for was set on Saturday, the opening day of the AsDB’s 41st annual meeting of its governing board, which runs from May 3 to 6. During a late morning press conference, most of the questions Kuroda had to field were on food shortages. The bank, itself, released a 15-page paper on the subject, ‘Soaring Food Prices – Response to the Crisis’.

The annual meeting has attracted over 3,000 participants, ranging from finance ministers and central bank governors, to industrialists, bankers, academics and civil society activists.

Non-governmental organisations (NGOs) are hardly surprised by the dilemma the AsDB faces at this meeting, which was meant to showcase the virtues of the LTSF. "The food crisis has overshadowed the message that the ADB wanted to send out of this meeting," says Mishka Zaman, Asia programme manager of the Bank Information Centre (BIC), a development watchdog based in Washington D.C. "The concerns about food security has relegated the LTSF into a corner."

The concerns raised about the LTSF reveal its "lack of focus on rural areas, on agriculture," she added in an interview. "It shows that the LTSF is devoid of the reality that we see in the region."

The bank could not have done more damage to its relevance in Asia as a result of this clear shift away from assisting the agriculture sector, Isangani Serrano, vice president of the Philippine Rural Reconstruction Movement, based in Quezon City, told IPS. "Poverty from the birth of the ADB till now is a rural phenomenon. How the hell are they going to achieve a poverty-free Asia without dedicating a huge part of their portfolio to agriculture?"

The bank’s annual lending to the agriculture sector has averaged 11 percent. In 2007, the total loans and grants for development in agriculture and natural resources amounted to 510 million dollars, a substantial drop from the 930 million dollars in loans and grants committed in 2006, according to the bank’s annual report. The transportation and communication sectors, by contrast, have been allocated larger chunks of funds – 4.2 billion dollars in loans and grants in 2007 and 1.5 billion dollars the year before.

The bank had previously made a name for itself by backing development initiatives in the rural sector. In one such initiative that it backed in the mid- 1990s in the Philippines -where the AsDB is based – it approved a substantial loan for an agrarian reform development programme. The funds were to help improve productivity in the rural agriculture sector.

The spirit of such assistance influenced the bank’s vision for its first LTSF, produced around the turn of the century. That LTSF lent support to the targets set by the Millennium Development Goals (MDGs), a set of time- bound targets to slash, among other things, the rate of global poverty. The world’s leaders approved the 2015 deadline for the MDGs at a U.N. summit in New York in 2000.

But, the AsDB’s attempt to redefine its role in Asia through the second LTSF has other interests at heart, as the 34-page document that was distributed on Sunday revealed. No wonder such a shift has laid the AsDB open to questions.

even from the likes of.

"There is reason to be deeply concerned about what is happening in the agriculture sector in Asia," Rajendra Pachauri, Nobel Peace laureate and head of the Intergovernmental Panel on Climate Change (IPCC), said during his comments at Sunday’s seminar for central bank governors. "I don’t think Asia will be able to mount the impending crisis unless we bring about change in agriculture."

 
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