MADRID, Spain: Soaring food prices may erase gains in the fight against poverty, the Asian Development Bank said Monday as it outlined a strategy addressing the region's startling duality: fabulous new wealth alongside hundreds of millions still living on a dollar a day.
Bank president Haruhiko Kuroda opened the Manila-based bank's annual two-day meeting with a warning that sound economic management and emergency food assistance are needed for a billion poor Asians left vulnerable by skyrocketing prices for staples like rice.
"The absence of such measures could seriously undermine the global fight against poverty and erode the gains of the past decades," Kuroda said.
Of the poor in the Asia-Pacific region, he said, "their purchasing power has been eroded, placing them at greater risk of hunger and malnutrition."
The bank released a study saying gross domestic product growth in 10 key economies in the region — including China, India and South Korea — may be lowered by 3.4 percentage points next year if food prices, especially for grain, continue to rise at the current rate.
A second scenario with inflation woes compounded by spiraling fuel costs, gives an average reduction in growth of 4.2 percentage points in 2009.
For this year, the ADB said the first scenario would result in a reduction of just over one percentage point in GDP growth, and the second, a cut of 1.4 percentage points.
One of the main thrusts of the bank's new strategy for the next 12 years, called Strategy 2020, is called "inclusive growth." The idea is that a region throwing up gleaming skyscrapers right and left and churning out new billionaires in China and elswhere ensures that living standards also improve for its legions of poor.
Two-thirds of the world's poor live in Asia, and nearly 1.7 billion of the live on two dollars a day or less, the bank estimates.
On Saturday the bank announced emergency funding to help poor countries struggling with rice prices that have nearly tripled in four months. But it warned these could keep rising and stifle economic growth in the region by pumping up inflation and prompting governments to raise interest rates.
The ADB was created in 1966 to fight poverty through promoting economic growth.
It has said updating its mission is critical because 90 percent of the rapidly growing region's people are projected to be "middle income" by 2020.
The other two pillars of the new strategy are to encourage environmentally sustainable growth — a nod to the damage that unbridled development has wrought on the environment in a region with 8 percent annual growth — and greater regional cooperation.
One goal is to harness the savings accumulated in the region through its robust expansion and turn it toward financing infrastructure and other projects, thus helping Asia develop itself rather than depend on outside capital to do this.
On Sunday the bank fended off criticism that it is neglecting the region's poorest countries by lending heavily to cash-rich emerging powerhouses like China and India.
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