The New Nation - Internet Edition

Staff Reporter

The Asian Development Bank will provide immediate budgetary support to the hardest hit countries in Asia and the Pacific to alleviate their fiscal burdens and cushion the impact of rising food prices on the poor and vulnerable, says ADB President Haruhiko Kuroda said.

Kuroda told a news briefing on the eve of the 41st Annual Meeting of ADB in Madrid, Spain that rising food and fuel prices have placed many governments in the region under significant pressure to put food on the tables of the poor and vulnerable, according to an ADB release. Over a billion people in the region are seriously impacted by the food price surge as food expenditure accounts for 60 per cent of total expenditure basket. Food and energy together account for more than 75 per cent of total spending of the poor in the region.

Rising food prices threaten to undermine the region's efforts to fight against poverty and achieve the Millennium Development Goals by 2015, he said.

Many governments have provided generous subsidies, imposed price controls, and banned exports to keep food grain prices in check.

"We believe targeted interventions to protect food entitlements of the most vulnerable and poor are more effective to mitigate the immediate impact of rising food prices," Kuroda said.

ADB has outlined the nature of the food price crisis, its underlying causes, expected impacts and possible responses in a paper titled "Soaring Food Prices: Some Possible Responses."

Kuroda said, in the short run, ADB will closely work with the affected governments in the region to strengthen safety net programs for food-stressed populations and emergency food security reserves systems.

ADB is also supporting the International Rice Research Institute (IRRI) and the International Food Policy Research Institute (IFPRI) to boost research and provision of inputs to farmers to help overcome key constraints, he said.

"In the medium to long run, governments need to step up investment, boost rural infrastructures and strengthen institutions to sustain higher farm output," he added.

Meanwhile, ADB has secured US$11.3 billion for the next four-year phase of its concessional development fund to fight poverty in the Asia and Pacific region.

"The generous contribution of donor nations will help developing Asia-Pacific countries meet Millennium Development Goal targets, and bring better opportunities and a brighter future to people living in the region's poorest nations," Haruhiko Kuroda said.

The Asian Development Fund (ADF) provides grants and low-interest loans to the Asia and Pacific's poorest countries, which are home to some 400 million people living on less than US$2 a day. The new ADF will cover the period of 2009-2012.

Roads, clean water and sanitation, electricity networks and other essential infrastructure that improve the lives of the impoverished and accelerate growth will continue to be a cornerstone of ADF support.