"The East Asia and Pacific region is the most dynamic in the world and our strategy needs to reflect the evolving challenges of such a diverse range of economies," Mr. Adams said. "Most East Asian countries are well positioned to navigate the global slowdown because of investments made in structural reforms in the past 10 years, but the food price crisis and climbing oil prices have dealt a blow to poor people in a number of the region’s client countries."
Growth in the low- and middle-income economies of the East Asia and Pacific region picked up from 9.8 percent in 2006 to 10.2 percent in 2007, but was expected to decline because of the global slowdown. The World Bank is advising several client countries in the region on ways to handle food and energy-related inflation, including safety nets for protecting the poorest people and policy of directions for securing rice supplies, expanding sources of renewable energy, and mitigating the short-term impact of high oil prices.
The Bank’s East Asia and Pacific region has placed strong emphasis on lending to countries to help strengthen their public institutions, develop infrastructure, support community building, and improve human capital. For example:
- In China , where energy demand is almost outstripping supply, a $200 million loan will help catalyze large-scale domestic financing to increase the efficiency of energy-intensive industries, while a $191 million loan in Liaoning Province will finance a project to demonstrate energy efficiency and environmental performance of heating and gas services in selected cities.
- In Vietnam, a $155 million credit from the Bank Group’s International Development Association (IDA) and a $9.8 million grant from the Global Environment Facility are helping the city of Hanoi to improve urban air quality and expand its mass transit public transport system.
- In Indonesia, a $200 million development policy loan will support policy reforms in the country’s infrastructure sector. Two Bank-supported urban and rural poverty reduction programs worth a total of $409 million will support the government’s effort to reach all of Indonesia’s 70,000 villages with the community-driven and -monitored service delivery program. In education, an $86 million Bank loan is supporting the government’s effort to upgrade the qualifications of over 1.4 million teachers and create world-class educational institutions.
- In Papua New Guinea, a $17-million loan is supporting the country’s work to strengthen governance and accountability in mining sector institutions and to empower local people in mining communities to monitor the delivery of programs and services.
- In Cambodia, a new Poverty Reduction and Growth Operation, supported by a $15 million IDA grant, is helping improve the country’s public financial management.
- In Mongolia, a country on the verge of a major minerals boom, the Bank is supporting the government to implement the Extractive Industries Transparency Initiative and is finalizing preparation of an IDA project to help the government set up an appropriate financial and regulatory framework for managing the mining and extractive industries sector in an environmentally sustainable and transparent way.
International Finance Corporation - the Bank Group’s private sector arm – committed $1.63 billion for 60 projects in East Asia and Pacific in FY08, an increase of 73 per cent over FY07. IFC is focusing advisory and investment services on strengthening its impact in the poorest countries and lagging regions of middle-income countries that have not participated in the region's growth, as well as on climate change. Nearly half of the projects IFC delivered in FY08 were in the poorest countries of the region, and the volume of financing to climate change-related projects increased by 78 per cent over FY07 to $407 million, in areas such as solar equipment manufacturing, renewable energy, and an expansion of the ground-breaking energy efficiency finance program in China.
"By focusing our efforts in working with the private sector in the poorest countries as well as developing our products to address climate-change concerns in middle-income economies, IFC is helping the private sector in East Asia and Pacific to address the most significant development challenges facing the region," said Karin Finkelston, IFC’s Director for East Asia and Pacific.
Also active in the region is the Bank Group’s Multilateral Investment Guarantee Agency (MIGA), which has provided US$1.2 billion in political risk insurance or guarantees for more than 50 projects in East Asia since its inception. These guarantees have ranged from less than $200,000 for a project in China to US$118 million for an investment in the Philippines. Guarantees issued by the agency have covered investments in the financial services, manufacturing, oil and gas, power, transportation, telecommunications, and water sectors across the region, helping to promote inward foreign direct investment.
"Foreign direct investors can play a critical role in reducing poverty—by building roads, providing clean water and electricity, and above all, providing jobs," said James Bond, MIGA’s Acting Executive Vice President. "We are committed to promoting socially, economically, and environmentally sustainable projects in the region to help address constraints in financial sector development, health services, and infrastructure, and manage scarce resources and environmental challenges."
Despite the global slowdown, governments in the region have made great strides in reducing poverty through sustained growth and pro-poor policies have produced dramatic reductions in poverty in many of the Bank’s client countries in the region. In 2007, the proportion of poor people (with consumption below $2 a day) fell to 25 percent, compared with 69 percent in 1990.
