Kuroda: China-led lender’s help needed to support growth

Bank of Japan in Tokyo

Asia needs all the help it can get in fighting poverty as both wealthy and poor nations grapple with widening inequality, Bank of Japan Gov. Haruhiko Kuroda said yesterday.

Kuroda welcomed China’s push to support regional growth through the Beijing-backed Asia Infrastructure Investment Bank, which has been viewed as a rival to traditional lenders like the Asian Development Bank.

The China-led AIIB brings welcome help in the effort to raise trillions of dollars in financing, said Kuroda, a former president of the Manila, Philippines-based ADB.

Kuroda was speaking at a conference on the sidelines of the ADB’s annual meeting, which begins tomorrow in Yokohama, near Tokyo.

The ADB, which has been led by Japan and the U.S. since its founding in 1966, has estimated more than USD26 trillion will be needed by 2030 to build roads, ports and other infrastructure required to support growth, combat poverty and cope with the repercussions of climate change.

“It’s simply not possible for the ADB and the World Bank to fill the gap completely,” Kuroda said when asked about the China-led bank.

The two development banks have begun co-financing on some projects, such as a highway project in Pakistan announced last year.

Kuroda, who led the ADB from 2005-2013, applauded the region’s progress but pointed to a “considerable burden” of poverty despite rapid growth in the past five decades.

That half-century has seen Asia’s share in global commerce more than double to nearly a third of the total in 2015. Meanwhile, average lifespans have growth to 74 years in East Asia and the Pacific and to 68 in South Asia, from 49 years and 45 years, respectively.

But about 60 percent of the 1.5 billion people living in extreme poverty, on less than $1.90 a day, are in Asia, he said.

Education, financial support for small businesses and enabling the poor to access banking services were crucial for breaking the cycle of poverty, he added. Elaine Kurtenbach, Tokyo