Calling on all staff and programmes to "think poverty at all times", ADBpresident Tadao Chino said it was time to refocus the bank's energies on theelimination of extreme poverty in developing Asia, home to 900 million poorpeople.

"Development is more than economic growth," Chino said at a news conferenceto announce the new policy. "Economic growth alone does not guarantee thatall people will benefit from it, especially where people lack access to it,"explained Chino, who took over the bank presidency in January.

The Manila-based bank normally finances $ 6 billion worth of projects andprogrammes a year. The new 40 per cent standard would apply to bothconcessional and regular lending. Chino said that while Asian countries andthe bank had been very successful in improving quality of life in the pastthree decades, the ADB now has to target its efforts more to achieve furthergains.

"In the aftermath of the Asian crisis, we have to recognise that growth isnot enough to mitigate poverty-and that the reduction of poverty has notbeen speedy enough and not everywhere," Chino said, explaining why a newstrategy against poverty reduction had to be issued. The bank was set up in1967. In subsequent years, the proportion of poor people in the region hasfallen from more than half to about one-third. In the same period of time,the number of poor people has fallen from more than one billion to 900million, bank figures show.

Under what Chino described as a new "philosophy", the bank is setting up anew poverty reduction unit by end 1999. It will undertake poverty analysesof individual countries and focus more projects and training on women,because they make up two-thirds of the poor in the Asia Pacific. By 2002,the bank will see to it that staff get the skills for "anti-povertyactivities".

The bank promised to opt not necessarily for big-ticket projects but thosewith more micro effects, and to pay renewed attention to the rural sector.The bank said the three pillars of its framework for poverty reduction are"pro-poor, sustainable economic growth, social development and goodgovernance", which result in "socially inclusive development".

"Reduction of poverty is no longer just one of five objectives, it is ADB'soverreaching goal," said the bank's document containing its povertyreduction strategy. "The fundamental shift will affect every aspect andlevel of ADB's operations."

Peter Sullivan, ADB vice president, says the 40 per cent standard is morestringent that the bank's existing policy: at least 50 per cent of itsprojects and 40 per cent of lending volume must go to projects with goalsother than pure economic growth.

"We have now set higher standards for poverty alleviation, and the old onewas easier to meet," he told journalists. "The bar has become higher, so tospeak." Under the old standard, projects on tertiary education would countas social sector. But they would be excluded under the new policy onpoverty-specific projects, which have to benefit the most number of poorpeople.

The ADB's new policy comes on the heels of criticism by some non-Asiandonors that the bank has strayed from basic poverty alleviation, andfocussed too much on financial sector aid during the Asian crisis that beganin 1997.

This has given rise to concern that such considerations may be hinderingfurther contributions to the bank's concessional fund for the poorestnations, the Asian Development Fund (ADF).

The current ADF-7 fund runs out this year and early next year andnegotiations are still ongoing on the eighth replenishment. Chino says thereis no fixed amount yet for ADF-8, but that the bank would like to see it atthe previous one's level of $ 6.3 billion.

Part of how the bank is able to carry out its new strategy also depends onthe new resources it gets-and officials hope the refocussing on povertyhelps build political support.

Another obstacle to the bank's ambitious strategy is the fact that its richdonors, as in other multilateral financial institutions, oppose concessionallending to countries like China and India where almost 80 per cent of Asia'spoor live.

Said Chino, "We (ADB) think they should be eligible for ADF. But at thediscussions for ADF-7, we didn't see any agreement among donors to give thisfacility to the two countries." Chino added, "This has to be discussed amongdonor countries. This is the problem."

Still, the bank policy says it will look for ways to expand lending forpoverty reduction to China and India and go around this constraint.Chino said the options include giving "special terms" of lending, even fromthe non-concessional or ordinary loan funds and efforts to provide moretechnical assistance grants.

--IPS