New $100 bn BRICS bank opens in China to challenge US-led lenders

Yahoo – AFP, 21 July 2015

The bank's opening comes two weeks after a BRICS summit hosted by

Russian President Vladimir Putin (AFP Photo/Alexander Nemenov)

A new $100 billion international bank dedicated to the emerging BRICS countries opened in China's commercial hub Shanghai on Tuesday, officials said, as an alternative to other multilateral lenders.

The "New Development Bank", backed by the so-called emerging BRICS nations Brazil, Russia, India, China and South Africa, has been viewed as a challenge to Washington-based institutions.

The NDB's website explicitly describes it as an "alternative to the existing US-dominated World Bank and International Monetary Fund" which will address needs for infrastructure and sustainable development.

It comes as Beijing -- which is seeking a greater role on the global political stage to mirror its rise to become the world's second-largest economy -- is also setting up a separate Asian Infrastructure Investment Bank (AIIB).

Chinese Finance Minister Lou Jiwei played down the competitive aspect.

"The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models," he told the NDB's opening ceremony in Shanghai, as quoted by the official Xinhua news agency.

The bank says on its website that it will have authorised capital of $100 billion, with $50 billion paid in initially.

From L: Brazil's President Dilma Rousseff, Indian Prime Minister Narendra Modi, 

Russia's President Vladimir Putin, China's President Xi Jinping and South Africa's

 President Jacob Zuma at the 7th BRICS summit in Ufa on July 9, 2015 (AFP

Photo/Alexander Nemenov)

Xinhua quoted bank president K. V. Kamath, formerly a private banker in India, as saying the institution's management was "working on initiation of operations", including "making business policy" and "developing project preparations".

Operations would begin late this year or early in 2016, he added.

The opening comes two weeks after a BRICS summit hosted by Russian President Vladimir Putin.

Moscow -- which has suffered huge currency fluctuations and struggled to attract investors since the outbreak of the crisis in Ukraine -- sees the bank and a BRICS currency reserve pool as alternative global financial institutions.

At the time of the summit, Russian Foreign Minister Sergei Lavrov said in a statement that BRICS "illustrates a new polycentric system of international relations" demonstrating the increasing influence of "new centres of power".

'Financial order'

The BRICS nations, which represent 40 percent of the world's population, formally agreed to establish the bank at a meeting in Brazil in July last year.

The World Bank said it hopes to work with the newcomer.

"We are committed to working closely with the New Development Bank and other multilateral institutions, offering to share our knowledge and to co-finance infrastructure projects," World Bank president Jim Yong Kim said in a statement.

China, the world's second-largest economy, is also leading the setting up of 

another new multilateral lender, the Asian Infrastructure Infrastructure Bank (AIIB)

(AFP Photo/Johannes Eisele)

The regionally-focused Asian Development Bank also said it would "look forward" to working with the NDB.

Chinese analysts denied the BRICS bank was aimed at challenging other multilateral agencies.

"It's a complement, instead of a challenge, to existing international institutions," Li Daxiao, chief economist of Yingda Securities, told AFP.

"It can help strengthen the currency markets and maintain a stable financial order through the internal stabilisation of the BRICS countries," he said.

The other new Chinese-based multilateral lender, the AIIB, will be headquartered in Beijing and China will be its biggest shareholder with about 30 percent, according to the legal framework signed late last month by 50 founding member countries.

Major European and Asian economies including Germany, Britain, France and Australia have joined the AIIB, but the United States and Japan -- the world's largest and third-largest economies, respectively -- have declined to do so.

Jokowi Calls for Reform of UN at Asian-African Conference

Jakarta Globe, Ezra Sihite, Apr 22, 2015

President Joko Widodo, center, chats with Chinese President Xi Jinping, left, as
 Japanese Prime Minister Shinzo Abe, right, looks on at the opening of the
60th Asian-African Conference in Jakarta on Wednesday. (AACC2015/Prasetyo Utomo)

Jakarta. President Joko Widodo has criticized the United Nations and the world’s financial institutions for leading an imbalance of economic and political power.

Joko’s speech in Jakarta opened a meeting of Asian and African nations to mark the 60th anniversary of a conference that was seen as a united stand by the developing world against colonialism and led to the Cold War era’s non-aligned movement.

The Indonesian president said that 60 years on, many countries in the two continents have gotten rid of their colonial masters and become independent nations.

“However our fight is far from over. A new world order based on justice, equality and prosperity is still out of reach,” the president said, referring to the aims of the inaugural 1955 Bali Conference.

 

Joko said 20 percent of countries lived in a world of abundance while the rest, especially countries in Asia and Africa, struggled to cross the poverty line.

“We, Asian and African countries, demand that the United Nations reform to function optimally as the world body that puts justice for all nations first,” Joko said. “For me, the global imbalance is getting more and more suffocating.”

Joko said the new global order should also be opened to emerging economic powers and leave the “obsolete ideas” of post-World War II Bretton Woods institutions in the past.

“There is a shifting world reality … Those who say the global economic problems shall only be solved through the World Bank, the IMF and the ADB, these are obsolete ideas,” Joko said. “There needs to be change. It’s imperative that we build a new international economic order that is open to new emerging economic powers.”

The International Monetary Fund and the World Bank are at the center of the Bretton Woods global financial order created by the United States and Europe.

Joko made no mention of the China-backed Asian Infrastructure Investment Bank (AIIB), which is seen as a threat to the Western-dominated World Bank and Asian Development Bank, but Indonesia is one of nearly 60 countries that have offered to be founding members of the AIIB.

The United States and Japan have not thrown their support behind the bank, which is seen as a threat to US efforts to extend its influence in the Asia-Pacific region and balance China’s growing financial clout.

Indonesia invited heads of state and government from 109 Asian and African countries, but there have been dozens of no-shows and officials said only 34 leaders turned up.

Zimbabwean President Robert Mugabe, speaking at the conference, said countries in Asia and Africa “should no longer be consigned to the role of exporters of primary goods and importers of finished goods.”

The long-serving ruler called it a “role that has historically been assigned to us by the colonial powers and starting from the days of colonialism.”

The world order has changed dramatically since nearly 30 heads of state gathered in 1955 to discuss security and economic development away from global powers embroiled in the Cold War.

Many of those countries, such as China, India and Indonesia, are now themselves at top tables like the Group of 20 and wield significant economic power.

Joko said the group was meeting again in a changed world but still needed to stand together against the domination of an unspecified “certain group of countries” to avoid unfairness and global imbalances.

Abe & Xi

Japanese Prime Minister Shinzo Abe met Chinese President Xi Jinping on the sidelines of the summit on Wednesday, a Japanese government official said, the latest sign of a thaw in relations between the Asian rivals.

However, speaking at the summit ahead of the expected meeting, Abe warned powerful nations against imposing on the weak, an implicit reference to China. He also made an allusion to Tokyo’s remorse in the past over World War II, but stopped short of issuing a fresh apology.

Abe’s comments made it an awkward diplomatic backdrop for the expected meeting with Xi. But a Japanese official said ahead of Abe’s address that the two leaders would meet later in the day. China’s Foreign Ministry did not immediately respond to a request for comment.

Tensions between Asia’s two biggest economies have flared in recent years due to feuds over wartime history as well as territorial rows and regional rivalry.

Memories of Japan’s past military aggression run deep in China, and Beijing has repeatedly urged Japan to face up to history. But the meeting on Wednesday between the two leaders was expected to promote a cautious rapprochement that began when Abe and Xi met at a summit in Beijing late last year.

“We should never allow to go unchecked the use of force by the mightier to twist the weaker around,” Abe said at the summit in Jakarta. “The wisdom of our forefathers in Bandung was that the rule of law should protect the dignity of sovereign nations, be they large or small,” Abe said, speaking after Xi had addressed the conference.

China is locked in territorial rows with several smaller countries in the South China Sea, while Japan has a separate feud over islets in the East China Sea.

Abe said in his Jakarta speech that Japan had, “with feelings of deep remorse over the past war,” pledged to adhere to principles affirmed at the first Bandung Conference, including refraining from the use of force and settling international disputes by peaceful means.

As the Jakarta conference got underway, President Joko was flanked by Xi and Abe for a group leaders’ photo. The two remained on either side of Joko when they sat and watched an Indonesian traditional dance troupe perform.

JG & Reuters

Japan's Prime Minister Shinzo Abe, left, shakes hands with China's President Xi 

Jinping at the start of their bilateral meeting on the sidelines of the Asian-African 

Conference in Jakarta on Wednesday. (Reuters Photo/Kyodo)

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Emerging Countries Blast US for Not Backing IMF Reform

Jakarta Globe – AFP, Apr 17, 2015

A delegate walks past a sign for the IMF/WB Spring Meetings in Washington
 DC on April 16, 2015. (AFP Photo/ Andrew Caballero-Reynolds)

Washington. The emerging economies of the Group of 24 sharply criticized the United States on Thursday for holding up what they see as critical reforms of the International Monetary Fund.

Speaking at the spring meetings of the IMF and World Bank, the group said the failure after five years of the US Congress to ratify the reforms was undermining the effectiveness and legitimacy of the global crisis lender.

“We reiterate our deep disappointment with the lack of progress in implementing the IMF quota and governance reforms agreed to in 2010 and strongly urge the US to complete ratification,” they said.

“This remains an impediment to IMF credibility, legitimacy and effectiveness and has considerably delayed forward-looking commitments,” they added, pointing to a second set of reforms that had been expected this year.

The 2010 reforms, a doubling of IMF funding and a reallocation of voting power to boost China and other up-and-coming economic powers, were originally propelled by Washington, and President Barack Obama’s White House has repeatedly endorsed them.

But US Congress has refused to sign off on the deal, with some legislators not wanting to contribute more money to the IMF and others concerned about any erosion to the dominant US role at the fund.

Criticisms of Washington have steadily grown, and IMF managing director Christine Lagarde said on Thursday that she understood why other IMF members “are frustrated and impatient to see that reform actually implemented.”

“I am also calling on the United States to actually obtain ratification of that reform so that the institution can continue to be representative of the entire community as it evolves.”

The G-24 endorsed the “Plan B” put forward in recent weeks to split the the two facets of the 2010 reforms and put through the quota revision without the need for ratification by the US Congress.

The net effect of that reform would be to reduce the voting power of European countries while increasing that of China, India and others.

Agence France-Presse

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US 'screwed up' handling of AIIB, says Albright

Want China Times, Xinhua 2015-04-01

Madeleine Albright addresses the Senate Armed Forces Committee on
Jan. 29, 2015. (File photo/Xinhua)

The United State has "screwed up" on its way to deal with the China-proposed Asian Infrastructure Investment Bank (AIIB), former US secretary of state Madeleine Albright said on Tuesday.

One of the motives for China to initiate the AIIB was that the US Congress held up the voting share reform in the International Monetary Fund, the World Bank and other international institutions, Albright said at an event held by the Washington-based think tank the Center for Strategic and International Studies (CSIS).

As China and other countries have been questioning Washington's excessive dominance in international institutions, the US executive branch has proposed to Congress to try to adjust some of the voting share in the World Bank and IMF, in some way to ensure more equitable voting shares, but Congress has delayed to ratify such a reform. "I think there has been certain amount of frustration (from China and other countries) about that," Albright said.

According to the former secretary of state, the AIIB should not be seen as some kind of Chinese power grab, but an opportunity for the US to be able to put forward ideas on transparency and regulatory issues.

The US Treasury secretary, Jacob Lew, said recently that emerging and developed economies alike are looking to other alternatives as a means of driving the global system forward, as the international community waits for Congress to approve these reforms.

Also on Tuesday, Lew made it clear that the US stands ready to welcome the AIIB as it complements existing international financial institutions and upholds high standards.

The AIIB, expected to be formally established by the end of 2015, will be an international financial institution to fund infrastructure projects in Asia. China confirmed on Tuesday that 30 countries have been approved as prospective founding members of the bank.

US President Barack Obama, left, poses with Chinese President Xi Jinping as

 he arrives for the Asia-Pacific Economic Cooperation leaders meeting at Yanqi

Lake, north of Beijing on Nov. 11, 2014. (AFP Photo/Greg Baker)

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"The Timing of the Great Shift" – Mar 21, 2009 (Kryon channelled by Lee Carroll) - (Text version)

“… Here is another one. A change in what Human nature will allow for government. "Careful, Kryon, don't talk about politics. You'll get in trouble." I won't get in trouble. I'm going to tell you to watch for leadership that cares about you. "You mean politics is going to change?" It already has. It's beginning. Watch for it. You're going to see a total phase-out of old energy dictatorships eventually. The potential is that you're going to see that before 2013. They're going to fall over, you know, because the energy of the population will not sustain an old energy leader. Remember where you heard it... in a strange, esoteric meeting with a guy in a chair pretending to channel. [Kryon being factious... Kryon humor] Then when you hear it, you'll know better, won't you? "Maybe there was something really there," you'll say. "Maybe it was real," you'll say. Perhaps you can skip all the drama of the years to come and consider that now? [Kryon humor again]

These leaders are going to fall over. You'll have a slow developing leadership coming to you all over the earth where there is a new energy of caring about the public. "That's just too much to ask for in politics, Kryon." Watch for it. That's just the beginning of this last phase. So many things are coming. The next one is related to this, for a country in survival with sickness cannot sustain a leadership of high consciousness. There is just too much opportunity for power and greed. But when a continent is healed, everything changes. .."

".. Many years ago, the prevailing thought was that nobody should consider China as a viable player on the economic stage. They were backward, filled with a system that would never be westernized, and had no wish to become joined with the rest of the world's economic systems. Look what has happened in only 30 years. Now, look at Africa differently …”

Chinese president calls for 'new regional order' at Asian forum

Chinese President Xi Jinping has opened a regional economic forum by calling for more cooperation among Asian nations. He urged Asia to build "a community of common destiny."

Deutsche Welle, 28 March 2015

 Chinese President Xi Jinping REUTERS/Kyodo News/Parker Song/Pool

In his keynote address at the Boao Forum on Hainan island in southern China, Xi stressed the need for Asian nations to join forces to increase regional and world prosperity.

"Facing the fast-changing regional and international landscapes, we must see the whole picture, follow the trends of our times and build a new regional order that is more favorable to Asia and the world," he told the hundreds of regional leaders at the China-hosted gathering, which has taken place annually since 2002.

He said that by improving trade and transport links in the region, "we can turn the seas of Asia into seas of peace and cooperation."

Xi also called on the world's nations to support Beijing's ideas for a new development bank that some see as a potential rival to the Western-dominated International Monetary Fund and World Bank and the Japanese-dominated Asian Development Bank.

Seeking to allay such fears, the Chinese president said his country would promote "coordinated development between the Asian Infrastructure Investment Bank (AIIB) and multilateral financial institutions such as the Asian Development Bank and World Bank."

The AIIB is due to be set up later this year, with March 31 the deadline for countries to apply to join as founding members.

Chinese economy 'healthy'

At the same time, Xi emphasized that the Chinese economy was running as planned despite annual economic growth having sunk to about 7 percent, the lowest in 20 years.

"This new normal of the Chinese economy will continue to bring more opportunities for trade growth and development for the countries of Asia and beyond," he said, adding that China was now aiming for increased quality and efficiency as opposed to rapid growth in its economy.

He also announced more than $500 billion (459 billion euros) in Chinese investment abroad, saying that China's size gave it "more responsibility for world peace and development."

'Silk Road'

A focus of discussions at the forum is likely to be China's proposed "Silk Road economic belt" initiatives aimed at facilitating regional trade through cooperation on railways, roads, energy and information technology, the state-run China Daily newspaper said.

China is currently seeking to extend its influence in the region in a bid seen as a challenge to the previous dominance of the United States.

Leaders of Austria, Indonesia, Sri Lanka, Nepal, Armenia and Zambia were all expected to attend the forum, which its founders hope will become an Asian version of the World Economic Forum in Davos, Switzerland.

tj/sms (AP, dpa)

Xi Jinping, right, meets President Joko Widodo of Indonesia at the

Great Hall of the People in Beijing, March 26. (Photo/Xinhua)

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Reasons behind Russia's reluctance to join AIIB: Duowei

Want China Times, Staff Reporter 2015-03-27

Chinese president Xi Jinping greets his Russian counterpart Vladimir
Putin at the APEC summit in Beijing, November 2014. (Photo/CNS)

Russia may have good reasons behind its reluctance to join the Asia Infrastructure Investment Bank (AIIB) proposed by China, says Duowei News, a US-based Chinese political news outlet.

With the March 31 deadline for applications to be a founding member of the AIIB looming, Russia has still not decided whether it wants to be a part of the multilateral development bank aiming to finance infrastructure projects in the Asia region. A March 23 report in a Russian newspaper cited comments by the country's deputy finance minister Sergei Storchak to the effect that Russia has not yet decided if it will apply for membership.

While Russia sits on the fence, several other countries have already caught the "late train," with Australia, South Korea and Austria each indicating a desire to apply over the past week. International Monetary Fund (IMF) managing director Christine Lagarde and Asian Development Bank president Takehiko Nakao also both recently declared a willingness to cooperate with the AIIB, which has been viewed as a key sign of support for China.

While it is natural for the United States and Japan to be skeptical of the AIIB, Duowei said, Russia's reluctance to join has been considered a head-scratcher by many analysts because it appears to have more reasons than countries like the UK, France and Germany to want to be a part of the system.

Back in 2007, Russian president Vladimir Putin publicly stated that the world needs to establish a new international financial system to replace the outdated, undemocratic and awkward systems of the present. With the United States still in charge of global financial order, it is inevitable that the financial reforms Russia is pushing for will involve building a new platform, Duowei said.

The scope of the AIIB has already far exceeded that of a regional investment bank and has the potential to influence financial markets on a global scale, Duowei said. Even though the Ukraine crisis, which has isolated Russia from the West, has been devastating for the national economy and its future prospects, Russia is still undergoing structural changes to its economy and holds strong potential in its infrastructure development sector.

Based on information released by Oxford Economics, Russia has attracted more foreign direct investment over the last decade than both Brazil and India, though this does not necessarily mean that investment funding in the infrastructure development sphere meets demand. The Global Competitiveness Report 2013-2014, published by the World Economic Forum, said that the quality of Russia's infrastructure, due to a lack of investment, has slid to be ranked 93rd in the world.

The Road to 2030: A Survey of Infrastructure Development in Russia, a report from global professional services organization EY, notes that in the past five years, Russia has announced at least 325 infrastructure projects. These, as well as other projects such as the upgrading of the Trans-Siberian Railway and the competion of 14 operational airfields in the arctic by the end of the year, will all require significant sums of investment funding, Duowei said.

Despite the above backdrop, Russia still has three main reasons for refusing to join the AIIB, Duowei said. The first is that Putin still wants to build Russia into the leader of Eurasia's economic community, something membership in the AIIB cannot help him achieve. Even if Russia joins, it will not have the power to dictate terms and will arguably not even have significant authority, Duowei added, adding that this is perhaps why Russia is pursuing alternatives such as strengthening bilateral ties with China and actively boosting its position in the BRICS community among the other emerging nations of Brazil, India, China and South Africa.

Secondly, Russia does not want membership in the AIIB to rob it of its economic independence. While Russia can compete with the US and China in terms of its military might, its economy its undoubtedly a fatal shortcoming. According, the Kremlin may have concerns over whether, with China leading the way, the AIIB can genuinely improve infrastructure development in Asia and operate in a fair and open manner that adheres to financial discipline. The better option might therefore to wait and observe to see how the AIIB functions first before deciding whether it is prudent to join, Duowei said.

Thirdly, Russia's reluctance to join the AIIB may reflect China's wishes to some extent. In recent weeks of negotiations, China has been insisting to European countries that Beijing will not have veto power in the AIIB, a declaration that has prompted the likes of the UK, France, Germany and Italy to decide becoming a founding member. The absence of the maligned Russia from this picture therefore actually assists China in gaining support in Europe, Duowei said, noting that this theory makes sense given that China and Russia are now viewed as being in a "quasi-alliance" by the international community. Considering its strong ties with China, Russia will not have too many difficulties if it decides to join the AIIB once the bank is up and running and moving towards success, Duowei added.

Sri Mulyani Indrawati, managing director at the World Bank. 

(File photo/Xinhua)

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Li Keqiang reaffirms AIIB cooperative stance

Want China Times, Xinhua 2015-03-25

Li Keqiang, right, meets Takehiko Nakao in Beijing, March 23. (Photo/CNS)

The Chinese premier, Li Keqiang, on Monday reaffirmed cooperation between the Asian Infrastructure Investment Bank (AIIB) and existing financial institutions.

The AIIB will take an open and inclusive attitude and be complementary to existing development banks, said Li at a meeting with the president of the Asian Development Bank (ADB) Takehiko Nakao .

The AIIB will strengthen the region's communication, social and economic development, Li said.

Nakao said the ADB was ready to cooperate with the AIIB.

Speaking of the support of the ADB for China's social and economic development, poverty reduction and regional economic cooperation, the premier pledged further partnership with ADB and called on it to play a bigger role in poverty reduction and development.

Britain, France, Germany, Italy, Luxembourg and Switzerland recently applied to join the AIIB as founding members, which already had 27 prospective founding members.

Nakao is in Beijing for the annual meeting of the China Development Forum, a platform for business and academic leaders to interact with China's top decision makers and economic planners.

This year's meeting has attracted more than a hundred CEOs from international corporations, experts and scholar, and leaders of international organizations.

Sri Mulyani Indrawati, managing director at the World Bank. 

(File photo/Xinhua)

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Want China Times, Staff Reporter 2015-03-19

The UK, Italy, France and Germany strain against Uncle Sam's bonds of
"friendship" and "brotherhood" to get at a cake offered by China,
with the word "benefits" on top. (Cartoon/CFP)

An opinion piece published on the official WeChat account of the overseas edition of the Communist Party mouthpiece People's Daily has outlined the motivation behind Beijing's efforts to set up the Asian Infrastructure Bank (AIIB).

Germany, France and Italy have now followed in the footsteps of the United Kingdom to apply to be founding members of the bank against the advice of the United States, pushing the number of countries taking part in the initiative to 31.

Many international news organizations have interpreted the AIIB as an attempt by Beijing to challenge the status of the US in the international community. The People's Daily commentary said China had no other option but to do so due to the unequal treatment of emerging and developing economies in existing institutions such as the IMF and World Bank.

After 2008, the G8 countries — the US, UK, France, Germany, Japan, Italy, Canada and Russia — came to the realization that their "wealthy nations club" was not enough to save them from the effects of the global financial crisis and they needed to include emerging and developing countries, including China, to sort out the crisis, which led to the convening of the G20, the piece said. This had little or no effect on the fundamental manner by which the world economy was governed, as implemented by the IMF, the World Bank and the WTO, as the US and the G8 nations were still the dominant voices, the commentary said.

Attempts to reform the IMF in 2010 by giving emerging and developing countries more clout were blocked by the US, which left a gap in representation in the global economy which China believes the AIIB can fill, the piece said.

Other multilateral development funds in Asia have been unable to keep up with development trends in the region and there has long been a need for a new organization to resolve issues with the Asian and Chinese economies, the piece said.

The Asian Development Bank has shown its political colors with the US "Asia Pivot" strategy, the piece said, adding that the bank, founded in 1966 and led by the US and Japan, is in decline and that it is inconsistent in the loans it gives to Asian countries, making it difficult for some of them to get the funds they need.

The piece also said that the AIIB differs from the World Bank and the Asian Development Bank in terms of its functions, as the latter two are aimed at reducing poverty, whereas the former is aimed at building infrastructure and supporting the social and economic development of Asian nations.

China also likely hopes to benefit financially from regional infrastructural development, including large-scale transnational highways and railway networks, the piece said. China is currently capital rich, but there is not enough demand for infrastructure projects domestically, so infrastructure investments in other Asian countries are a good way to assert its influence in neighboring countries, as well as finding a purpose for surplus funds.

According to Asian Development Bank figures, Asian countries will require around US$8 trillion in infrastructure investment up to 2020, which will provide China with good investment opportunities, according to the article. China has a great deal of experience in infrastructure construction and this will likely mean a good return on investment, the piece said.

If China shares the dividends of its economic transformation it will also improve relations between countries in the region, the piece said. Many countries in the region are undergoing similar reforms to China, but they lack funds, skills and experience, all of which China can help to provide.

The launch of the bank will also lead to the further internationalization of the renminbi, the piece said.

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Ashton hails UN resolution on EU's extra observer rights

English.news.cn 2011-05-04

BRUSSELS, May 3 (Xinhua) -- EU foreign policy chief on Tuesday welcomed the UN resolution on a special observer status that will enable EU representatives to present and promote the bloc's positions in the UN.

"I am very pleased that the United Nations General Assembly adopted today's Resolution, which takes account of the institutional changes brought by the Lisbon Treaty,"said Catherine Ashton in a statement.

Ashton said she has placed great importance in the EU's cooperation with the UN, adding that the resolution will enable the EU to "continue to support the UN's vital work in a coherent and effective manner."

A total of 180 members of the 192-nation UN General Assembly voted for the resolution, and Zimbabwe and Nauru abstained for the voting.

Media reports say Ashton did a lot of lobbying before the vote and it is now highly possible other regional groups may seek similar right to speak up at the General Assembly and reply in debates.

Some countries were outspoken about their concerns over the decision, saying that granting the EU an extra collective voice will privilege its 27 members above all other countries.

Editor: yan

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ESCAP, ADB and UNDP joint Report calls for strengthening social protection

MANILA (UN ESCAP Information Services) – A joint report by the United Nations and the Asian Development Bank (ADB) warns that the global economic crisis could trap an additional 21 million people in the Asia-Pacific region in extreme poverty, living on less than $1.25 a day.

Achieving the Millennium Development Goals in an Era of Global Uncertainty: Asia-Pacific Regional Report 2009/10, launched today in Manila, examines the toll that the global economic crisis has taken on progress towards the Millennium Development Goals (MDGs) in the Asia-Pacific region. Produced by United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), ADB and the UN Development Programme (UNDP), the report identifies opportunities for action – showing how countries of Asia and the Pacific can better protect themselves from this and future crises.

“This report shows that, while we are at a moment of crisis for the MDGs we also have an opportunity,” says Noeleen Heyzer, UN Under-Secretary-General and Executive Secretary of ESCAP at the report launch. “As this crisis has exposed many vulnerabilities in the region – we can now address them and direct this recovery towards a stronger sustainable development path for the Asia-Pacific region.”

"Most stimulus measures have focused on areas other than social expenditures," says Ursula Schaefer-Preuss, ADB Vice President. "If we are to address the human impacts of the economic slowdown and achieve the MDGs, then social spending needs to be stepped up substantially."

"Asia has much weaker social protection compared to other regions such as Latin America and Eastern Europe,” says Ajay Chhibber, UNDP Regional Director for Asia and the Pacific and UN Assistant Secretary-General. “Without better protection people fall back into poverty with economic crisis, health pandemics and natural disasters and cannot recover easily, making the achievement of MDGs more difficult."

The report notes that long-term social protection can actually strengthen Asia’s resilience against future shocks. Yet the report finds that across the region, only 20 per cent of the unemployed and underemployed have access to labour market programmes such as unemployment benefits, and only 30 per cent of older people receive pensions.

If fiscal stimulus packages have a strong component of social expenditures, notes the report, this is likely to produce a double dividend – not only boosting growth more rapidly but also accelerating progress towards the MDGs.

Prior to the economic crisis, the region as a whole had been making notable gains, including being on track to achieve three important targets: gender parity in secondary education, ensuring universal access of children to primary school, and halving the proportion of people living below the $1.25-a-day poverty line. However, the economic crisis undermined the momentum.

Asia and the Pacific is still the home to the largest number – more than 50 per cent – of people, both rural and urban, without basic sanitation, of under-5 children who are underweight, of people infected with TB, of people living on less than $1.25 a day, and of rural people without access to clean water, according to the report.

It notes that in 2009 the crisis trapped up to an additional 17 million people in extreme poverty, and in 2010, another 4 million, giving a total of 21 million or roughly the equivalent to the population of Australia.

The most adversely affected segment of the population is women, who constitute the majority of Asia’s low-skilled, low-salaried, and temporary workforce that can easily be laid off during economic downturns. Moreover the crisis has reduced the demand for migrant labour – and women form nearly two-thirds of the total Asian migrant population.

The report points to opportunities for the region to protect itself and the MDG progress from future crisis though regional cooperation. Regional cooperation would also be particularly valuable for the trade in food, and could include grain banks that are maintained in each country but readily accessible to others, notes the report.

Expanding Asian monetary and financial coordination would be particularly useful to reduce external shocks such as with the global financial crisis. While fiscal stimulus is the most practical way of filling the gap left by declining exports, in the medium and long term, countries will need to generate domestic demand in a more sustainable way.

Countries can consider diversifying their export markets to become less dependent on demand in the West, suggests the report. They can boost trade within the region by liberalizing trade regimes and improving transport links, simplifying customs and inspection procedures.

By lowering trade barriers and creating more opportunity for the Asia-Pacific region to invest within itself, there can be a greater insulation against such crisis in the future.

Achieving the Millennium Development Goals in an Era of Global Uncertainty: Asia-Pacific Regional Report 2009/10 is the fourth regional MDG report for Asia and the Pacific produced by the three agencies.

For more information please go to: http://www.mdgasiapacific.org/.

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917m Asians Now Live in Extreme Poverty: Report

A woman cleaning her child in a North Jakarta slum. According to the city’s Public Works Office data, 70 percent of the country is forced to wash in contaminated water. (Photo: Afriadi Hikmal, JG)