ADB Meeting-Shanghai 2002 In Retrospect

Sirajuddin Aziz Executive Incharge, International Banking Division, Bank Alfalah gives a detailed account of the recent ADB Meeting. 

I had the pleasure and privilege to attend on behalf of my bank, the 35th Annual meeting of the Asian Development Bank, at Shanghai, China, which concluded last month. In about 35 years, this was ADB’s only second meeting to be held in China. The first meeting, which also I had attended was held in Beijing in 1989, when China had begun to demonstrate initial signs of economic reforms. The 1989 Beijing meeting was, however, marred by the presence of a large number of student and pro-democracy demonstrators who had gathered at the Tianamen Square just across the Great People’s Hall where the inaugural session was held. This episode finally ended in the massive crackdown on June 4, 1989. On the contrary, the Shanghai meeting was held in the traditional Chinese warmth and hospitality, with no glitches.

Shanghai, China’s financial capital is playing a key role in the emergence of China as a powerful number of the global financial community. Shanghai, a fabled city has a long and enchanting history. In the early 1900’s, upto 1937, when the Japanese occupied the city, it was home to large foreign population and a thriving movie industry. The architectural legacy of those romantic years and its combination with the newly developed parts makes the city of Shanghai, a truly representative showcase of China’s emergence as a dominant modern economic power.

The meeting was held at the Shanghai Convention Centre, which is located in the New Pudong Area, across the Huangpu River that cuts it from old Shanghai. Only about 8 years back, I remember standing at the Bund (as it is famously called) of the Huangpu River on the Shanghai side and watching across to the Pudong area, which largely was marshy land, that sported rice paddies. It is with lightning speed that Pudong has grown and its skyline is similar to Manhattan in New York. At nearly 540 sq. kms, Pudong is slightly larger than Singapore, with a population of about 1.7 million people. Over the past twelve years, Pudong’s economy has grown some 15 times over. More than 7,800 foreign firms from 70 countries and regions have so far invested in the area. Pudong’s international profile received tremendous boost when it successfully hosted in 1999 the “Fortune Global Forum” and the “APEC Summit” in 2001.

The ADB conference opened with a brilliant performance of songs, dance and acrobatics by over 100 young children, who displayed artistic mastery, in each of their performances. As a finale, to their performance, three young children jumped off the dais and rushed to hug President Jiang Zemin, ADB President Mr. Tadao Chino and China’s Finance Minister, Mr. Xiang Huai Cheng. The warmth and enthusiasm with which these leaders responded was most pleasing and the audience of a record 3,000 delegates reacted with impromptu applause and cheers.

President Jiang Zemin, in his inaugural address touched on the following fundamentals of what he described a common historic mission. In pursuit of this mission, he said, we must push vigorously for a multi-polar world and democratized international institutions; strive to establish a new International Economic Order that suits the development levels and requirements of all countries and fully respect the diversity in human civilizations. Further, Mr. Jiang remarked, “Asia is the biggest continent in the world, accounting for nearly 1/3 of the world’s landmass, 3/5 of world’s population and a 1/4 of world’s economic aggregates. With a time honoured history and brilliant cultures, Asian peoples are known for their fine qualities of self-esteem, self-confidence, diligence, courage, frugality and hardwork. They have achieved remarkable successes to the worldwide admiration in their countries, long endeavours for independence, liberation and development after overcoming numerous difficulties and setbacks. Throughout the long course of history, the people in Asia have made outstanding contribution to the advancement, of humanity. In the 21st century that is full of promises. Asia should, and can, make even greater contribution to the progress of human civilization”.

Mr. Jiang also applauded the efforts of ADB with particular reference to its role in China’s development. According to ADB reports, since 1986, ADB has lent US$ 11 billion for 86 projects in China, most of it for highways and power plants. In the next three years, it is expected to lend another US$ 3.5 billion, with much of the money funding agriculture and infrastructure projects such as roads and railways in the central and western provinces.

The Asian Development Bank (ADB) is a multilateral development financial institution owned by 60 members (Portugal, being the addition this year), 43 from Asia and the Pacific and 17 from other parts of the world. The overarching goal of ADB is to reduce poverty. ADB’s lending volume in 2001 was US$ 5.3 billion. Mr. Taduo Chino, in his fourth year, as President of ADB, has made some major policy shifts by adopting a poverty reduction strategy as its fundamental goal. Mr. Chino also initiated a major internal reorganization of the bank to make it more country focused, so that its anti-poverty strategies are truly devised and owned by the countries involved.

In his welcome address, President Tadao Chino focused on the following themes, Regional economic performance, ADB’s performance last year, challenges in Afghanistan, reducing poverty, environmental degradation and finally he echoed the sentiments of President Jiang Zemin, when he called for greater regional cooperation.

I have been attending ADB meetings for over 13 years now, and following each meeting, through the courtesy of the columns of various English dailies, I have successively lamented the absence of Pakistan’s initiatives, at such vitally important conference. I have witnessed, large number of Indian bankers, businessmen and industrialists, seeking economic support for their country. In fact, meeting an Indian delegate at one of the cocktail receptions, I asked him, which bank he was representing? He surprised me and said, “I am not a banker, I am in the I.T. field, running my own software house in Beijing”. I probed and asked what brings you to attend ADB? He stunned me by remarking, “We are here to support the presence of our Finance Minister Mr. Yashwant Sinha”!

But, atleast this year thanks to our active Finance Minister, Pakistan remained in limelight. He was accompanied by officials of Ministry of Finance, Economic Affairs division and Dr. Zafar Mahmood, our commercial counselor at the Beijing Embassy. It is important to mention here that our Ambassador Excellency Riaz Khokhar and Dr. Zafar Mahmood under his guidance are working devoutly on a mission to translate the goodwill and harmony Pakistan enjoys with China into an economic prospect.

Mr. Shaukat Aziz, in his address to the 35th annual meeting, was vehemently open-minded and without mincing words, remarked “being a frontline state in the war against terrorism, Pakistan experienced serious challenges on two counts. First, the overall slow down in the global economy affected key economic indicators of Pakistan. Second, it witnessed disruption in normal trading activities, resulting in decline in exports, imports, tax revenue, foreign investment and industrial production and delays in privatization of major transactions. Indeed, the events of September 11 and their aftermath affected Pakistan at a critical time when we were expecting growth in revenues and exports to improve our fiscal and external accounts”. The candid and forthright expression of true state of affairs was appreciated by the bankers that I spoke to. It is extremely important that factual position is given to prospective investors; it boosts in the long run their confidence in our reports and remarks. Undoubtedly, unlike the past, it was a pleasure to see our finance minister mingling with the delegates and who was not shy to talk to the large battery of international journalists. However, besides the official delegation, disappointingly there were just three Pakistani bankers including myself, while the other two were Mr. K. Rehman, President Askari Commercial Bank and Mr. Farooq Sheikh, who is Hong Kong based Regional Manager of a middle eastern bank.

ADB is an important partner of Pakistan. Our country was one of its 31 founding members, in 1966 and is currently the 13th largest shareholder. ADB approved 11 loans for 5 projects and programmes in 2001 totalling US$ 965 million. The technical assistance grants totalled US$ 6.6 million in 2001. The cumulative ADB lending to Pakistan as of December 31, 2001 was US $ 11.47 billion.

This year the country presentation on Pakistan was extremely well handled by Finance Minister Mr. Aziz and it is hoped that Pakistan, its government and the financial community will give ADB meetings the importance it deserves. In doing so, we must be careful to put our best foot forward.