The Asian Development Bank (ADB), as a regional financial institution, has endeavored to ensure trade financing and push for regional cooperation to fight crisis, said a senior executive of the ADB on Thursday.
Zhao Xiaoyu, Vice President of the bank, told Xinhua that the institution has expanded its Trade Finance Facilitation Program (TFFP) from 150 million U.S. dollars to one billion U.S. dollars, as a major move to cure trade stagnancy of the Asia Pacific region.
The trade volume in the area has been largely reduced since the beginning of the financial crisis, which has severely damaged the regional economy, said Zhao. Financing difficulties became a major obstacle to restore prosperous trade.
"As a regional financial institution, ADB needs to seek ways to assure trade financing," said Zhao.
ADB has also increased the maximum maturity of loans permitted under the TFFP to three years from two years.
After the fund increase, The program is predicted to generate up to 15 billion U.S. dollars in trade financing by 2013, he said.
Access to trade financing in times of crisis is vital to cushioning the shock of the global downturn on international trade, especially for developing countries, whose economy rely highly on international trade, said Zhao.
The TFFP, which began operations in 2004, had been providing finance and guarantees through international and local banks to boost trade in developing nations.
ADB plans to expand those programs to six new countries from the current nine, Zhao said without elaborating.
"Some banking institutions from China have expressed their willingness to participate in the program," said Zhao.
Though the program is limited in scale, the positive signal it has sent is that regional institutions should play a role in promoting international trade, which demands more coordination and cooperation between countries, he said.
Besides trade financing, ADB also strived to promote regional cooperation in South Asia, the Greater Mekong Subregion and Central Asia, said Zhao.
To assist the region to recovery, the ADB will invest more in infrastructure and poverty reduction, in coordination with stimulus package issued by governments of the region, he said.
The ADB recently predicted that China's gross domestic product (GDP) would grow by seven percent year on year in 2009.
Zhao, who had been senior official of the Chinese government for years, said that other countries sometimes undervalue the efficiency of the Chinese government, and as it has in the past, the Chinese economy might give the world a "surprise" in 2009.
However, he emphasized that the central government should not underestimate the risks of the current crisis.
China should be more efficient, active and innovative in dealing with the crisis to find a way for future sustainable development, he said.
(Xinhua News Agency April 2, 2009)
