KYOTO, May 5: The Asian Development Bank came under pressure on Saturday not to abandon the region’s poorest as it considers a major overhaul in response to warnings that it risks becoming irrelevant.

With Asia’s rapid economic growth expected to wipe out widespread absolute poverty in much of the region by 2020, the ADB wants to carve out a new role to ensure it does not fall into obscurity.

ADB governors gathering for the public lender’s annual meeting in Kyoto, Japan agreed that an overhaul was needed, but there were divisions on how to reform.

“The ADB must adjust the current model or else at the extreme it will become obsolete in the new Asia,” said Indonesia’s ADB governor, Finance Minister Sri Mulyani Indrawati.

“It is necessary for the ADB to be reborn as a new ADB,” added Japanese Finance Minister Koji Omi.

But some member nations fear the region’s poorest could be overlooked if the ADB shifts too far towards other areas, such as road development and telecommunications. Afghanistan and India led calls for the Asian Development Bank not to forget its original objective.

“The ADB needs to continues, or enhance, its engagement with its poorest members, the so-called fragile states,” said Afghanistan’s ADB governor, Finance Minister Anwar Ul-haq Ahadi.

“Asia’s growth has largely bypassed countries, such as Afghanistan. It is these countries, the fragile states, where the ADB has the greatest impact,” he said.

India’s acting ADB governor, D. Subbarao, also urged the bank not to forget its core goal.

“Helping reduce poverty must remain the fundamental objective,” he said.

The ADB — whose biggest shareholders are the US and Japan, followed by China and India — is considering an ambitious modernisation as many developing Asian nations move toward middle income status.

An outside panel of experts appointed by the bank last month urged the ADB to “radically transform itself,” estimating that by 2020 widespread absolute poverty would have been beaten in most Asian countries.

The ADB’s primary role when it was established in 1966 was to borrow money from the capital markets to lend to developing Asian economies that might struggle to raise affordable funds on their own.

But many Asian nations can now easily raise private funds themselves and experts warn that the region is now awash with too much capital, not too little.

“The ADB just cannot survive (as it is) in the future in a region with a capital surplus,” said the report’s lead author, Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development.

The expert report said the development bank should increase its focus on supporting more equitable and environmentally sustainable growth, and take a more regional approach instead of concentrating on individual countries.

“We have a concern that this regional cooperation, while important, might dilute the ADB’s focus of aid from helping individual countries,” said India’s Subbarao.—AFP