On 27th September 2022, Asian Development Bank (ADB) announced its plan to fund at least USD 14 billion between 2022 and 2025 in a comprehensive program of support to ease the food crisis in the Asia-Pacific and to improve long-term food security through strengthening food systems against climate change and biodiversity loss during the 55th Annual Meeting of the ADB Board of Governors being held in Manila, the Philippines from 26th to 30th September 2022.
- This is the first partial in-person annual meeting of ADB since 2019.
- In this regard, a support program will be initiated to help the 1.1 billion people in the Asia-Pacific who lack healthy diets due to poverty and soaring food prices.
- Out of the total funding, USD 3.3 billion is earmarked for 2022 and the rest USD 10.7 billion will be spread over 2023-2025.
What does this support plan envisage?
i.In the long term scenario, it will improve food security by strengthening farming and food supplies to cope with climate change and loss of biodiversity.
ii.In the short term scenario, support will be targeted and designed to help the most vulnerable, particularly women.
i.The funding will be utilized in both existing and new projects which cover farming, food production and distribution, water resources management and social support.
ii.The funding for the aid will come from ADB’s sovereign and private sector operations. It will also use an additional $5 billion in private sector food security co-financing.
iii.Since the global food crisis of 2007-2008, ADB has provided $2 billion annually in food security investments.
ADB cuts Growth Forecast of Asia and Pacific to 4.3% from 5.2%
The ADB in its ‘Asian Development Outlook (ADO) September 2022 Update: Entrepreneurship in the Digital Age’ has revised down growth forecasts for 2022 for Developing Asia and Pacific to 4.3% from 5.2% estimated in April 2022.
- It also slashed the growth projection for 2023 to 4.9% from 5.3% projected earlier.
i.The reasons behind this downward revision are challenges arising from the Russia-Ukraine war, stronger than expected monetary tightening in advanced economies, recurrent COVID-19 lockdowns in China, and a sharp exchange rate depreciation.
ii.An inflation in developing Asia is raised to 4.5% for 2022, up from ADB’s earlier projection of 3.7%.
- The inflation forecast for 2023 is 4%, up from 3.1%.
Growth Forecast w.r.t. India:
i.ADO also lowered its growth forecast for India to 7% for FY23 from 7.2% estimated in July 2022 amid higher-than-expected inflation and monetary tightening.
- It also cut GDP (Gross Domestic Product) growth estimate for FY24 to 7.2% compared to 7.8% estimated in its supplementary outlook in July.
ii.India’s retail inflation has been at a record 7%, which is above the Reserve Bank of India (RBI) upper tolerance limits of 4-6% for eight straight months now.
- This is mainly due to higher food prices and pressure from rising global oil and commodity prices.
Recent Related News:
i.The Government of India (GoI) and the ADB signed a USD 96.3 million (around Rs 769 crores) loan agreement to provide safe drinking water, improve water supply and sanitation in Himachal Pradesh (HP).
ii.ADB and the Singapore government signed a Memorandum of Understanding (MoU) to promote investments in the Asia and Pacific region and to recognize the importance of private sector finance as well as catalysing public sector resources for sustainable and inclusive development.
About Asian Development Bank (ADB):
President– Masatsugu Asakawa
Headquarters– Mandaluyong City, Metro Manila, Philippines
Members– 68 members (49 from Asian and the Pacific and 19 outside)