ADB’S annual lending to India to exceed US$2.5 billion by 2008

The Asian Development Bank (ADB) plans to increase its lending to India to US$2.65 billion in 2008, according to a new Country Strategy and Program Update. The level was US$1.12 billion in 2005.

“The program reflects the continuing priority of upgrading infrastructure, which accounts for more than three quarters of the three year pipeline, and gives emphasis to agriculture and rural development to create jobs and make the country’s growth more broad based,” says Tadashi Kondo, ADB Country Director in India.

Transport projects account for the bulk (36%) of ADB’s infrastructure lending pipeline, followed by urban sector operations (21%), and energy sector projects (20%).

Loans for developing the agribusiness sector, improving water resource management, strengthening commodity markets, and boosting coastal resources management account for around 11% of the program. The remaining pipeline comprises loans to assist with public resource management in Assam and West Bengal, strengthen rural finance institutions, and promote private sector participation in infrastructure.

ADB will continue to focus its development efforts on relatively weak states such as Chhattisgarh, Jammu and Kashmir, Uttaranchal, and those in the Northeast. Infrastructure operations (including urban projects and transport projects) for Uttaranchal and the northeastern states have been included in the three-year program.

ADB will also work closely with the Government in facilitating public-private partnerships on critical infrastructure such as in the transport and urban sectors. Workshops and roadshows will be organized to encourage private sector participation, both domestic and foreign.

India’s high growth, which reached almost 7% in 2004, is expected to be maintained over the next two years. But achieving the Government’s target of 8% growth depends critically on upgrading infrastructure as well as improving agricultural growth. The Government is thus giving high priority to programs such as Bharat Nirman, National Highway Development Program, Pradhan Mantri Gram Sadak Yojana (or the Rural Roads Development program), Power for all by 2012, and the National Urban Renewal Mission.

CSPU 2005 takes concrete steps to increase the relevance, responsiveness, and results-orientation of ADB’s India program by focusing on improving project readiness, project implementation, and capacity building.

A grant technical assistance facility (US$15 million each in 2006 and 2007) is being created to undertake detailed project design and engineering studies so that projects are fully prepared and ready to award contracts by the time they become effective. Regular sector portfolio reviews being organized by ADB and the Department of Economic Affairs, Ministry of Finance, will help in removing implementation bottlenecks, promote cross-learning and transfer of best practices across states and executing agencies.

Workshops will be organized to strengthen relatively weak capacity executing agencies in ADB’s partner states and to familiarize their staff with ADB’s policies and procedures. A workshop focusing on the Northeastern states was recently organized by ADB and DEA in Guwahati.

ADB’s recently approved Innovation and Efficiency Initiative (IEI) allow multi-tranche lending, increase flexibility in cost sharing arrangements, expand the list of expenses eligible for ADB financing, and allow subsovereign and nonsovereign public sector financing. Procurement processes and safeguard requirements are also being streamlined under the IEI program. The IEI reforms are already being incorporated into the India program. The recently negotiated Rural Roads Sector II project (US$750 million) will offer multi-tranche financing.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members – 46 from the region.

Asian Environment Outlook (AEO) 2005

Green investments and products offer the promise of strong business and job opportunities in Asia and the Pacific, according to a report released by ADB.

The report, Asian Environment Outlook (AEO) 2005, estimates the global market in 2005 for environmental goods and services to be about US$600 billion, and projects this market will expand to more than US$800 billion by 2015. Out of this burgeoning market, Asia and the Pacific accounts for US$37 billion. With a growth rate of 8-12% - the fastest in the world - the regional market is expected to triple to US$100 billion by 2015.

“We now see that governments across our region — from India, to Thailand, to the People’s Republic of China — are increasingly ready to take on environmental challenges. Enforcement of pollution control laws is tightening, budgets for environmental protection are increasing, and judiciaries are taking tougher stances,” said Nessim Ahmad, Director of ADB’s Environment and Social Safeguards Division.

“The improved environmental quality demanded by the public will require investment in wastewater treatment, solid waste management, sustainable public transport, and clean, renewable energy systems - all of which are critical to the economic and environmental future of the region.”

He added that consumers are also demanding greener and more environment friendly products. “While not all firms will be able to benefit from the expected boom in environmental investments, most should have an opportunity to gain from environmentally-based product differentiation if they recognize this and act,” he said.

Ahmad was presenting the key findings and conclusions of AEO 2005 during a keynote address at the 6th Asia-Pacific Roundtable for Sustainable Consumption and Production, in Melbourne today.

Subtitled Making Profits, Protecting our Planet: Corporate Responsibility for Environmental Performance in Asia and the Pacific, the report is ADB’s second Asian Environment Outlook. The first, released in 2001, centered on the need to better integrate environmental considerations into economic and sectoral policies and programs.

While there has been some progress in recent years, AEO 2005 argues that there is a critical missing ingredient in the pursuit of a sustainable future for Asia and the Pacific - that of a fully engaged private sector. While governments determine the rules under which businesses act, the firms themselves use natural resources, make products, and generate pollution. A sustainable future for the region - and the rest of the planet - is not possible without greater corporate engagement and environmental responsibility.

“Industry, government, and communities must come together to collaboratively solve environmental problems,” Ahmad added, “The key is for governments to give the private sector the incentive and flexibility to find low-cost ways to meet agreed environmental management objectives.”

Fortunately, the time is right for this transition to sustainability because market and social forces are creating new incentives for corporate attention to the environment, he points out. “We all have our roles to play in furthering this transition, and the time to act is now - so that a sustainable future for Asia and the Pacific may be secured.”

For further information about AEO 2005, contact: David McCauley, Senior Environmental Economist, Regional and Sustainable Development Department, Asian Development Bank. Email: dmccauley@adb.org  

The Pope

Pope Benedict XVI (Latin: Benedictus PP. XVI; Italian: Benedetto XVI; German: Benedikt XVI), born Joseph Alois Ratzinger (16 April 1927 in Marktl am Inn, Bavaria, Germany), is the 265th and reigning pope, the head of the Catholic Church and sovereign of Vatican City State. He was elected on 19 April 2005 in a papal conclave over which he presided in his capacity as Dean of the College of Cardinals. He celebrated his Papal Inauguration Mass on 24 April 2005 and took possession of his cathedral, the Basilica of St. John Lateran, on 07 May 2005.

One of the best-known theologians since the 60s and author of many books, he is viewed as a close conservative ally of his predecessor, Pope John Paul II. He served as a professor at various German universities, and was a theological expert at the Second Vatican Council before becoming Archbishop of Munich and Freising, and on his election as Pope was Prefect of the Congregation for the Doctrine of the Faith and Dean of the College of Cardinals.

In response to an increasing de-Christianization in many developed countries, where secular humanism, secularism, and secularization are on the rise, the Pope particularly emphasizes what he sees as a need for Europe to turn back to its fundamental Christian values.

Indo-Dutch Cooperation

Dutch Minister of State for Defence Cees van der Knaap was in India for a day’s visit on 09 December 2005. In India, he met a.o. B.K. Handique, Minister of State of Defence Production, and Admiral Arun Prakash, Chief of the Naval Staff. He was accompanied by officials of the Netherlands Ministries of Defence and Economic Affairs, and representatives of five Dutch companies active in the defence sector. The Minister of State also had a briefing by Indian experts regarding Indian Naval Equipment.

The Netherlands has a number of leading companies specializing in naval construction and technology. The Minister explored possibilities of cooperation between the Indian navy and Dutch enterprises. In a briefing, Van der Knaap mentioned that India is an important power with an economic growth of approx. 8 percent. India’s ambition of developing its navy includes building aircraft carriers and modernizing other defence equipment, and the Netherlands has very good experience in this area with a.o. THALES, a Dutch company involved in development of defence equipment and fleet-modernization. The minister mentioned that there was interest from the Indian side, and he stressed that India wanted to cooperate in the naval industry instead of just buying knowledge. The Netherlands will be involved in the transfer of knowledge of core competencies for development and not so much in production since the personnel costs in India are lower and the experience of engineers and technicians (who, in many cases, have studied abroad) are high. Asked about cooperation in nuclear technology, the minister mentioned that the purpose of his visit was closely connected with defence issues, especially possibilities in the naval industry, and that nuclear technology was outside the scope of the visit, although the Netherlands is member of the nuclear suppliers group. On Indo-Dutch defence collaboration he mentioned that there were certain areas/core competencies, but India has to decide what it wants to do with it. Dutch industries are experts in the naval industry and radar systems, which could be relevant for India as a blue water naval force.

Earlier, Dutch Deputy Prime Minister and Minister of Economic Affairs Laurens Jan Brinkhorst visited India in October along with a high-level business delegation that resulted in the signing of six MOUs.

Devastating Katrina

Hurricane Katrina was the eleventh-named tropical storm, fourth hurricane, third major hurricane, and the first Category 5 hurricane of the 2005 Atlantic hurricane season. It was the third most powerful storm of the season, behind Hurricane Wilma and Hurricane Rita, and the sixth-strongest storm ever recorded in the Atlantic basin. It first made landfall as a Category 1 hurricane just north of Miami, Florida on 25 August 2005, resulting in a dozen deaths in South Florida and spawning several tornadoes, which happened not to strike any dwellings. In the Gulf of Mexico, it strengthened into a formidable Category 5 hurricane with maximum winds of 175 mph and a minimum central pressure of 902 mbar. It weakened considerably as it was approaching land, making its second landfall on the morning of August 29 along the Central Gulf Coast near Buras-Triumph, Louisiana with 125 mph winds and a central pressure of 920 mbar — a strong Category 3 storm (having just weakened from Category 4 as it was making landfall).

The sheer physical size of Katrina caused devastation far from the eye of the hurricane; it was possibly the largest hurricane of its strength ever recorded, but estimating the size of storms from before the 1960s (the pre-satellite era) is difficult to impossible. On August 29, its storm surge breached the levee system that protected New Orleans from Lake Pontchartrain and the Mississippi River. Most of the city was subsequently flooded mainly by water from the lake. Heavy damage was also inflicted onto the coasts of Mississippi and Alabama, making Katrina the most destructive and costliest natural disaster in the history of the United States and the deadliest since the 1928 Okeechobee Hurricane.

The official combined (direct and indirect) death toll stands at 1,383 — the fourth or fifth highest in U.S. history (behind the Galveston Hurricane of 1900, the Okeechobee Hurricane of 1928, the 1893 Sea Islands Hurricane, and possibly the 1893 Chenier Caminanda Hurricane). As of 20 December 2005, more than 4,000 people remain unaccounted for, so the death toll may still grow. As of 22 November 2005, 1,300 of those missing were either in heavily-damaged areas or were disabled and “feared dead”; if all 1,300 of these were to be confirmed dead, Katrina would surpass the Okeechobee Hurricane and become the second-deadliest in US history and deadliest in over a century.

Over 1.2 million people were under an evacuation order before landfall. In Louisiana, the hurricane’s eye made landfall at 6:10am CDT on Monday, August 29. After 11:00 am CDT, several sections of the levee system in New Orleans collapsed. By early September, people were being forcibly evacuated, mostly by bus, to neighbouring states. More than 1.5 million people were displaced — a humanitarian crisis on a scale unseen in the U.S. since the Great Depression. The damage is estimated to be about US$75 billion by the NHC (with other estimates ranging from US$40 to 120 billion), at least double the previously most expensive Hurricane Andrew, making Katrina the most expensive natural disaster in U.S. history.

Federal disaster declarations blanketed 233,000 sq km of the United States, an area almost as large as the United Kingdom. The hurricane left an estimated 3 million people without electricity, taking some places several weeks for power to be restored (but faster than the four months originally predicted). On September 03, Homeland Security Secretary Michael Chertoff described the aftermath of Hurricane Katrina as “probably the worst catastrophe, or set of catastrophes” in the country’s history, referring to the hurricane itself plus the flooding of New Orleans.

The Federal Emergency Management Agency (FEMA) set a deadline of 07 February 2006 (extended from January 07) as the official end of any further coverage of temporary housing costs for Katrina victims. After the February 07deadline, Katrina victims will be left to their own devices to either find permanent housing for the long term, or to continue in social welfare programs set up by other organizations. There are hundreds of thousands of Katrina evacuees living in temporary shelters and/or trailer parks set up by FEMA and other relief organizations in the first months after the disaster hit.

First Woman Chancellor of Germany

Dr. Angela Dorothea Merkel is the current Chancellor of Germany. As a member of the Christian Democratic Union (CDU), she leads a coalition with its sister party, the Christian Social Union (CSU), and with the Social Democratic Party of Germany (SPD). The coalition was formed after two months of negotiations following the 2005 federal election.

Merkel, elected to the German Parliament from Mecklenburg-Western Pomerania, has been the Chairwoman of the CDU since 2000, and Chairwoman of the CDU-CSU parliamentary party group from 2002 to 2005. She is the first female Chancellor of Germany, the first former citizen of the GDR to lead re-unified Germany, and the first woman to lead Germany since it became a modern nation state in 1871.

Kashmir Earthquake

Also known as the Northern Pakistan earthquake or South Asia earthquake, the Kashmir earthquake of 2005 was a major seismological disturbance (earthquake) that occurred at 08:50:38 Pakistan Standard Time (03:50:38 UTC, 09:20:38 India Standard Time, 08:50:38 local time at epicenter) on 08 October 2005 with the epicenter in the Pakistan-administered region of the disputed territory of Kashmir in South Asia. It registered 7.6 on the moment magnitude scale making it a major earthquake similar in intensity to the 1935 Quetta earthquake, the 2001 Gujarat Earthquake, and the 1906 San Francisco earthquake.

As of November 08, the Pakistani government’s official death toll was 87,350. Some estimate that the death toll could reach over 100,000.

Most of the affected areas are in mountainous regions and access is impeded by landslides that have blocked the roads. An estimated 3.3 million were left homeless in Pakistan. The UN reported that more than 4 million people are directly affected, as winter snows start. Many of them are at risk of dying from cold and the spread of disease. Prime Minister Shaukat Aziz made an appeal to survivors on October 26 to come down to valleys and cities for relief. It has been estimated that damages incurred are well over US$5 billion. Three of the five crossing points have been opened on the Line of Control (LoC) between India and Pakistan.

New Sri Lankan President

Percy Mahendra ‘Mahinda’ Rajapaksa is the incumbent President of the Democratic Socialist Republic of Sri Lanka. Rajapaksa has also served as the country’s Prime Minister from 06 April 2004 to 21 November 2005.

End of a dynasty?

Chandrika Bandaranaike Kumaratunga was the 5th President of Sri Lanka and the 4th Executive President of Sri Lanka (12 November 1994 – 19 November 2005). She is the leader of the Sri Lanka Freedom Party. Her father, Solomon Bandaranaike, was a government Minister at the time of her birth and later became Prime Minister — he was assassinated in 1959 when Chandrika was fourteen. After his death, his wife (Chandrika’s mother) Sirimavo Bandaranaike became the world’s first female Prime Minister in 1960.

President Kumaratunga unsuccessfully attempted to stay in office until late 2006, according to the argument that, since the 1999 Presidential Election was held a year early, she should be allowed to serve that left-over year (Sri Lankan Presidential terms are for six years), but this was rejected by the Supreme Court and Kumaratunga’s term ended in November 2005. The 13th Prime Minister of Sri Lanka, Mahinda Rajapaksa, was elected to succeed her as President of Sri Lanka not only as her SLFP’s candidate but also as the popular candidate supported by the UPFA and more than 25 other political parties of the country.

India was President Rajapaksa’s first overseas port of call (December 2005) since assumption of office and is evidence of the growing importance being attached to bilateral relations by the government and people of both countries.