ADB boosts Asia-Pacific food security financing to $14bn

MANILA: The Asian Development Bank will provide $14 billion in loans over four years to help poor countries improve food security as prices soar and climate change bites, the Philippines-based lender said Tuesday.

The bank, which provides loans and grants for projects in the poorest countries in the Asia-Pacific region, said the financing would target among other things food production and distribution, and climate mitigation.

“Food insecurity is threatening to reverse decades of development progress in Asia and the Pacific,” ADB president Masatsugu Asakawa told reporters in a virtual news conference

Asakawa said there are many factors for the “worsening situation” including Russia’s invasion of Ukraine and the Covid-19 pandemic, which have disrupted supply chains and helped push food prices to “record highs”.

“We also have to keep in mind that the current food security crisis will get even worse if we fail to address climate change,” Asakawa said.

He added that the battle against a warming planet would be “won or lost in Asia and the Pacific”.

The bank, which has 49 members stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, usually allocates $2 billion a year for food security loans.

That is expected to reach $3.3 billion this year, and $10.7 billion from 2023 to 2025, ADB said.

It estimates nearly 1.1 billion people in the region “lack healthy diets due to poverty and food prices”.

The announcement comes after the bank recently cut its 2022 growth forecast for the region, to 4.3 percent from its April projection of 5.2 percent.

ADB warned of significant risks for the region’s outlook as central banks around the world struggle to rein in inflation and recurrent lockdowns in China hammer the world’s second-largest economy.

The bank also raised its inflation forecast to 4.5 percent from 3.7 percent.