Saturday, May 6 2006 13:52 Hrs (IST) - World Time -

Hyderabad: Finance Minister P Chidambaram today (May 6, 2006) asked multilateral development finance institution 'Asian Development Bank' to re-adjust its focus from public sector lending to facilitating private sector investment in member countries and reduce its loan charges.

"We believe that ADB needs to re-adjust its focus from public sector lending to a more fleet-footed financial intermediary and knowledge bank that helps developing member countries attract more private sector investment," he said at a session on ADB Board of Governors here.

Chidambaram, who chairs the Board, said higher international energy prices and golbal imbalances pose a downward risks to growth in Asia.

"The multiplier effect of ADB's assistance through a public-private partnership model would be much higher than the current approach of reliance on mostly public infrastructure projects," he said.

Despite surging oil prices and the possibility of sharp adjustments in exchange and interest rates induced by widening international payment imbalances, the finance minister expressed optimism on the outlook for growth in Asia and a healthy demand for Asian output in the next few years.

Om the initiative for monetary and financial cooperation and integration, Chidambaram asked ADB to follow an approach of consensus and inclusion rather than being exclutionary.

He said the bank's loan charges as compared to the cost of funds from other sources are critical for growth of the Manila-based institution's business.