TWO-FRONT EFFORT

TWO-FRONT EFFORT

After more than 30 years as a key catalyst of regional economic development, the Asian Development Bank is adopting a sharp change in strategy: It is cutting poverty instead of simply financing projects. The shift could affect trade and transport by altering the makeup of what's needed and where it comes from, but on balance will prove helpful as well as desirable.

The Manila-based ADB, Asia's primary development finance agency, said decades of economic growth were wiped out by the last two years of regional financial crisis and that the poor bore the brunt.''We are refocusing our work with the single, overarching goal of eliminating poverty from the region,'' said bank President Tadao Chino. ''Without extending economic benefits to the poor, the region's development simply cannot be sustained. We shall continue to support economic growth in a way that maximizes its contribution to reducing poverty.''

Translated by another official, the new policy comes down to more farm-to-market roads and fewer expressways, more rural electrification and fewer big power plants.

There's no need for too much self-flagellation, though. Since its inception in 1966, the ADB has contributed mightily to the region's infrastructure and overall development by making finance available for projects large and small from the vast Indian subcontinent to tiny Pacific islands.

Countries that in the 1960s were barely out of - or even into - the human-hair wig and cheap plastic toy era have become economic powerhouses. They sell in great quantities to the United States and other Western markets, but they also buy great amounts of increasingly high-tech equipment and knowledge from those markets.

Fewer expressways and mammoth power plants could mean less demand on ships for some goods, and for the consultants needed to devise products and pummel them into operation. Against that, what the poorest need also has to be moved in quantity; the West maintains the technological lead that should be tapped in the quest to improve lives. Good-quality advice, of course, is always needed.

Chino noted that almost 70 percent of the world's poor - that's about 900 million people - live in the Asia-Pacific region. ''At least one of every three Asians has no access to safe drinking water. Problems of illiteracy and malnutrition persist in the region. Many areas lack an adequate social safety net which protects the poor and prevents the vulnerable from being adversely affected by development.''

That would seem to open up big opportunities for nimble companies with bright ideas.

The ADB finances about $6 billion worth of projects and programs annually. But only about 3 percent of public lending went to specifically identified poverty reduction projects in 1991-98. The agency intends to set aside at least 40 percent of public-sector lending for poverty intervention by 2001, and more after that.

Almost overlooked in the change of philosophy was a move that could prove even more decisive. Senior officials, business leaders and civic groups from 30 developing and industrialized countries agreed to launch a coordinated drive against corruption in the Asia-Pacific region, where malpractice is partly blamed for triggering the financial crisis.

More than 160 participants from members of the ADB and the Organization for Economic Cooperation and Development pledged to create a permanent forum to fight graft. Priority measures include strengthening state institutions by improving enforcement and monitoring, helping independent investigative and judicial bodies, building public and private partnerships and encouraging society and media to galvanize community action.

World Bank estimates are that $80 billion is paid in bribes yearly in developing countries; other agencies put the figure at $250 billion worldwide. The Paris-based OECD, the club of 29 industrialized economies, makes corruption a criminal offense, as does U.S. law. But the scourge remains to a greater or lesser degree.

Preliminary talks are under way for key ''clean'' economies such as Singapore, Hong Kong and Malaysia to accede to the OECD convention. Their lead would put peer pressure on others - like Indonesia, Thailand and the Philippines - if only to maintain their appeal to overseas investment.

Bribery and other under-the-table dealings hurt everyone, not least the poor. U.S. companies often complain they are at a serious disadvantage because national law doesn't allow them to do what many competitors in Europe, Asia and elsewhere regard as normal practice.

The U.S.-OECD approach is undeniably the right one, and the ADB is to be applauded for including this in its quiver of arrows to use against poverty. A cleaner business environment would help the producers, shippers, carriers, logistics operators and end-users more than almost anything else.