Developing countries in East Asia and the Pacific grew by an average of 10 per cent in calendar year 2007, consolidating the region’s role as an anchor for economic growth. The benefits have not been fully shared, however, and over half a billion people still live on less than $2 a day. Poorer countries and lagging regions of larger countries, some affected by recent conflict, need a sustained commitment to upgrade infrastructure and create an enabling environment for a growing private sector. With two of the world’s top three countries for greenhouse gas emissions – China and Indonesia – the region is contributing to climate change pressures that have consequences for the planet as a whole. During FY08, the region faced many challenges, including macroeconomic instability, particularly in Vietnam, and a devastating earthquake in China.

IFC is focusing advisory and investment services to help IDA countries and frontier regions that have not participated in the region’s growth, and we are working to address climate change. To broaden our impact in frontier markets and small states, we are strengthening our investment teams in the Pacific islands and Mekong countries, as well as Mongolia. We are working to improve investment climate, promote reform, and support private investment through innovative financing structures. In frontier regions of China and Indonesia, which have 80 per cent of the region’s poor people, IFC is using advisory services to stimulate investment in agribusiness and financing for rural areas and microenterprises. To help reduce climate pressures, we are focusing business development and product innovation work on environmental sustainability.