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Asian Bank Urges Private Involvement in Environmental Protection

The Asian Development Bank is warning that the economic growth that is lifting millions out of poverty in Asia is also devastating the region's environment. The bank on Wednesday said the private sector should have a greater role in environmental protection, as rapid expansion in China and other nations continues to put pressure on natural resources.

Asia Development Bank vice president Liqun Jin spoke to environment ministers from China, Cambodia, Laos, Burma, Thailand, and Vietnam. The officials were meeting in Shanghai to talk about ways to reverse problems such as deforestation and declining air and water quality.

Mr. Jin said nations have traditionally relied on government intervention to manage the environment and have overlooked the role of the private sector, which, through market-based incentives, could contribute to the financing and implementation of conservation programs.

For China, which is still changing from a command economy to a free-market system, there is a big challenge ahead as the government continues to exercise strict control over environmental policy.

Xu Jintao is a professor of environmental economics and deputy director of the Center for Agricultural Policy at the Chinese Academy of Sciences in Beijing. He believes the rising influence of the private sector in China's fast-growing economy will inevitably lead to involvement in environmental matters.

"The private sector is a major driver of this economic growth," he said. "In the future, the private sector might be an even more important player in China's economy. If the private sector does not protect China's environment, it will be very, very bad."

In addition to allowing greater private-sector participation, analysts say Beijing should do more to attract foreign waste-water treatment firms and others with specialized knowledge to China's conservation efforts.

But Asia Studies Director Elizabeth Economy, of the Council of Foreign Relations research organization in New York, says some international corporations are leery of entering into agreements with local Chinese governments, which in some highly publicized cases have reneged on their contracts.

"Until China fully moves forward in the area of rule of law and until international investors can trust that Chinese local governments are going to honor their agreements, I think it is going to be difficult to get foreign investors to really move forward in this area," she said.

The Asian Development Bank says there are big monetary incentives for private corporations looking for opportunities in sustainable development. In his remarks Wednesday, the bank's vice president cited recent studies that estimate the value of ecological services in Asia is rising to $50 billion this year, up from $19 billion in 1996.