April 1 (Bloomberg) -- Haruhiko Kuroda probably doesn’t envy Edward Liddy these days. And yet the Oxford-trained economist is doing a far more difficult and important job.

As president of the Manila-based Asian Development Bank, Kuroda is looking after the wellbeing of 3.6 billion people. He’s at the core of efforts to keep hundreds of millions from sliding into poverty as economies crash. This, after all, is a region on which the world is depending for future growth.

We can obsess all we want about the American International Group Inc. bonus scandal and Chief Executive Officer Liddy’s handling of it. We can even pretend the White House’s dismissal of General Motors Corp. CEO Rick Wagoner is a big deal for global growth. All this pales in comparison with the losses Asia may experience over the next 12 months.

“This year will be a most difficult one for developing nations,” Kuroda says in his office overlooking one of Asia’s most cacophonous cities.

Officials from the Group-of-20 nations meeting in London tomorrow should take such views to heart. Their focus will be on getting the U.S. and other major economies moving again. Ample time also must be spent finding ways to shield poorer nations from the financial exploits of rich ones.

Increasing pain is inherent to the ADB’s forecast that Asia, excluding Japan, will grow 3.4 percent this year, less than half of a September estimate of 7.2 percent. It means 60 million more Asians will live on less than $1.25 than would have been the case if growth had stayed at 2008 levels. By 2010, the number rises to 100 million -- greater than the population of the Philippines.

Less Than $2

Those figures don’t account for the vast -- and at this point unknowable -- number of Asians living on less than $2 a day. It’s a sobering reminder that investors betting on economies such as Indonesia, the Philippines, Thailand or Vietnam may have a more difficult time eking out profits.

The trouble is, today’s forecasts are predicated on expectations that the massive stimulus efforts from the U.S. to China will work. Kuroda hopes the U.S. slump will bottom out in the second half of the year and a recovery there will translate into faster global growth in 2010. If that happens, he says, Asia’s suffering will be limited.

It’s a very big “if.” Asia went into this crisis with limited exposure to the toxic debt in the richest nations. Its vulnerability has proven to be the less direct channels of falling export demand and plunging stocks.

Getting Dicey

The longer the U.S. economy sinks, or just walks in place, the more Asia will suffer. It heightens the need for Asia to retool economies. That’s where things get dicey.

Central banks can cut interest rates, though the benefits of monetary policy are limited with credit markets misbehaving. Governments need to increase public spending in a big way to boost domestic consumption. It’s also time to create more small- and medium-sized enterprises and service industries.

Urging leaders to do the right things amid the slowest growth since 1998 is one thing. Making sure they don’t shoot their economies in the foot with wasteful, corruption-prone largess is quite another. Public money must be used productively.

Social chaos can’t be ruled out. Tensions rose across Asia last year amid surging food and oil prices. That could be a harbinger as more factories are shut. Unrest would damp investment and growth and distract governments from rebalancing economies for the long run.

Asian Paradox

You start to see the magnitude of the task, and how the world should spend more time rooting for Kuroda than obsessing over Liddy and GM. The ABD, like the International Monetary Fund, will need more resources to succeed. Member nations must come up with more cash.

It’s quite a paradox that the region with the greatest potential is home to many of the world’s weakest economic links. Asia also finds itself in the dubious position of relying on another developing economy: China.

Expectations run high that China can avoid the worst of the global recession. The ADB expects it to expand 7 percent this year, down from a September forecast of 9.5 percent. That will prove too optimistic if U.S. growth doesn’t rebound.

Poverty isn’t something to which many investors who lost money on GM or AIG pay much attention. Yet in a world in which rapid-growth regions are scarce, Asia stands out. The key is maintaining growth and spreading its benefits. Only then will savers become stable consumers and reduce global imbalances.

The unwinding of assets at AIG is important. To hear U.S. Treasury officials tell it, letting AIG fail would be like letting several Long-Term Capital Managements crash at once. Hence the $183 billion of bailouts that the U.S. government lavished on a single company.

Perhaps. Keeping Asia on the right path is even more important in the long run. The G-20 would be wise to remember that and act accordingly.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: William Pesek in Manila at wpesek@bloomberg.net

Last Updated: March 31, 2009 15:00 EDT