Asian Development Bank (ADB)13/03/2020
The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in the Ortigas Center located in the city of Mandaluyong, Metro Manila, Philippines. The company also maintains 31 field offices around the world to promote social and economic development in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries. From 31 members at its establishment, ADB now has 68 members.
The ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions. ADB releases an annual report that summarizes its operations, budget and other materials for review by the public. The ADB-Japan Scholarship Program (ADB-JSP) enrolls about 300 students annually in academic institutions located in 10 countries within the Region. Upon completion of their study programs, scholars are expected to contribute to the economic and social development of their home countries. ADB is an official United Nations Observer.
As of 31 December 2016, Japan holds the largest proportion of shares at 15.677%, closely followed by United States with 15.567% capital share. China holds 6.473%, India holds 6.359%, and Australia holds 5.812%.
Functions of the Asian Development Bank (ADB)
Economic and Social Advancement
This bank has a membership program under which there are various benefits available for the members’ countries.
These benefits include providing loan and investment at a concessional rate. One of the functions of the ADB is to provide loans and equity investments for the economic and social upgrade of developing member countries.
Most of the countries require a lot of services like advisory services. Moreover, they while operating at the international level, most of the countries require technical support too.
One of the functions of the Asian Development Bank is to provide technical assistance for the preparation and implementation of development projects and advisory services.
Firstly, the Asian Development Bank provides a lot of services to the member countries in the form of investments. At the same time, they also provide some specific sort of investment facilities for development purposes.
Support in Policies and Plans
Plans and policies play an important role in any country. There are various domestic agencies providing help to the authorities while framing various policies.
But there is a need for some international agencies at the same time for the same function. One of the main functions of the ADB is to provide help to the member countries in framing policies and plans at the international level.
Objectives of the Asian Development Bank (ADB)
- Firstly, its objective is to help the member countries in countering poverty. Hence, it helps them in poverty reduction and country development.
- If both the social as well as the economic aspects of a country is rising, then it leads to economic growth. One of the objectives is to help the countries to go towards economic growth.
- Thirdly, their objective is to support human development.
- Moreover, they believe in preserving and protecting the environment.
- Lastly, they work and wish to continue working towards empowering women and improving their status in society.
Organization of Asian Development Bank (ADB)
The highest policy-making body of the bank is the Board of Governors, composed of one representative from each member state. The Board of Governors, in turn, elect among themselves the twelve members of the Board of Directors and their deputies. Eight of the twelve members come from regional (Asia-Pacific) members while the others come from non-regional members.
The Board of Governors also elect the bank’s president, who is the chairperson of the Board of Directors and manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and because Japan is one of the largest shareholders of the bank, the president has always been Japanese.
The current president is Masatsugu Asakawa. He succeeded Takehiko Nakao on 17 January 2020, who succeeded Haruhiko Kuroda in 2013.
The headquarters of the bank is at 6 ADB Avenue, Mandaluyong, Metro Manila, Philippines, and it has 31 field offices in Asia and the Pacific and representative offices in Washington, Frankfurt, Tokyo and Sydney. The bank employs about 3,000 people, representing 60 of its 67 members.
History of Asian Development Bank (ADB)
ADB was conceived amid the postwar rehabilitation and reconstruction of the early 1960s. The vision was of a financial institution that would be Asian in character and foster economic growth and cooperation in the region then one of the poorest in the world.
A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East in 1963, set that vision on the way to becoming reality.
The Philippines capital of Manila was chosen to host the new institution, the Asian Development Bank which opened on 19 December 1966, with 31 members to serve a predominantly agricultural region. Takeshi Watanabe was the first President.
For the rest of the 1960s, ADB focused much of its assistance on food production and rural development. The next three years saw ADB’s first technical assistance, loans (including a first on concessional terms in 1969) and bond issue (in Germany).
Assistance expanded in the 1970s into education and health and then to infrastructure and industry. The gradual emergence of Asian economies in the late 1970s spurred demand for better infrastructure to support economic growth. ADB focused on improving roads and providing electricity.
When the world suffered its first oil price shock, ADB shifted more of its assistance to support energy projects, especially those promoting the development of domestic energy sources in member countries.
Co-financing operations began to provide additional resources for ADB projects and programs. 1970 saw ADB’s first bond issue in Asia worth $16.7 million in Japan.
A major landmark was the establishment in 1974, of the Asian Development Fund to provide concessional lending to ADB’s poorest members.
At the close of the decade, some Asian economies had improved considerably and graduated from ADB’s regular assistance.
It was also becoming clear that the private sector was an important ally in driving growth. ADB thus in the 1980s made its first direct equity investment. ADB also began to use its track record to mobilize additional resources for development from the private sector.
In the wake of the second oil crisis, ADB continued its support in the 1980s to infrastructure development, particularly energy projects. ADB also increased its support to social infrastructure, including gender, microfinance, environmental, education, urban planning and health issues.
In 1982, ADB opened its first field office, a Resident Mission in Bangladesh to bring operations closer to their intended beneficiaries. Later in the decade, ADB approved a policy supporting collaboration with non-government organizations to address the basic needs of disadvantaged groups in its developing member countries.
The start of the 1990s saw ADB begin promoting regional cooperation, forging close ties among neighboring countries through an economic cooperation program.
In 1995, ADB became the first multilateral organization to have a Board-approved governance policy to ensure that development assistance fully benefits the poor. Policies on the inspection function, involuntary resettlement and indigenous peoples designed to protect the rights of people affected by a project were also approved.
ADB’s membership, meanwhile, continued to expand, with the addition of several Central Asian countries following the end of the Cold War.
But in mid-1997, a severe financial crisis hit the region, setting back Asia’s spectacular economic gains. ADB responded with projects and programs to strengthen financial sectors and create social safety nets for the poor. ADB approved its largest single loan-a $4 billion emergency loan to the Republic of Korea and established the Asian Currency Crisis Support Facility to accelerate assistance.
A milestone came in 1999 when, recognizing that development was still bypassing so many in the region, ADB adopted poverty reduction as its overarching goal.
Into the 21st Century
The new century brought hope and tragedy, as well as a new focus on helping its developing members achieve the Millennium Development Goals and to enhance development effectiveness.
In 2003 saw severe acute respiratory syndrome (SARS) hit the region, making it clear that fighting infectious diseases was a public good that required regional cooperation. ADB began providing support at national and regional levels to help countries more effectively respond to HIV/AIDS and the growing threat of.
ADB had to respond to other unprecedented natural disasters, committing more than $850 million for recovery in areas of India, Indonesia, Maldives and Sri Lanka hit by the Asian tsunami disaster of December 2004 and a $1 billion line of assistance to help victims of the October 2005 earthquake in Pakistan.
As 2007 drew to a close, ADB celebrated 41 years of fruitful cooperation with the governments and peoples of the Asia and Pacific region, looking back on phenomenal economic growth in the region alongside abiding development challenges.
Now in 2008, it is looking to the future with its Strategy 2020 that will determine the organization’s future direction and vision for the next dozen years.