PRESENTATION ON ASIAN

DEVELOPMENT BANK

BY-RAGINI KHANNA

BY-RAGINI KHANNA

HISTORY

ORIGIN – 1960s• Conceived amid the post war rehabilitation and

reconstruction of the early 1960s with a vision of a financial institution

• 1963- 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

• opened on 19 December 1966; first President-Takeshi Watanabe; host nation- Manila

• The next 3 years- ADB's first technical assistance, loans and bond issue (in Germany)

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1970s

• assistance expanded into education, health, infrastructure & industry

• When the world suffered its first oil price shock, ADB shifted its assistance to support energy projects

• Co financing operations started, to provide additional resources

• 1974 - Asian Development Fund

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1980s

• made its first direct equity investment.• continued its support to energy projects due to

second oil crisis• Increased support to social infrastructure

including microfinance, environmental, education, urban planning, and health issues

• 1982- opened its first field office - a Resident Mission in Bangladesh

• also started collaboration with NGOs

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1990s

• Promoting regional cooperation through an economic cooperation program in the Greater Mekong Subregion

• In 1995, ADB became the first multilateral organization to have a Board approved governance policy to ensure that development assistance fully benefits the poor

• addition of several Central Asian countries following the end of the Cold War

• in mid-1997, a severe financial crisis hit the region, setting back Asia's spectacular economic gains; projects and programs to strengthen financial sectors and create social safety nets for the poor were launched

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Into the 21st Century

• 2003- began providing support at national and regional levels to help countries more effectively respond to HIV/AIDS and the growing threat of SARS & avian influenza

• had to respond to other unprecedented natural disasters, committing more than $850 million for recovery

• Looking forward to Strategy 2020 that will determine the organization's future direction and vision for the next dozen years

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VISION

An Asia and Pacific free of poverty• mission is to help its developing member

countries reduce poverty and improve the quality of life of their people.

• Under Strategy 2020, ADB will follow three complementary strategic agendas: inclusive growth, environmentally sustainable growth, and regional integration.

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Organization• Organizational Structure• Members refer the website-

http://www.adb.org/

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How does a country become a member of ADB?

Membership is open to• Members and associate members of the United

Nations Economic and Social Commission for Asia and the Pacific.

• Other regional countries and non-regional developed countries which are members of the United Nations or of any of its specialized agencies.

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Main

• The social and economic development of the Asian and Pacific countries.

• To boost cooperative and simultaneous

regional growth among member countries.

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FUNCTIONS

• To promote investment in the region of public and private capital for development purposes.

• To utilize the resources at its disposal for financing development of the developing member countries in the region.

• Assistance to DMCs (Developing Member Countries) to coordinate policies designed for development.

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• To provide technical assistance for the preparation, financing and execution of development projects and programmes.

• To co-operate with the international organizations and institutions, as well as national entities whether public or private to encourage the investment of development funds in the region.

• To undertake such other activities and provide such other services as may advance its purpose.

• Equity investments and loans to member nations.

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Operations

• Works in partnership with governments and public and private enterprises

• in its developing member nations

• on projects and programs

• that will contribute to economic and social development,

• based on the country's needs and priorities.

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Projects and Programs

• Supports projects in agriculture and natural resources, energy, finance, industry and nonfuel minerals, social infrastructure, and transport and communications.

• Countries with limited debt repayment capacity in the region receive additional help through the (ADF).

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ADB’s Project Cycle

• ADB consults people from all sections of society to ensure that its projects, programs, and strategies address their needs.

• Formulation of Strategy planning document.

• Regional Cooperation Strategies and Programs.

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ADB & India

ADB Membership• Joined 1966• Shares held 224,010 (6.32%)• Votes 237,242 (5.35%)o Ashok K. Lahiri is the Executive Director and Md.

Aminul Islam Bhuiyan is the Alternate Executive Director representing India on the ADB Board of Directors.

o Tadashi Kondo is the ADB Country Director for India

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Role of ADB in India –A)Relationship with ADB

• India is a founding member of the Asian Development Bank (ADB) and its fourth largest shareholder

• ADB has approved 130 loans (sovereign and nonsovereign) amounting to $20,586.5 million since 1986

• core focus of ADB’s strategy in India-poverty reduction through infrastructure-led growth

• The proposed Country Partnership Strategy (CPS) for 2009–2012 has 4 strategic pillars:

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…contd

1) support for the process of inclusive and environmentally sustainable growth;

2) catalyzing investment through the use of innovative business and financing modalities;

3) strengthening the results orientation of project design and implementation and emphasizing knowledge solutions; and

4) support for regional cooperation

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B) Impact of assistance• support for the Rural Roads Program since 2003 is helping

to improve connectivity in rural areas of five states—Assam, Chhattisgarh, Madhya Pradesh, Orissa, and West Bengal

• The Gujarat Power Sector Development Project (December 2000–March 2007) helped the government of Gujarat by establishing an appropriate legal and regulatory framework for the electricity sector

• The Gujarat Earthquake Rehabilitation and Reconstruction Project(May 2001–November 2007) has helped in reconstructing and restoring damaged infrastructure in the earthquake-affected areas of Gujarat

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…contd

• the Tsunami Emergency Assistance (Sector) Project has helped to rebuild houses, roads, bridges, ports facilities, and other public infrastructure incorporating better safety standards

• The Housing Finance II project, consisting of loans(March 2002–June 2007), provided loans to low-income households for home purchases or improvements through financial intermediaries

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C) Operational challenges India’s development needs are far larger than what all external agencies

combined can provide.• a timely resolution of a general capital increase is vital if ADB is to

continue supporting India’s development priorities effectively beyond 2009

D) Partnership• In India, ADB collaborates closely with multilateral and

bilateral development partners, such as the World Bank, United Kingdom’s Department for International Development (DFID), Japan Bank for International Cooperation (JBIC), and the European Union.

• ADB cooperates extensively with civil society organizations to strengthen the effectiveness, quality, and sustainability of the services it provides.

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E)Co financing & procurement

• Cofinancing enables ADB’s financing partners—government or their agencies, multilateral financing institutions, and commercial organizations—to participate in financing of ADB projects.

Examples • In 2008, the OPEC Fund for International Development

provided $30 mn loan co financing for the Orissa Integrated Irrigated Agriculture and Water Management Investment Program

• Commercial co financing through a B-loan amounting to $140 mn was approved for the National Highway I Panipat–Jalandhar Toll Road Project

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Projects undertaken in India

• Integrating Poverty Reduction in Programs and Projects in India.

• Capacity Building for the Clean Development Mechnism in India.

• Capacity Building for the Contract supervision and Management in NHAI.

• Capacity Development for Strengthening Implementation of social and Environmental Safeguard requirements in Projects in India.

• Securities Companies in India.

• SBI Gilts Ltd , etc….

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Achievements of the Asian Development Bank

• Funding projects led by the Utah State University to bring labor skills to Thailand.

• Technical assistance grant of US$2 million to Bangladesh to overcome the challenges linked to climate change.

• Loan of $1.2 billion to bail Pakistan out of an impending economic crisis.

• Contributions towards the development of solar energy in India.

• Earthquake and Tsunami Emergency Support Project in Indonesia.

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Asian Development Bank: Challenges

• Poverty is still one of the main challenges faced by ADB. • Safe water is still not available to 60% of the people in the

member countries.

• Improved sanitation facilities not reached 70% of the people.

• Out of every 100 children, 40 die before they reach the age of 15. Infant mortality rate is very high.

• Half of the undernourished population of the world lives in Asia.

• Rising inflation has adversely impacted growth rates in Asia