Asian Development Bank

The Asian Development Bank (ADB) is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members, 48 from the region and 19 from other parts of the globe. ADB's vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens.

The work of the Asian Development Bank (ADB) is aimed at improving the welfare of the people in Asia and the Pacific, particularly the 1.9 billion who live on less than $2 a day. Despite many success stories, Asia and the Pacific remains home to two thirds of the world's poor.

The bank was conceived with the vision of creating a financial institution that would be "Asian in character" to foster growth and cooperation in a region that back then was one of the world's poorest. ADB raises funds through bond issues on the world's capital markets, while also utilizing its members' contributions and earnings from lending. These sources account for almost three quarters of its lending operations.

Although recent economic growth in many member countries have led to a change in emphasis to some degree, throughout most of its history the bank has operated on a project basis, specifically in the areas of infrastructure investment, agricultural development and loans to basic industries in member countries. Although by definition the bank is a lender to governments and government entities, it also provides direct assistance to private enterprises and has also participated as a liquidity enhancer and best practice enabler in the private sectors of regional member countries.

The primary human capital asset of the bank is its staff of professionals, encompassing academic and/or practical experts in the areas of agriculture, civil engineering, economics, environment, health, public policy and finance. Professional staff are drawn from its member countries and given various incentives to relocate to Manila.

It is conceivable that once all of Asia-Pacific reaches a certain level of living standard the bank will be wound down or reconfigured to operate as a commercial enterprise.

Organization

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 12 members of the Board of Directors and their deputy. Eight of the 12 members come from regional (Asia-Pacific) members while the rest 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 Haruhiko Kuroda.

The headquarters of the bank is at 6 ADB Avenue, Mandaluyong City, Metro Manila, Philippines, and it has representative offices around the world. The bank employs approximately 2,400 people, coming from 55 of its 67 member countries, and with more than half of the staff being Filipino.

ADB Lending

ADB's annual project lending amounts to about US$7 billion per year with typical lending per project being in the $100 million range.

Notable ADB projects and Technical Assistance

Effectiveness

All projects funded by the Asian Development Bank are evaluated to find out what results are being achieved, what improvements should be considered, and what is being learned. This is achieved through a systematic and impartial assessment of policies, strategies, programs, and projects, including their design, implementation, and results.

There are two levels of evaluation—self evaluation and independent evaluation. All projects are self-evaluated by the relevant ADB operations department in a project completion report. ADB’s project completion reports are publicly disclosed and are available on ADB’s Internet site. Client governments are also required to prepare their own project completion reports.

A proportion of completed projects is also evaluated by ADB’s Operations Evaluation Department (OED). Since the establishment of its independence in 2004, OED has reported directly to ADB’s Board of Directors through the Board's Development Effectiveness Committee. All OED reports are publicly disclosed (some evaluations of private sector operations are redacted to protect commercially confidential information). The reports are available on OED's website.^[2] Evaluation is carried out to facilitate learning from past successes and failures, and for reasons of accountability. Increasingly, OED evaluates ongoing operations (particularly in country and sector program evaluations) and conducts a range of special studies on thematic topics and ADB policies. Evaluations are conducted in accordance with guidelines and a conflict of interest policy. Independent Evaluation at the Asian Development Bank presents a perspective of evaluation in ADB from the beginnings in 1978 and looks to a future in which knowledge management plays an increasingly important role.^[3] Learning Lessons at ADB sets the strategic framework for knowledge management in operations evaluation.^[4] Auditing the Lessons Architecture highlights the contribution that knowledge audits can make to organizational learning and organizational health.[3] Of the 1,062 ADB-funded projects evaluated and rated by OED (as of December 2006), 65% were assessed as being successful, 27% partly successful and 8% as unsuccessful.

Criticism

Oxfam Australia has criticized the Asian Development Bank of insensitivity to local communities. "Operating at a global and international level, these banks can undermine people's human rights through projects that have detrimental outcomes for poor and marginalized communities."^[5] The bank also received criticism from the United Nations Environmental Program, stating in a report that "much of the growth has bypassed more than 70 percent of its rural population, many of whom are directly dependent on natural resources for livelihoods and incomes."^[6]

The bank has also been criticized by Vietnam War veterans for funding projects in Laos, because of the United States' 15% stake in the bank, underwritten by taxes.^[7] Laos became a communist country after the U.S. withdrew from Vietnam and the Laotian Civil War was won by the Pathet Lao, which is widely understood to have been supported by the North Vietnamese Army.

Members

Names are as recognized by ADB.
The year after a member's name indicates the year of membership. The largest share holders of the ADB are Japan and USA, each holding 15.57% of the shares^[8]. At the time a country ceases to be a member, the Bank shall arrange for the repurchase of such country's shares by the Bank as a part of the settlement of accounts with such country in accordance with the provisions of paragraphs 3 and 4 of this Article.^[9]

Taiwan initially joined as "Republic of China" as a founding member representing the whole of China. However, its share of Bank capital was based on the size of Taiwan's capital, unlike the World Bank and IMF where the government in Taiwan had had a share representing the whole of China prior to the People's Republic of China joining and taking Taiwan's seat. In 1986, a compromise was effected when the People's Republic of China joined the institution. Taiwan was allowed to retain its membership, but under the name of Taipei,China — a name it protests. Uniquely, this allows both sides of the Taiwan Straits to be represented at the institution.