The purpose of the creation and opening of the Asian Development Bank

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The Asian Development Bank (ADB) is engaged in one of the most important areas of modern development - the fight against poverty. It operates in a region of about 700 million people living on less than $1 a day and 1.9 billion (more than a quarter of the world's population) living on less than $2 a day.

Historical background

ADB was conceived in the 60s as a financial institution that contributed to economic growth, interstate cooperation in one of the poorest regions of the world. A resolution adopted in 1963 at a special Conference of Ministers of neighboring countries brought dreams closer to reality.

The opening of the Asian Development Bank took place on 1966-19-12. Initially, the main goal was declared to support agricultural areas. In the 60s, the organization concentrated most of its assistance in the field of food production. Manila has been chosen as the center for ADB. Takeshi Watanabe became the first president.

Asian Development Bank: purpose of creation

The financial institution has a noble mission. Organization:

• promotes sustainable economic growth in the Asia-Pacific region, in which all member countries are interested;
• plays a critical role in development processes;
• acts as a catalyst in economic and social processes;
• stimulates regional and sub-regional cooperation.

ADB works on two main fronts in the fight against poverty:

• provision of financial support for certain projects and programs to reduce poverty and ensure economic growth;
• preparation of recommendations and analysis to the governments of member countries for use in improving their policies, as well as institutions to improve the standard of living of the population.

Information policy

The Bank has developed a strategic outreach program. It defines the content of information messages, target audiences and channels for their transmission. To be effective, ADB works with various organizations and the general public.

To create strong and productive partnerships widely publicizes its activities, the motivation of the Asian Development Bank and the goals of its activities are clear and understandable. ADB Demonstrates Openness and Responsibility to Earn Trust and Stimulate Development with Active Public Participationthrough active information sharing and feedback from all stakeholders.

Structure

The Asian Development Bank is a multilateral organization with 67 member countries as shareholders, 48 from the region and 19 from other parts of the world. ADB's main instruments for assisting its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Financial activity

The bank has serious savings for investment projects. If at the dawn of its formation it operated with amounts of a little more than $1 billion, then by the 80s the fund reached $10 billion. The organization met the 21st century with an impressive capital of $50 billion.

The structure is simple: rich borrowing governments contribute to ADB's investment fund, which helps implement development projects in poor regions. Lending conditions are very attractive when compared with the commercial financial market.

Statistics

In 2015, Asian Development Bank lending totaled $15.45 billion (107 projects), technical assistance (TA) $141.30 million (199 projects) and programs financed by grants amounted to $365.15 million (17 projects).

In addition, $10.74 billion in direct co-financing was generated in the form of official loans and grants, other concessional finance and commercial co-financing. Among them:

• B class loans;
• transmission mechanismsrisks;
• guarantee co-financing;
• parallel loans;
• parallel capital;
• co-financing operations under the ADB Trade Facilitation Program.

From January 1, 2011 to December 31, 2015, ADB's annual lending averaged $12.93 billion. In addition, investment grants and TA financed by ADB and Special Fund resources averaged $580, 66M and $150.23M in TA over the same period.

In 2016, ADB operations hit an all-time high of $31.5 billion, up 17% from 2015. Institutional loans and grants for sovereign and non-sovereign operations reached $17.5 billion (up 9%), non-concessional loans amounted to $14.4 billion. Concessional borrowing exceeded $3.1 billion. Technical assistance increased by about 20% to $170 million.

Asian Development Bank: will it help Russia

Most of Russia's territory is concentrated in Asia, occupying a third of the continent. Although the Russian Federation is not one of the poorest countries, cooperation with the ADB seems logical. The issue of integration is being actively discussed while the country has observer status in the structure of the bank.

An obstacle to entry is the wary position of the main shareholders of the ADB - Japan and the United States. However, a diplomatic breakthrough in the dialogue with Japan and a change in the political and economic course of the new US administration bring closer the idea of Russia joining the structure of the bank as a donor country.

Membership will allow the RussianFederation to deepen interaction with APEC member states. Investment in programs in agriculture, support for private initiatives, assistance in the development of infrastructure projects are priorities for the Asian Development Bank, and Russia just needs co-financing of these projects.

Activities in CIS countries

ADB actively cooperates with Central Asian countries: Tajikistan, Turkmenistan, Kyrgyz Republic, Kazakhstan, Uzbekistan. Kazakhstan has been cooperating with ADB since 1994. The bank has committed $4.4 billion to the country for projects in agriculture, irrigation, education, the financial sector, transportation, and water and sanitation. The total amount of disbursed funds of the Asian Development Fund amounted to $3.74 billion.

The organization is participating in the reconstruction of 375 km of the international transit corridor in the Zhambyl region, which is almost completed. Repair of 470 km of the Aktau-Beyneu highway in the Mangistau region, which should reduce the average travel time from 12 to 4 hours, is underway.

In 2015, ADB approved a $1 billion loan to help Kazakhstan implement economic programs to combat the sharp decline in world oil prices and the economic downturn in neighboring countries. In the energy sector, it provides technical assistance in the development of a project for the modernization of heat supply networks.

Since the start of cooperation, ADB has approved six projects for the private sector in Kazakhstan for a total of $455.2 million in financing. By 2016the total balance of debt and liabilities on operations in the private sector amounted to $66.64 million. In turn, Kazakhstan became a donor of the concessional Asian Development Fund, investing $5.49 million in 2012.

Since 1996, the Asian Development Bank's programs in areas such as transport, energy, water supply and sanitation, education and finance have had a significant impact on the lives of people in Uzbekistan. The close working relationship between ADB and the government allowed the bank to double its resources in the republic in 2009. For example, a credit union program has helped bring cash flow to the most needy and low-income households, as well as small and micro businesses. The bank helped create a network of 100 credit unions with 141,000 members, with $88 million in deposits and a $107 million loan portfolio.

Women in rural communities in Uzbekistan received funds and learned the skills needed to establish successful home-based production. The initiative has helped more than 1,000 women save money, and at least 80% of them have started their own businesses later.

Subtotals

Despite the transformation of Asia into the economic engine of the planet, the real situation is ambiguous. While the work of the Asian Development Bank has contributed to reducing extreme poverty by more than half, the region is still home to 1.2 billion people who live on $3 a day, nearly 3/4 of the world's children are underweight. 600 million people are without electricity, 1.7 billionpeople do not enjoy improved sanitation. ADB has an incredible amount of work to do for the sustainable development of the world's poorest areas.