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  1. 1. ADB (Asian Development Bank) Type: Non-governmental organization providing funding and technical assistance throughout the Asian region. Brief Overview The Asian Development Bank, a multilateral development finance institution, was founded in 1966 by 31 member governments to promote the social and economic progress of the Asian and Pacific region. Over the past 31 years, the Bank's membership has grown to 57, of which 41 are from within the region and 16 from outside the region. The Bank gives special attention to the needs of the smaller or less-developed countries and priority to regional, sub regional and national projects and programs. The Asian Development Bank (ADB) is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly known as the United Nations Economic Commission for Asia and the Far East) and nonregional developed countries. From 31 members at its establishment, ADB now has 67 members of which 48 are from within Asia and the Pacific and 19 outside. ADB was modelled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with member's capital subscriptions. By the end of 2012, both the United States and Japan hold the two largest proportions of shares each at 12.78%. China holds 5.45%, India holds 5.36%. 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 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 most recent president was Takehiko Nakao, who succeeded Haruhiko Kuroda in 2013. 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 3,051 people, of which 1,463 (48%) are from the Philippines. Lending The ADB offers "hard" loans from ordinary capital resources (OCR) on commercial terms, and the Asian Development Fund (ADF) affiliated with the ADB extends "soft" loans from special fund resources with concessional conditions. For OCR, members subscribe capital, including paid-in and callable elements, a 50 percent paid-in ratio for the initial subscription, 5 percent for the Third General Capital Increase (GCI) in 1983 and 2 percent for the Fourth General Capital Increase in 1994. The ADB borrows from international capital markets with its capital as guarantee. In 2009, ADB obtained member-contributions for its Fifth General Capital Increase of 200%, in response to a call by G20 leaders to increase resources of multilateral development banks so as to support growth in developing countries amid the global financial crisis. For 2010 and 2011, a 200%
  2. 2. GCI allows lending of $12.5-13.0 billion in 2010 and about $11.0 billion in 2011. With this increase, the bank's capital base has tripled from $55 billion to $165 billion. ADB performs the following functions: (i) Promote investment in the region of public and private capital for development purposes. (ii) Provide loans for the economic and social development of the member countries of the region. (iii) Help member countries in coordinating their development policies and plans. (iv) Provide technical assistance for the preparation, financing and execution of development projects and programmes. (v) Undertake such other activities and provide such other services as may advance its objectives. (vi) Provide financial and technical assistance to member countries for environmental protection. (vii) Act as financial intermediary by transferring resources from global capital markets to developing countries. (viii) Support public resource mobilisation and management to member countries. Funds ADB was set up with an authorised capital of US$ one billion which was later on raised to $21.6 billion. Japan, India, China, USA, Canada and Germany are the main subscribers. Management ADB is administered by a Board of Directors which is elected by the Board of Governors. The Board has 12 members of which 8 represent regional members and 4 represent non-regional members elected for two years' term. The Board of Directors normally meets once in a week and exercises all the powers. The president is elected by the Board of Governors for a term of five years. Progress ADB has invested considerably in agriculture, agro industry, energy, transport, communication, social infrastructure, etc. It provides equity finance and underwriting facilities. It has provided an assistance of more than 50 billion dollars since its beginning. The Bank has contributed significantly to economic development and living standards in Asia. The ADB's operational strategy for India is to ensure higher sustainable economic growth so as to reduce poverty and promote employment. The bank encourages private sector investment in India through an improved incentive framework. It seeks to improve policy, institutional and regulatory framework so as to improve the efficiency of public sector undertakings. It provides support for resource mobilisation and management at the state level. ADB has given much importance to rural development in India.