Catalog

Jump to Contents

Annual Report 1997

Introduction

NINETEEN NINETY-SEVEN was a year of massive, unanticipated turbulence for the newly industrialized economies (NIEs) and Southeast Asia’s currency and stock markets. Asia’s economic progress was set back significantly by precipitous falls in the values of currencies and stock markets that began in mid-1997. The repercussions of these disturbances are still being felt throughout the region and beyond. For most of the Bank’s members in Asia, particularly in some of the NIEs and Southeast Asian countries, the rate of economic growth fell in 1997 in relation to previous years. The outlook for 1998 has had to be revised downward sharply, not only for the afflicted economies, but for other economies of Asia as well. While the brunt of adjustment is likely to be felt in 1998 — some economies will actually contract — it may be several years before normal growth patterns reappear. The social costs of the “contagion” could be very high.

From mid-1997, the Bank monitored the rapidly unfolding situation of the region and determined appropriate Bank responses. It liaised closely with its member countries, the International Monetary Fund, the World Bank, and bilateral donors to develop its interventions. These efforts culminated in program loans to the Republic of Korea and Thailand, and a pledge of assistance to Indonesia. The loan to the Republic of Korea was the Bank’s first to this country since 1988. These loans illustrated the Bank’s ability to respond rapidly to the needs of the region. The financial sector loans to the Republic of Korea and Thailand, both from the Bank’s ordinary capital resources (OCR), boosted total Bank lending for the year to $9.4 billion, nearly $4 billion more than lending in 1996. As a result, the financial sector received nearly 50 percent of total lending.

While these extraordinary developments headed its agenda during the second half of the year, the Bank continued throughout the year with its normal country-based loan, technical assistance, and advisory operations. In these it continued to be guided by the strategic priorities identified in its Medium-Term Strategic Framework (MTSF) (1995-1998). The Bank again strove to meet five strategic objectives: promoting economic growth, reducing poverty, supporting human development, improving the status of women, and protecting the environment. It continued to consolidate its position as a broad-based development institution and not just a project financier.

In terms of number of loans, more than 60 percent were for social, environment, or growth-oriented purposes, well above the Bank target of 50 percent.

Events later in the year overshadowed some otherwise significant events in the life of the Bank. Notable among them was the review of technical assistance operations, resulting in some changes in both emphasis and practice. The most important is the intention to take a longer-term perspective in technical assistance work and to forge continuing partnerships with developing member country (DMC) agencies.

The Bank took several steps in 1997 toward establishing a workable set of indicators to measure both its own performance and that of its members. The Project Performance Management System was piloted and the Project Performance Report System was introduced.

Negotiations were concluded at a donors’ meeting in January on the sixth replenishment of the Asian Development Fund (ADF). The agreement, amounting to contributions from donors and OCR totaling $6.3 billion, was formalized in Tokyo in May.

Continuing its country outreach endeavors, the Board of Directors approved the establishment of three more resident missions (Kazakstan, Sri Lanka, and Uzbekistan) to assist in project formulation and implementation, and to improve dialogue with host governments. The Sri Lanka Resident Mission began operations in November.

The Asian Development Bank Institute opened in Tokyo in December. It will undertake research on development strategies and provide training in development management. It will identify approaches tailored to the needs of DMCs and improve their capacity for sound development management.

The Bank chaired consultative group meetings for the Cook Islands and Vanuatu, the latter the first such meeting in the country undertaken by the Bank.

The Bank’s seminal study, Emerging Asia: Changes and Challenges, published in 1997, highlighted the long-term development prospects of the region.

The 30th Annual Meeting of the Bank’s Board of Governors was held in Fukuoka, Japan, from 11 to 13 May 1997.

To read, you need Acrobat.

Contents

---