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Annual Report 1998

Introduction

Nineteen ninety-eight was a difficult and damaging year for Asia's economies. Following 1997's precipitous falls in the currency and equity markets of the newly industrialized economies and Southeast Asian countries, toward the end of 1998, currencies generally stabilized and stock markets recovered. However, throughout the Asian and Pacific region economic growth was sharply curtailed, and the economies of several countries, notably Indonesia, contracted. The social costs of the Asian financial crisis became evident, and could yet increase further. Throughout 1998, the Bank devoted much of its energy to responding to Asia's unhappy and unprecedented circumstances. It liaised closely with its members, as well as with the International Monetary Fund, the World Bank, and other multilateral and bilateral agencies to develop and effect the most appropriate responses.

The Bank continued to emphasize its five strategic objectives: promoting economic growth, reducing poverty, supporting human development, improving the status of women, and protecting the environment. However, the sharp change in the socioeconomic environment and outlook meant reconsideration of the ways of realizing the objectives and of the balance among them. It meant, in particular, more detailed and extensive work in the areas of financial market regulation and reform, and of governance. In all its activities, the Bank further consolidated its position as an institution that provides a broad range of services and advice to its members, not just financial resources, to help them restore or improve the living standards of their peoples.

Total lending in 1998 amounted to about $6 billion for 57 projects, compared with $9.4 billion the previous year when lending had been boosted by an exceptionally large financial sector program loan of $4 billion to the Republic of Korea. The financial sector again received the largest share of lending (nearly $1.7 billion). Borrowings amounted to $9.6 billion, the largest ever in one year.

Cofinancing mobilized from all sources amounted to about $3 billion for 24 projects--including $950 million for Thailand's Export Financing Facility--close to 50 percent of the Bank's total lending. This level of cofinancing,

Also during the year, Tajikistan joined the Bank, bringing the number of members to 57; and the Board of Governors approved the membership application of Turkmenistan.

The Sri Lanka Resident Mission, which commenced operations in October 1997, was opened officially by the Bank's President in 1998. The Kazakhstan and Uzbekistan resident missions began operations in 1998. The Bank chaired consultative group meetings for Kiribati, Marshall Islands, and Federated States of Micronesia.

The 31st Annual Meeting of the Board of Governors was held in Geneva, Switzerland from 29 April to 1 May 1998.

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