A
ADBBO ADB Business Opportunities ADBI (See
Asian Development Bank Institute.)
AED (See
Agriculture and Social Sectors Departments.)
AFG Afghanistan Agriculture and Natural Resource Research Policy The Policy on Agriculture and Natural Resource Research identifies new challenges in this field. Despite impressive accomplishments in agricultural research—that have enabled rice production in developing member countries (DMCs) to double and wheat production to quadruple in the past three decades—poverty and population pressures persist, while land and water resources are becoming increasingly scarce and degraded.
The policy has identified the following areas as the focal points of ADB support: enhancing food security at the household level, ensuring sustainable management of agriculture and natural resources, and raising productivity in the agriculture sector to generate employment for the rural poor and income for poor small-holders and sharecroppers.
In relation to farming systems for poor farmers, the multidisciplinary aspects of these systems and the social, economic, and environmental appropriateness of technologies to be adopted are emphasized. Assistance to both international and national agricultural research centers is encouraged. A recent study done by ADB’s Operations Evaluation Department has shown that large economic benefits have been derived from ADB’s investments in agriculture and natural resource research. Agriculture and Natural Resource Sector ADB’s strategy is to manage sustainably the natural resource base for the benefit of the population, particularly for the poor. Catalyzing a self-sustaining rural development process and supporting an empowerment process for those who are disadvantaged—especially women and the poor—are the key ingredients in the strategy. It also emphasizes linking natural resources, agriculture, and rural development assistance with a developing member country’s overall program of reducing poverty; solving economic, social, and environmental problems; and ensuring that ADB’s investments support the country’s macro-economic framework. At the project level, clear identification of objectives and priorities, identification of target groups, participation of the intended beneficiaries in project design and implementation, and institutional capacity building are paramount for successful project performance. Similarly, working in partnership with civil society, nongovernment organizations (NGOs), and other development agencies is vital to the sector’s further development.
ADB’s overall strategy in agriculture reflects a long-term commitment to improving the planning and policy/regulatory capabilities of central government institutions while reducing dependence on them by promoting market efficiency, private sector participation, decentralization, and sustainable use of natural resources. Increasing productivity to improve incomes is the most effective direct measure for combating poverty in rural areas, where the majority of the poor live and work. In the public sector, loans and technical assistance focus on facilitating policy reforms; strengthening the institutions involved in agriculture, water, and forestry work; and improving the physical infrastructure for irrigation and farm-to-market links. At the community level, ADB operations focus on improving the participation and empowerment processes of users in managing resources; on developing local capacity (including support for NGOs, community-based organizations, and public-private partnerships); and on improving the delivery of services, especially for the poor.
(See also Lending; and Sectors and Subsectors) Agriculture and Social Sectors Departments (See
Departments and Offices.)
Aid Coordination ADB’s developing member countries (DMCs) receive funds from many bilateral and multilateral agencies other than ADB. ADB considers coordination with these agencies important for maximizing the use of scarce development resources and for avoiding duplication and fragmentation of external funding efforts.
Aid coordination is necessary for sharing resources, expertise, and experiences, and ensuring that development efforts are complementary. To strengthen DMCs’ ownership of the development process, aid coordination should be the primary responsibility of DMCs and be effected through institutionalized consultative forums and ad hoc consultations sponsored by DMC governments.
ADB is continuing its efforts to strengthen its borrowers’ capacities in coordinating aid activities effectively. ADB takes a lead role in aid coordination in some sectors and in the Pacific subregion, and coordinates closely with the World Bank and the International Monetary Fund (IMF) in monitoring macroeconomic developments in ADB’s DMCs. ADB has been participating actively in the international dialogue on the role of multilateral development banks and the Bretton Woods institutions, and continues to play an active role in the global debate on aid and the best ways to use it for DMCs’ changing needs.
ADB is not a member of the United Nations (UN) family of organizations, although the Economic and Social Commission for Asia and the Pacific (ESCAP) and the UN Secretary-General played lead roles in establishing ADB. The United Nations Development Programme (UNDP) funded the cost of preparatory arrangements that led to the establishment of ADB.
The Articles of Agreement Establishing the Asian Development Bank (Charter) provide for cooperation between ADB and international organizations concerned with the investment of development funds in Asia and the Pacific. ADB maintains close working relationships with the World Bank group, IMF, specialized agencies of the UN (particularly UNDP; ESCAP; United Nations Educational, Scientific and Cultural Organization; United Nations Children’s Fund; World Health Organization; Food and Agriculture Organization; International Fund for Agricultural Development; International Labour Organisation; International Telecommunications Union; and United Nations Environment Programme), and other international organizations.
In addition, institutional and operational arrangements exist between ADB and multilateral development agencies such as the European Investment Bank, European Union, Nordic Development Fund, Nordic Investment Fund, and Organization of Petroleum Exporting Countries Fund for International Development. Close cooperation also exists between ADB and bilateral funding agencies.
Visits, consultations, and exchanges of information regarding operational practices, status of individual projects, and country economic development are frequent between the World Bank and ADB.
Annual Meeting Annual Meetings are occasions for the Governors of Asian Development Bank‘s (ADB’s) 60 member countries to report on the economies and on ADB—its operations, administration, and future directions. Finance ministers and senior treasury officials of member countries, representatives of the multilateral development bank community, investment bankers, nongovernment organization (NGO) representatives, and journalists attend.
Annual Meetings are generally held in May for three days, preceded by a forum of public seminars. Seminars are on topical issues with leading world experts as speakers and panelists.
Every year, the Board of Governors of ADB holds its Annual Meeting in one of ADB’s member countries to discuss progress on the work of ADB and a range of issues related to poverty reduction, international economic and social development, and development finance.
The Annual Meeting traditionally takes place in four sessions: an opening session on the morning of the first day; two business sessions in the morning and afternoon of the second day; and a third business session in the morning of the third day. The Annual Meeting concludes at about noon on the third day.
Prior to the meeting of the Board of Governors, a program of seminars on issues related to ADB’s mandate and member country presentations are held. These facilitate the interaction of member governments with ADB staff, NGOs, media, representatives of observer countries, international organizations, academe, and the private sector.
(See also Office of the Secretary) Anticorruption Policy With the passage of the Anticorruption Policy by ADB’s Board of Directors in July 1998, ADB’s governance work has expanded to include an important subset of issues relating to improving transparency and integrity in government operations.
The Anticorruption Policy has three major elements: supporting competitive markets and effective public administration, in the belief that such preventive measures will be the most effective way to combat corruption; responding to specific case-by-case requests from developing member countries (DMCs) for anticorruption assistance; and ensuring that ADB staff and programs adhere to the highest levels of integrity.
In 1998, explicit anticorruption provisions were incorporated into ADB’s Guidelines for Procurement and Guidelines on the Use of Consultants. These provisions require borrowers, suppliers, and contractors under ADB-financed contracts to observe the highest ethical standards during procurement and execution of such contracts, and allow ADB to reject a proposal for contract award, cancel a loan or portions of a loan, and impose sanctions on firms or individuals in the event of corrupt or fraudulent practices.
The Office of the Auditor General is identified in the Anticorruption Policy as the initial point of contact for allegations of fraud and corruption in ADB projects and among staff members. An Anticorruption Unit was established within the Office of the Auditor General to investigate allegations.
(See also Integrity Division; and Governance and Capacity Building)
Anticorruption Unit
See Integrity Division
Archival Program ADB's Archives preserves and makes available records of permanent value on ADB's history. The Archives acquires and appraises textual records; photographs, slides, and negatives; films and videos; and sound recordings. An on-line archival retrieval service allows staff to access documents electronically through an image scanning system. Asian Currency Crisis Support Facility The Asian Currency Crisis Support Facility (ACCSF) was established in March 1999 as an independent component of the Japan Special Fund. The ACCSF, administered by ADB, is funded entirely by the Government of Japan as part of its financial assistance under the New Miyazawa Initiative to those countries in the region most affected by the Asian financial crisis. The ACCSF assists these developing member countries by helping augment and enhance the financial support extended by ADB.
The ACCSF modalities consists of interest payment assistance (IPA), technical assistance grants, and guarantees. The IPA, technical assistance, and guarantees for the ACCSF financing need to be approved during the three-year period after the establishment of the ACCSF or during such extended period as the Government of Japan and ADB may agree if the beneficiary countries are not fully out of the crisis.
The ACCSF financing is targeted at activities that support policy dialogue, human resource development, institutional strengthening, and other relevant efforts focusing on bank restructuring and corporate debt restructuring; creating or developing sound financial monitoring, supervision, and regulation; enhancing public sector and corporate governance; developing social safety nets; and protecting the environment.
(See also Special Funds) Asian Development Bank Overview
Established in 1966, ADB is a multilateral development finance institution owned by 60 members, mostly from Asia and the Pacific. ADB’s development work is aimed at improving the welfare of the people of Asia and the Pacific, especially of the 900 million poor living on less than a dollar a day.
Within months of adopting its poverty reduction strategy in 1999, ADB began focusing its work toward eliminating poverty in the region. ADB’s projects and programs, whether poverty interventions or otherwise, emphasize one or more of the following priorities: economic growth, human development, gender and development, good governance, environmental protection, private sector development, and regional cooperation.
Each priority is related directly to the three pillars of the poverty reduction strategy: pro-poor, sustainable economic growth; social development; and good governance. Other crosscutting priorities are law and policy reform and social dimensions of development.
ADB’s principal tools are loans and technical assistance, which it provides to governments for specific projects and programs. Technical assistance grants are provided for preparing and executing projects, supporting advisory activities, and undertaking regional activities.
ADB’s headquarters is in Manila. It has resident missions in 14 Asian countries, a regional mission for the Pacific, a country office for the Philippines, and three representative offices in Frankfurt for Europe, Tokyo for Japan, and Washington, DC for North America. In addition, ADB has a Special Liaison Office in East Timor and extended missions in Papua New Guinea and Thailand. ADB’s staff numbers about 2,000 employees from nearly 50 countries.
President
The President is Chairperson of the Board of Directors, and under the Board’s direction, conducts ADB’s business. The President is elected by the Board of Governors for a five-year term, and may be reelected. The President is responsible for the organization, appointment, and dismissal of staff in accordance with regulations adopted by the Board of Directors. Three Vice-Presidents, who are appointed by the Board of Directors on the recommendation of the President, assist the President.
Establishment
The First Ministerial Conference on Asian Economic Cooperation, held in Manila in December 1963 under the auspices of ESCAP (then known as the Economic Commission for Asia and the Far East), passed a resolution endorsing a proposal to establish a regional development bank for Asia. ESCAP then set up a working group of experts to report on the resolution, and that report was circulated to ESCAP’s member governments.
In March 1965, ESCAP set up a Consultative Committee that visited ESCAP member countries and other interested nations to seek their views on establishing ADB. The Committee also prepared a draft of the Charter that, after review by a meeting of officials representing potential participants in ADB, was adopted at ESCAP’s Second Ministerial Conference on Asian Economic Cooperation, held in Manila in November and December 1965. The Charter was signed in Manila at a conference of plenipotentiaries of 31 countries that immediately followed after the ministerial conference and was left open for more signatures in Bangkok until 31 January 1966.
The Charter entered into force on 22 August 1966 with the ratification or acceptance by 16 signatories, whose initial subscriptions made up 65 percent of the authorized capital stock of ADB. The UN Secretary-General acted as the depository for the charter and trustee for the receipt of payments of the first installment of subscriptions toward the share capital.
At the Manila conferences in 1965, a Committee on Preparatory Arrangements for the Establishment of the Asian Development Bank was formed to undertake the necessary initial steps for action by the Board of Governors at its inaugural meeting. The Committee functioned until the inaugural meeting of the Board of Governors in Tokyo in November 1966.
Functions
ADB extends loans and equity investments for the economic and social advancement of its DMCs; provides technical assistance to prepare and carry out development projects and programs, and regional and advisory services; promotes investment of public and private capital for development; and responds to requests for assistance in coordinating development policies and plans of its members.
It provides special attention to the needs of its smaller or less-developed members, and gives priority to regional, subregional, and national projects and programs, which contribute to the region’s harmonious economic growth.
ADB, as a regional development bank, helps mobilize additional resources within the region and attracts investments from outside. ADB is able to finance projects that are neither funded nor adequately financed by existing national and international financial institutions. It also assists regional and subregional schemes of economic development and promotes regional economic cooperation.
Multinational Character
ADB has 60 members—43 from the Asian and Pacific region. The membership includes 40 developing members and three developed members from the region, and 17 industrially advanced and major capital-exporting countries from Western Europe and North America. Of the 12 Directors on the Board, 8 represent regional members and 4 represent nonregional members. The staff is also international in character. All staff members must be nationals of ADB’s members. Organization
ADB has 23 departments and offices at its headquarters, including a Private Sector Group and an Office of Cofinancing Operations. ADB has 14 resident missions—one each in Bangladesh, Cambodia, People’s Republic of China, India, Indonesia, Kazakhstan, Kyrgyz Republic, Lao People’s Democratic Republic, Mongolia, Nepal, Pakistan, Sri Lanka, Uzbekistan, and Viet Nam; a South Pacific Regional Mission in Vanuatu; a country office for the Philippines; a Special Liaison Office in East Timor; extended missions in Gujarat, India and Papua New Guinea; and three representative offices, one each in Tokyo for Japan, Frankfurt for Europe, and Washington, DC for North America. Asian Development Bank Institute The ADB Institute was established in December 1997 through the joint efforts of ADB and the Government of Japan. The ADB Institute (http://www.adbi.org)
aims to explore the most appropriate development paradigms for Asia, composed of well-balanced combinations of the roles of markets, institutions, and governments in the postcrisis period.
The Institute has two major statutory objectives: identifying development strategies suited to the particular social and economic circumstances of Asia’s developing economies, and improving the capacity for sound management of the agencies and organizations in developing member countries (DMCs) engaged in development work.
The Institute aims to conduct research on development issues of critical importance, such as those with longer term and strategic implications for academic and development thinking and policy formation. On a practical level, it will also identify and distill the most promising practices or accepted core principles for development agencies to enhance and strengthen their capacities.
By focusing on concrete policy issues impinging on long-term development tasks in the region, the research is expected to produce the structures and properties of effective postcrisis development paradigms. The ultimate goal is to provide timely and relevant perspectives, examples, and guidelines concerning effective development paradigms and strategies to ADB, its DMCs, and wider policy communities.
The Institute was established within the framework of the ADB Charter to contribute to the development of the Asian and Pacific region. The Dean heads the Institute, which has professional and supporting staff working in two main operational groups: research, and capacity building and training. The Institute also invites scholars, research associates, and interns to contribute to its research programs.
ADB’s Board of Directors reviews and approves the Institute’s strategy, work program, budget, accounts, and annual report. The external Advisory Council provides independent guidance on the Institute’s strategic directions and work programs.
Asian Development Bank Institute Special Fund The costs for operating the ADB Institute are met from the ADB Institute Special Fund, which is administered by ADB in accordance with the Statute of the ADB Institute.
Asian Development Fund The Asian Development Fund (ADF) is designed to provide loans on concessional terms to developing member countries (DMCs) with low per capita gross national product (GNP) and limited debt repayment capacity. The small size and location of countries may also be a criterion for ADF eligibility. The same standards for loan approval and administration that apply to ordinary capital resources (OCR) loans are applied to ADF loans.
- Classification of Developing Members
A revised classification system for ADB’s DMCs was approved by the Board of Directors in December 1998 and took effect on 1 January 1999. Two criteria per capita GNP and debt repayment capacity are used to determine the classification of borrowing DMCs into Groups A, B1, B2, and C. This system determines the degree of eligibility to borrow from the ADF, applicable ceiling on ADB financing, and minimum share of government contribution to technical assistance costs.
The amended ADF loan terms are the following.
For project loans (loans other than quick-disbursing program loans)32-year maturity including an eight-year grace period, 1 percent interest charge during the grace period and 1.5 percent during the amortization period, and equal amortization; and For quick disbursing program loans 24-year maturity including an 8-year grace period, 1 percent interest charge during the grace period and 1.5 percent during the amortization period, and equal amortization. The resources for these loans mainly constitute contributions mobilized under periodic replenishments from members. The replenishments are authorized by a resolution of the Board of Governors.
Group A (ADF only): Afghanistan, Bhutan, Cambodia, Kiribati, Kyrgyz Republic, Lao People’s Democratic Republic, Maldives, Mongolia, Myanmar, Nepal, Samoa, Solomon Islands, Tajikistan, Tuvalu, and Vanuatu
Group B1 (ADF with limited amounts of ordinary capital resources [OCR]): Azerbaijan, Bangladesh, Cook Islands, Marshall Islands, Federated States of Micronesia, Pakistan, Sri Lanka, Tonga, and Viet Nam
Group B2 (OCR with limited amounts of ADF): People’s Republic of China, India, Indonesia, Nauru, and Papua New Guinea
Group C (OCR only): Fiji Islands, Kazakhstan, Malaysia, Philippines, Thailand, and Uzbekistan
In addition, criteria for graduation from regular ADB assistance have been established. Four members—Hong Kong, China; Republic of Korea; Singapore; and Taipei,China—have graduated from regular ADB assistance.
Turkmenistan has not been classified. The Cook Islands has limited eligibility for OCR that will be applied only after the external debt position improves. Indonesia is on a watch list for graduation from the ADF.
- Replenishment
After almost a year of negotiations agreement was reached on 7 September 2000 in Okinawa, Japan, between 25 donor member countries of ADB to replenish the Asian Development Fund (ADF). The agreement provides for lending to ADB’s poorest members over the four-year period 2001–2004. Established in 1973, the ADF is designed to provide highly concessional loans to ADB’s developing member countries with a low per capita GNP and limited debt repayment capacity. Its resources consist largely of contributions mobilized under periodic replenishments. Typically, a replenishment period is four years.
The successful conclusion came after five successive rounds of negotiations in Brisbane (13–14 October 1999), Edinburgh (2–4 February 2000), Chiang Mai (9–10 May 2000), Rome (14–15 June 2000), and Okinawa (6–7 September 2000). The new ADF replenishment amounts to US$ 5.65 billion. Donors agreed to contribute US$2.91 billion to the seventh replenishment of ADF (ADF VIII). The balance of the replenishment (US$2.74 billion) is expected to be met from repayments of earlier ADF loans.
During the negotiations, donors reached agreement on a number of operational priorities for ADF VIII. They included installing a more robust performance-based allocation system for ADF loans, stronger support for good governance in the region, and increased focus on gender equality, environmental protection, and regional cooperation among developing member countries.
On the demand side, ADB is facing several major ADF challenges. Many ADF borrowing countries are still suffering from secondary effects of the Asian financial crisis and are in need of ADF funds to address the social impacts of the crisis. Moreover, new ADF borrowers have emerged in recent years, such as Viet Nam and the Central Asian republics. In the ADF VIII period, 25 developing member countries will be eligible to receive concessional loans, which carry a 1–1.5 percent interest charge.
(See also Treasury Department; and Graduation Policy)
AZE Azerbaijan
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