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ICR interest coverage ratio IMF International Monetary Fund Immunity from Judicial Proceedings ADB is immune from every form of legal process, unless it chooses to waive such immunity, except in relation to borrowings; guarantees; and the purchase, sale, or underwriting of securities, in which case action may be brought against ADB in a court of competent jurisdiction. Improving the Status of Women ADB recognizes that improving the status of women is integral to achieving its other strategic development objectives, such as poverty reduction, economic growth, and the development of a healthier and better-educated society. Investments that benefit women are widely acknowledged as crucial to development. Poor health, low levels of education and training, and limited access to resources for women not only limit the quality of life for women, but also constrain the contribution of women to economic growth, efficiency, and the sustainability of development. Policies and investments that improve the status of women have specific benefits, such as improved public health, lower infant and maternal mortality, lower fertility rates, increased life expectancy, and reduced welfare costs. In 1998, ADB revised its 1985 Women in Development policy. The revised policy—Gender and Development—which was approved by the Board of Directors in June 1998, provides the framework for ADB’s renewed emphasis and commitment to improving the status of women and to promoting gender equity in its developing member countries. It also provides the institutional framework, initiatives, and mechanisms for achieving that commitment.
(See also Gender and Development; and Human Development) IMT-GT (See
Indonesia-Malaysia-Thailand Growth Triangle.)
Income and Reserves Policy The Income and Reserves Policy of ADB protects its risk-bearing capacity, that is its capacity to withstand unexpected large risk events without seeking additional financial support from its shareholders. The primary benchmark used by ADB in measuring its risk-bearing capacity is the interest coverage ratio (ICR), which broadly indicates to what extent ADB’s income, particularly the income from its loan portfolio, can decrease without jeopardizing its ability to service its own debt from current earnings. In light of its portfolio concentration, ADB’s current policy is to ensure that the ICR does not fall below the level of 1.31. With an ICR of 1.31 times, ADB has the capacity to withstand the nonperformance of its largest borrower and still generate residual net income. ADB’s actual target for the ICR in the medium term could be higher depending on its assessment of its risk-bearing capacity.
To maintain the minimum ICR or achieve a higher targeted level for ICR, ADB ensures that its equity capital or earning base is sufficient to generate the minimum net income requirements. The adequacy of equity capital is managed by maintaining adequate reserves, which constitute the bulk of its equity capital in relation to outstanding loans, the reserve loan ratio (RLR). The current policy is to maintain RLR at about 25 percent over the medium term. Any potential deficiency in such reserves or earning base could be remedied by increasing the level of loan charges.
(See also Financial Risk Management; and Liquidity Policy)
IND India India Resident Mission (See
Departments and Offices.)
Indigenous Peoples Indigenous peoples can be regarded as one of the most vulnerable segments of society. While differing significantly in terms of culture, identity, economic systems, and social institutions, indigenous peoples in Asia as a whole most often reflect specific disadvantages in terms of social indicators, economic status, and quality of life. Indigenous peoples often cannot participate in processes that affect them and often do not benefit equally from the rewards of development. While constituting a relatively small part of the population of ADB’s region, indigenous peoples and their potential vulnerability must be regarded as significant.
(See also Indigenous Peoples Policy; and Protection of Vulnerable Groups)
Indigenous Peoples Policy In 1998, ADB approved its Policy on Indigenous Peoples. Recognizing the real and potential vulnerability of indigenous peoples in development processes, the policy requires ADB to ensure that affected indigenous peoples are at least as well off as they would have been in the absence of the ADB intervention or that adequate and appropriate compensation is provided. The policy works to ensure that indigenous peoples are given equal opportunities and that interventions affecting them are
consistent with the needs and aspirations of affected peoples; compatible in substance and structure with affected peoples’ cultural, social, and economic institutions; and conceived, planned, and implemented with the informed participation of affected communities.
The Policy on Indigenous Peoples was developed in close consultation with representatives of indigenous peoples’ communities in ADB’s developing member countries.
When an intervention has an adverse and significant impact on indigenous peoples, an indigenous peoples’ development plan must be prepared. The plan should address issues and concerns related to affected populations and, as appropriate, should examine measures to avoid or mitigate negative effects, or outline compensation and assistance to be provided when negative effects cannot be avoided. The indigenous peoples development plan becomes an integral part of the intervention’s design and includes specific provisions to measure success in implementation and in the delivery of benefits. Indonesia Resident Mission (See
Departments and Offices.)
Indonesia-Malaysia-Thailand Growth Triangle The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) consists of the two Indonesian provinces of North Sumatra and Daerah Istimewa Aceh; the four northern Malaysian states of Kedah, Penang, Perak, and Perlis; and five provinces of southern Thailand—Narathiwat, Pattani, Satun, Songkhla, and Yala. Following the request for assistance from the governments of the three countries in 1993, ADB conducted a study and prepared a development strategy for IMT-GT to promote regional economic cooperation in this growth area. The overall goal is to accelerate private sector-led economic growth and development in IMT-GT.
The initiatives identified seek to
promote foreign direct investment and facilitate economic development of the subregions by exploiting underlying economic complementarities and investment opportunities, enhance international competitiveness for direct investment and export production, lower transport and transaction costs, and reduce production and distribution costs through economies of scale.
(See also Growth Triangles) Industry and Nonfuel Minerals Sector In the industry sector, ADB seeks to encourage and support the effective operation of markets and a level—playing field for competition and trade. Generally, this entails reduced government involvement in production and is achieved by establishing market-oriented and outward-looking policies, promoting reforms in state-owned enterprises, and encouraging privatization. In addition, ADB supports the development of small- and medium-sized enterprises through targeted assistance to improve their operating environment and to overcome limitations in their access to credit. However, in situations where the market cannot be relied on to produce the most desirable outcomes, ADB plays an important role in identifying and introducing the most efficacious interventions. ADB is also supporting reforms in the trade sector to facilitate better regional cooperation and integration of its members in the global economy.
Information Confidentiality and Disclosure
In 1994, the Board of Directors approved a policy providing for transparency and disclosure in all areas and aspects of ADB activities and operations; and establishing procedures for its implementation, including a revised classification system concerning release of documents relating to the public and private sector operations of ADB. The policy has been in effect since 1 January 1995.
The policy is designed to encourage debate and a two-way flow of information; ensure local participation in decision making and ownership of decisions; broaden understanding of ADB’s role and support for its mission; and facilitate cooperation and coordination with others having common goals Information Management
In October 1999, ADB launched its Financial Management and Human Resource Management Information System (FM/HRMIS) Project, a major component of ADB’s Information Systems and Technology Strategy for 1998–2002, which will result in the migration of ADB’s major application systems to a client/server technology environment.
The FM/HRMIS Project aims to strengthen ADB’s delivery of its development services by streamlining, automating, and integrating business processes in the human resource, finance, treasury/banking, and project/product areas. Information access, quality, reliability, and timeliness will improve with the introduction of better business practices and processes founded on an integrated software package. Information Policy and Strategy
The Board of Directors approved in 1994 an Information Policy and Strategy to deliver ADB’s messages more effectively in member countries. The policy codifies ADB’s information requirements and objectives, while the strategy identifies the key messages ADB should deliver, its target audience, and the most cost-effective modes of delivery. (See also Business Information; Office of External Relations; and INTEGRA)
Infrastructure, Energy and Financial Sectors Departments (East and West) (See
Departments and Offices.)
INO Indonesia Inspection Function Policy The inspection function policy, approved by the Board of Directors in 1995, establishes formal procedures for any community, organization, or other group affected by an ADB public sector project to assert that the formulation or implementation of the project was inconsistent with ADB policies to the material detriment of that group. The community, organization, or group making a request for inspection must present reasonable evidence that its rights or interests have been or are likely to be directly, materially, and adversely affected as a result of ADB’s failure to follow its operational policies and procedures in connection with the project concerned.
An applicant must first raise its grievance with Management. If the applicant is not satisfied with Management’s response, it can submit a request for inspection to a six-member committee of the Board of Directors (the Inspection Committee), which will decide whether to recommend an inspection to the Board of Directors. The Board of Directors will consider the recommendation. If the Board authorizes an inspection, a panel composed of at least three individuals from a standing roster of independent external experts will be formed to carry out the inspection.
The panel’s report will identify all relevant facts; determine whether ADB has complied with its operational policies and procedures; and recommend, if appropriate, any remedial changes in the scope or implementation of the inspected project. The panel’s report and Management’s response to it will be considered by the Board of Directors for an appropriate decision. ADB’s inspection function policy and procedures are discussed further in ADB’s Inspection Policy: A Guidebook. INTEGRA INTEGRA is ADB's internal project initiated to replace application systems for Human Resources and Payroll, Core Finance, and Operations with an off-the-shelf integrated software solution. It is a major component of ADB's Information Systems and Technology Strategy for 1998–2002. With INTEGRA, the majority of ADB application systems will be migrated to a modern client server technology environment. INTEGRA aims to improve internal operations as well as service to ADB's clients. "Oracle Applications" was selected as the integrated software solution for the project. Integrity Division
The Office of the Auditor General
of ADB established an Integrity Division (originally Anticorruption
Unit) to handle all matters related to allegations of fraud
and corruption and fulfill other responsibilities assigned to
the office under ADB’s Anticorruption
Policy, approved in July 1998. Under the supervision of
the Auditor General, the Integrity Divsion determines whether
fraud, corruption, and abuse has occurred; gathers sufficient
evidence; designs procedures to follow in attempting to identify
the perpetrators, the extent of the fraud, corruption or abuse,
the techniques used, and the cause of the fraud, corruption
or abuse; and determines if controls need to be implemented
or strengthened to reduce future vulnerability, and designing
tests to help disclose the existence of similar fraud, corruption,
or abuse. The Integrity Division will also conduct project procurement-related
audits to help prevent and detect fraud, corruption and other
forms of abuse, and will advance awareness of the Anticorruption
Policy and procedures, including provide training in forensic
accounting and other investigative techniques.
Interest and Other Charges During Construction In 1983, ADB reviewed and revised its policy on financing interest and other charges payable to ADB on its loans during construction or implementation. The review took into account the economic difficulties of its developing member countries, and ADB’s local cost financing policy adopted that same year. Under the revised policy, ADB may provide “interest and other charges” financing for its loans from ordinary capital resources and concessional resources from the Asian Development Fund during the construction period.
(See also Lending) Involuntary Resettlement Policy The policy on involuntary resettlement, approved by the Board of Directors in 1995, formalizes and strengthens ADB’s approach to the issue of a population displaced by a development project. The policy enunciates the following objectives and principles.
Involuntary resettlement should be avoided wherever feasible Where population displacement is unavoidable, it should be minimized. Displaced people should be compensated and assisted so that their economic and social future would be generally as favorable as it would have been in the absence of the project. Affected people should be fully informed of and consulted on resettlement and compensation options. Existing social and cultural institutions of resettlers and their hosts should be supported and used to the greatest extent possible and resettlers should be integrated economically and socially into host communities. The absence of a formal legal title to land should not be n obstacle to compensation. As far as feasible, involuntary resettlement should be conceived and executed as a part of the project. Full resettlement costs and compensation should be included in presenting project costs and benefits. Resettlement costs and compensation may be included in ADB loan financing for projects.
The policy requires an initial social assessment of every development project from 1996 onward. Where significant involuntary resettlement is necessary, ADB will provide the government concerned and other project sponsors with necessary capacity-building support.
(See also Broad-Based Development Institution; and Country Operational Strategy Study)
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