The Asian Development Bank (ADB) is an international development finance institution established in 1966. It is headquartered in Manila, Philippines and its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. It is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the globe. Its main partners are governments, the private sector, non-government organizations, development agencies, community-based organizations, and foundations.
ADB was conceived amid the post-war rehabilitation and reconstruction of the early 1960s. The vision was of a financial institution that would be Asian in character and foster economic growth and cooperation in the region, which was then one of the poorest in the world. This vision was set on the way to becoming a reality through a resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East in 1963.
During the initial years after its establishment, ADB focused much of its assistance on food production and rural development. Slowly, the bank started giving technical assistance, loans on concessional terms and bond issue. In the 1970s, ADB’s assistance expanded into education and health, and then to infrastructure and industry.
ADB focused on improving roads and providing electricity when the demand spurred for better infrastructure to support economic growth in the Asian countries. When the world suffered its first oil price shock, ADB shifted more of its assistance to support energy projects, especially those promoting the development of domestic energy sources in member countries.
The first bond issued by ADB was in Japan, which was worth $16.7 million. In 1974, ADB established the Asian Development Fund a major landmark to provide concessional lending to ADB’s poorest members. ADB thus helped some Asian economies to improve considerably and graduate from its regular assistance. In the 1980s, ADB made its first direct equity investment and also began to use its track record to mobilize additional resources for development from the private sector.
It continued giving support to infrastructure development, particularly energy projects in the wake of the second oil crisis in the 1980s. To bring its operations closer to their intended beneficiaries, ADB opened a Resident Mission in Bangladesh in 1982 its first field office.
In 1990s, ADB began promoting regional cooperation and forging close ties among neighboring countries through an economic cooperation program in the Greater Mekong Sub region. In 1995, ADB became the first multilateral organization to have a Board-approved governance policy to ensure that development assistance fully benefits the poor.
Policies on the inspection function, involuntary resettlement, and indigenous peoples designed to protect the rights of people affected by a project were also approved. The end of the Cold War also saw expansion of ADB’s membership with the addition of several newly independent Central Asian countries.
However, the spectacular economic gains in the Asian region received a setback in mid-1997 due to a severe financial crisis. ADB responded with projects and programs to strengthen financial sectors and create social safety nets for the poor.
It approved a $4 billion emergency loan to the Republic of Korea its largest single loan and established the Asian Currency Crisis Support Facility to accelerate assistance. Recognizing that development was still bypassing so many countries in the region, ADB adopted poverty reduction as its overarching goal in 1999.
When Severe Acute Respiratory Syndrome (SARS) hit the Asian region in 2003,ADB began providing support at national and regional levels to help countries more effectively respond to the growing threat of avian influenza along with HIV/AIDS.
It also effectively responded to other unprecedented natural disasters by committing more than $850 million for recovery in areas of India, Indonesia, Maldives, and Sri Lanka hit by the Asian tsunami disaster of December 2004 and a $1 billion line of assistance to help victims of the October 2005 earthquake in Pakistan.
In 2008, ADB framed its Strategy 2020, a long-term strategic framework, which pursues three complementary strategic agendas: inclusive growth, environmentally sustainable growth, and regional integration. Its main instruments comprise loans, technical assistance, grants, advice, and knowledge. Although, most of ADB’s lending is in the public sector and to the governments, it also provides direct assistance to private enterprises of developing countries through equity investments, guarantees, and loans. In addition, its triple-A credit rating helps mobilize funds for development.
Strategy 2020 reaffirms both ADB’s vision of an Asia and Pacific free of poverty and its mission to help developing member countries improve the living conditions and quality of life of their people. The strategy identifies drivers of change that will be stressed in all its operations developing the private sector, encouraging good governance, supporting gender equity, helping developing countries gain knowledge, and expanding partnerships with other development institutions, the private sector and with community based organizations.
By 2012, ADB aims to have 80 Per cent of its lending in five core operational areas, identified as its comparative strengths. The areas are infrastructure, environment, regional cooperation and integration, finance sector development and education. ADB will also continue to operate in health, agriculture, and disaster and emergency assistance, but on a more selective basis. The Bank has also developed a corporate results framework to assess its progress in implementing Strategy 2020. Annually, it will monitor implementation through the ADB Development Effectiveness Review.
Over the years, ADB has supported projects in agriculture and natural resources, energy, finance, industry and non-fuel minerals, social infrastructure, and transport and communications. More than half of ADB’s assistance has gone into building infrastructure like roads, airports, power plants, and water- and sanitation facilities.
Such infrastructure helps lay the foundation for commerce and economic growth and makes essential services accessible to the poor. In addition, such assistance also creates an enabling environment for private sector development.
ADB consults people from all sections of society to ensure that its projects, programmes, and strategies address their needs. The Country Partnership Strategy (formerly Country Strategy and Programme), the main planning document at the country level, emphasizes consultations with the government, the private sector, civil society, and all project stakeholders.
The strategy functions as a business plan composed of individual loan and technical ass a. stance projects and programmes planned for priority sectors and themes.
To ensure coherence over a wider geographical area, Regional Cooperation Strategies and Programs are prepared for the five sub regions covered by ADB’s regional oral operations. The various stages that a project undergoes in its planning and execution from country programming to project completions and evaluation is collectively known as ADB’s project cycle.
ADB has contributed significantly in economic and social transformation of Asia and the Pacific boosting economic growth, fostering social development, and helping improve the quality of life for millions of people.