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Asian Development Bank

ADB logo
Motto Fighting poverty in Asia and the Pacific
Formation December 19, 1966
Type Regional organization
Legal status Treaty
Purpose/focus Crediting
Headquarters Mandaluyong City, Metro Manila, Philippines
Region served Asia-Pacific
Membership 48 countries
President Haruhiko Kuroda
Main organ Board of Directors[1]
Staff 2,500+
Website http://www.adb.org
ADB Headquarters, Manila

The Asian Development Bank (ADB) is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members (as of 2 February 2007)[2], 48 from the region and 19 from other parts of the globe. ADB's vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens.

The work of the Asian Development Bank (ADB) is aimed at improving the welfare of the people in Asia and the Pacific, particularly the 1.9 billion who live on less than $2 a day. Despite many success stories, Asia and the Pacific remains home to two thirds of the world's poor.

The bank was conceived with the vision of creating a financial institution that would be "Asian in character" to foster growth and cooperation in a region that back then was one of the world's poorest. ADB raises funds through bond issues on the world's capital markets, while also utilizing its members' contributions and earnings from lending. These sources account for almost three quarters of its lending operations.

Although recent economic growth in many member countries have led to a change in emphasis to some degree, throughout most of its history the bank has operated on a project basis, specifically in the areas of infrastructure investment, agricultural development and loans to basic industries in member countries. Although by definition the bank is a lender to governments and government entities, it also provides direct assistance to private enterprises and has also participated as a liquidity enhancer and best practice enabler in the private sectors of regional member countries.

The primary human capital asset of the bank is its staff of professionals, encompassing academic and/or practical experts in the areas of agriculture, civil engineering, economics, environment, health, public policy and finance. Professional staff are drawn from its member countries and given various incentives to relocate to Manila.

It is conceivable that once all of Asia-Pacific reaches a certain level of living standard the bank will be wound down or reconfigured to operate as a commercial enterprise.

Asian Development Bank member states      Outside regions      Asia-Pacific region

Contents

Organization

The highest policy-making body of the bank is the Board of Governors composed of one representative from each member state. The Board of Governors, in turn, elect among themselves the 12 members of the Board of Directors and their deputy. Eight of the 12 members come from regional (Asia-Pacific) members while the others come from non-regional members.

The Board of Governors also elect the bank's President who is the chairperson of the Board of Directors and manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and because Japan is one of the largest shareholders of the bank, the President has always been Japanese. The current President is Haruhiko Kuroda.

The headquarters of the bank is at 6 ADB Avenue, Mandaluyong City, Metro Manila, Philippines, and it has representative offices around the world. The bank employs approximately 2,400 people, coming from 55 of its 67 member countries, and with more than half of the staff being Filipino.

ADB Lending

ADB's annual project lending amounts to about US$7 billion per year with typical lending per project being in the $100 million range.

Notable ADB projects and Technical Assistance

  • Afghan Diaspora Project
  • Funding Utah State University led projects to bring labor skills in Thailand
  • Earthquake and Tsunami Emergency Support Project in Indonesia
  • Greater Mekong Subregional Program[3]
  • ROC Ping Hu Offshore Oil and Gas Development
  • Strategic Private Sector Partnerships for Urban Poverty Reduction in the Philippines
  • Trans-Afghanistan Gas Pipeline Feasibility Assessment
  • Loan of $1.2 billion to bail it out of an impending economic crisis in Pakistan and on going funding for the countries growing energy needs, specifically Hydro-power projects[4]
  • Micro finance support for private enterprises, in conjunction with governments, including Pakistan and India.

Effectiveness

Given ADB's annual lending volume, the return on investment in lesson learning for operational and developmental impact is likely to be high and maximizing it is a legitimate concern. All projects funded by ADB are evaluated to find out what results are being achieved, what improvements should be considered, and what is being learned.

There are two types of evaluation: independent and self-evaluation. Self-evaluation is conducted by the units responsible for designing and implementing country strategies, programs, projects, or technical assistance activities. It comprises several instruments, including project/program performance reports, midterm review reports, technical assistance or project/program completion reports, and country portfolio reviews. All projects are self-evaluated by the relevant units in a project completion report. ADB’s project completion reports are publicly disclosed on ADB’s Internet site. Client governments are also required to prepare their own project completion reports.

Independent evaluation is a foundation block of organizational learning: it is essential to transfer increased amounts of relevant and high-quality knowledge from experience into the hands of policy makers, designers, and implementers. ADB’s Operations Evaluation Department (OED) conducts systematic and impartial assessment of policies, strategies, country programs, and projects, including their design, implementation, results, and associated business processes to determine their relevance, effectiveness, efficiency, and sustainability following prescribed methods and guidelines,[5]. It also validates self-evaluations. By this process of evaluation, ADB demonstrates three elements of good governance: (i) accountability, by assessing the effectiveness of ADB's operations; (ii) transparency, by independently reviewing operations and publicly reporting findings and recommendations; and (iii) improved performance, by helping ADB and its clients learn from past experience to enhance ongoing and future operations.

Operations evaluation has changed from the beginnings of evaluation in ADB in 1978. Initially, the focus was on assessing after completion the extent to which projects had achieved their expected economic and social benefits. Operations evaluation now shapes decision making throughout the project cycle and in ADB as a whole. Since the establishment of its independence in 2004, OED reports directly to ADB’s Board of Directors through the Board's Development Effectiveness Committee. Behavioral autonomy, avoidance of conflicts of interest, insulation from external influence, and organizational independence have made evaluation a dedicated tool—governed by the principles of usefulness, credibility, transparency, and independence—for greater accountability and making development assistance work better. Independent Evaluation at the Asian Development Bank presents a perspective of evaluation in ADB from the beginnings and looks to a future in which knowledge management plays an increasingly important role.[6]

In recent years, there has been a major shift in the nature of OED’s work program from a dominance of evaluations of individual projects to one focusing on broader and more strategic studies. To select priority topics for evaluation studies, OED seeks input from the Development Effectiveness Committee, ADB Management, and the heads of ADB departments and offices. The current thrusts are to: (i) improve the quality of evaluations by using more robust methodologies; (iii) give priority to country/sector assistance program evaluations; (iv) increase the number of joint evaluations; (v) validate self-evaluations to shorten the learning cycle; (vi) conduct more rigorous impact evaluations; (vii) develop evaluation capacity, both in ADB and in DMCs; (viii) promote portfolio performance; (ix) evaluate business processes; and (x) disseminate findings and recommendations and ensure their use. OED's work program has also been reinterpreted to emphasize organizational learning in a more clearly defined results architecture and results framework. It entails (i) conducting and disseminating strategic evaluations (in consultation with stakeholders),[7] (ii) harmonizing performance indicators and evaluation methodologies,[8] and (iii) developing capacity in evaluation and evaluative thinking.[9] All evaluation studies are publicly disclosed on OED's website (some evaluations of private sector operations are redacted to protect commercially confidential information).[10] OED's evaluation resources are displayed by resource type, topic, region and country, and date.[11] Learnings are also gathered in an online Evaluation Information System offering a database of lessons, recommendations, and ADB Management responses to these.[12] Details of ongoing evaluations and updates on their progress are made public too.[13]

Beginning 2006, acting within the knowledge management framework of ADB, OED has applied knowledge management to lesson learning, using knowledge performance metrics.[14] Learning Lessons in ADB sets the strategic framework for knowledge management in operations evaluation.[15] Improvements have been made that hold promise not only in OED but, more importantly, vis-à-vis its interfaces with other departments and offices in ADB, developing member countries, and the international evaluation community. In the medium term, OED will continue to improve the organizational culture, management system, business processes, information technology solutions, community of practice, and external relations and networking for lesson learning. Among the new knowledge products and services developed, Learning Curves are handy, two-paged quick references designed to feed findings and recommendations from evaluation to a broader range of clients[16] Evaluation News report on events in monitoring and evaluation.[17] Evaluation Presentations offer short photographic or Powerpoint displays on evaluation topics.[18] Auditing the Lessons Architecture highlights the contribution that knowledge audits can make to organizational learning and organizational health.[19]

Of the 1,106 ADB-funded projects evaluated and rated so far (as of December 2007), 65% were assessed as being successful, 27% partly successful and 8% as unsuccessful.

Criticism

Oxfam Australia has criticized the Asian Development Bank of insensitivity to local communities. "Operating at a global and international level, these banks can undermine people's human rights through projects that have detrimental outcomes for poor and marginalized communities."[20] The bank also received criticism from the United Nations Environmental Program, stating in a report that "much of the growth has bypassed more than 70 percent of its rural population, many of whom are directly dependent on natural resources for livelihoods and incomes."[21]

The bank has also been criticized by Vietnam War veterans for funding projects in Laos, because of the United States' 15% stake in the bank, underwritten by taxes.[22] Laos became a communist country after the U.S. withdrew from Vietnam and the Laotian Civil War was won by the Pathet Lao, which is widely understood to have been supported by the North Vietnamese Army.

In 2009, the bank endorsed a 2.9-billion-dollar funding strategy for proposed projects in India. The projects in this strategy were only indicative and still needed to be further approved by the bank's Board of Directors; however, PRC Foreign Ministry spokesman Qin Gang claimed, "The Asian Development Bank, regardless of the major concerns of China, approved the India Country Partnership strategy which involves the territorial dispute between China and India. China expresses its strong dissatisfaction over this... The bank's move not only seriously tarnishes its own name, but also undermines the interests of its members."[23]

Members

Asian Development Bank - Developing Member Countries (DMC) graduation stages[24]      Outside regions      Asia-Pacific region developed members      DMC graduated from assistance, Group-D      Ordinary Capital Resources (OCR) financing, Group-C      OCR and ADF blended financing, Group-B      Asian Development Fund (ADF) financing, Group-A

ADB has 67 members (as of 2 February 2007).[25] Names are as recognized by ADB.
The year after a member's name indicates the year of membership. The largest share holders of the ADB are Japan and USA, each holding 15.57% of the shares[26]. At the time a country ceases to be a member, the Bank shall arrange for the repurchase of such country's shares by the Bank as a part of the settlement of accounts with such country in accordance with the provisions of paragraphs 3 and 4 of this Article.[27]

Republic of China (Taiwan) initially joined as "China" as a founding member representing the whole of China. However, its share of Bank capital was based on the size of Taiwan's capital, unlike the World Bank and IMF where the government in Taiwan had had a share representing the whole of China prior to the People's Republic of China joining and taking the Republic of China's seat. In 1986, a compromise was effected when the People's Republic of China joined the institution. The ROC was allowed to retain its membership, but under the name of Taipei,China — a name it protests. Uniquely, this allows both sides of the Taiwan Straits to be represented at the institution.

Asian and Pacific region: 48 members
Afghanistan Afghanistan (1966)
Australia Australia (1966)
Cambodia Cambodia (1966)
India India (1966)
Indonesia Indonesia (1966)
Japan Japan (1966)
South Korea Korea, Republic of (1966)
Laos Lao People's Democratic Republic (1966)
Malaysia Malaysia (1966)
Nepal Nepal (1966)
New Zealand New Zealand (1966)
Pakistan Pakistan (1966)
Philippines Philippines (1966)
Samoa Samoa (1966)
Singapore Singapore (1966)
Sri Lanka Sri Lanka (1966)
Republic of China Taipei, China[28] (1966)
Thailand Thailand (1966)
Vietnam Viet Nam, Socialist Republic of (1966)
Hong Kong Hong Kong, China[29] (1969)
Fiji Fiji (1970)
Papua New Guinea Papua New Guinea (1971)
Tonga Tonga (1972)
Bangladesh Bangladesh (1973)
Myanmar Myanmar (1973)
Solomon Islands Solomon Islands (1973)
Kiribati Kiribati (1974)
Cook Islands Cook Islands (1976)
Maldives Maldives (1978)
Vanuatu Vanuatu (1981)
Bhutan Bhutan (1982)
People's Republic of China China, People's Republic of (1986)
Marshall Islands Marshall Islands (1990)
Federated States of Micronesia Micronesia, Federated States of (1990)
Mongolia Mongolia (1991)
Nauru Nauru (1991)
Tuvalu Tuvalu (1993)
Kazakhstan Kazakhstan (1994)
Kyrgyzstan Kyrgyz Republic (1994)
Uzbekistan Uzbekistan (1995)
Tajikistan Tajikistan (1998)
Azerbaijan Azerbaijan (1999)
Turkmenistan Turkmenistan (2000)
East Timor Timor-Leste (2002)
Palau Palau (2003)
Armenia Armenia (2005)
Brunei Brunei Darussalam (2006)
Georgia (country) Georgia (2007)
Other regions: 19 members
Austria Austria (1966)
Belgium Belgium (1966)
Canada Canada (1966)
Denmark Denmark (1966)
Finland Finland (1966)
Germany Germany[30] (1966)
Italy Italy (1966)
Netherlands Netherlands (1966)
Norway Norway (1966)
Sweden Sweden (1966)
United Kingdom United Kingdom (1966)
United States United States (1966)
Switzerland Switzerland (1967)
France France (1970)
Spain Spain (1986)
Turkey Turkey (1991)
Portugal Portugal (2002)
Luxembourg Luxembourg (2003)
Republic of Ireland Ireland (2006)

Notes

  1. ^ http://www.adb.org/About/management.asp
  2. ^ Asian Development Bank (2008). Membership. URL (accessed: 3rd January 2009)
  3. ^ Greater Mekong Subregion, Asian Development Bank, 19 November 2007, http://www.adb.org/GMS/default.asp, retrieved 2007-12-10  
  4. ^ http://feeds.bignewsnetwork.com/index.php?sid=443457
  5. ^ How ADB Evaluates its Policies & Operations - ADB.org
  6. ^ Independent Evaluation at the Asian Development Bank - ADB.org
  7. ^ Resources - Independent Evaluation at the Asian Development Bank
  8. ^ Harmonization Work - Evaluation at Asian Development Bank (ADB) - ADB.org
  9. ^ Evaluation Capacity Development in ADB's Developing Member Countries
  10. ^ Independent Evaluation at the Asian Development Bank - ADB.org
  11. ^ Evaluation Reports - ADB.org
  12. ^ ADB Evaluation Information System
  13. ^ Ongoing Evaluations of ADB Policies & Operation in Asia & the Pacific - ADB.org
  14. ^ Linking to Results
  15. ^ Learning Lessons in ADB: Strategic Framework, 2007-2009 - ADB.org
  16. ^ Evaluation Reports - ADB.org
  17. ^ Evaluation Reports - ADB.org
  18. ^ [1]
  19. ^ Auditing the Lessons Architecture - ADB.org
  20. ^ Oxfam Australia. "The Mekong and Asian Development Bank
  21. ^ IPS. "UNEP faults Asian development project."
  22. ^ Walsh, Denny (2008-04-23). "Laos plot case back in federal court". Sacramento Bee. http://www.sacbee.com/101/story/882584.html. Retrieved 2008-04-23.  
  23. ^ "China slams ADB over India funding". SINA English. 2009-06-19. http://english.sina.com/china/2009/0618/249531.html. Retrieved 2009-06-24.  
  24. ^ ADB Graduation policy
  25. ^ Asian Development Bank (2008). Membership. URL (accessed: 18 April 2009)
  26. ^ Members, Asian Development Bank, 9 February 2007, http://www.adb.org/About/members.asp, retrieved 2007-12-10  
  27. ^ "Withdrawal and Suspension of Members, Temporary Suspension and Termination of Operations of the Bank", Agreement Establishing the Asian Development Bank, Asian Development Bank, http://www.adb.org/Documents/Reports/Charter/chap07.asp, retrieved 2007-12-10  
  28. ^ Taipei,China's profile on the ADB website Joined as "China" representing the whole of China until 1986 when the People's Republic of China joined.
  29. ^ Joined as "Hong Kong"
  30. ^ Founding member; joined as West Germany.

See also

External links

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