One well-known financial institution is the Asian Development Bank (ADB). It operates at the regional level, issuing long-term loans intended for the implementation of a number of large projects. The Asia-Pacific region is the basis of its functioning region.
Opening a bank and its development
The UN is the initiator of the creation of this organization. In 1965, at the XXI session, it was decided to form such a financial association as the Asian Development Bank. The purpose of creating this organization was primarily in the fight against poverty. At that time, the task of eradicating poverty was very urgent in the Asia-Pacific belt. The bank was opened at the end of the following year, 1966.
In the 60s of the last century, the main activity of this organization was aimed at developing rural areas and supporting food production. By the end of the decade, the bank provided technical assistance, and also issued its first loan on favorable terms and placed the first long-term bonds in Germany.
At the very beginning of its activity, the Asian Development Bank managed to unite 31 states in its composition. It should be noted that membership in this financial organization can be granted to any country that is a member of the UN. It doesn’t matter which region of the planet this state belongs to. That is why the number of members of the Asian Development Bank reached 64 by 2005. Among them, there are quite a lot of undeveloped countries (approximately 37% of all shares of the bank are in their share). Manila, the capital of the Philippines, is currently the headquarters of ADB (the head office is shown in the photo below).
Bank management
Oddly enough, the main levers of influence in this organization are in the hands of states with developed economies. The fact is that the votes of members are distributed depending on how many shares they have in the bank. That is why the bulk of the votes belong to rich and successful countries.
For example, take Japan and China. The latter owns 5.5% of the vote in ADB, while Japan has almost 13% at its disposal. At the same time, Australia has a small population of 5%.
ADB structure
The Board of Governors is the main body in the structure of this financial organization. His competence includes control over activities carried out by the Board of Directors, election of its members. The Governing Council consists of representatives delegated from each member of ADB. Every five years, the bank’s main body elects its president. The president himself, as well as eight of the twelve members of the Board of Directors, must certainly represent the Asian region. This condition is mandatory, it is enshrined in the adopted charter.
The biggest influence in ADB belongs to Japan. This state, along with the United States, has the highest number of votes in the bank. In addition, Japan is a state in the Asian region, so it has an impact on the functioning of all governing bodies of the Asian Development Bank. In the entire history of this organization, the head of the bank (its director) was a representative of Japan.
Financial activities
During ADB's operations, its registered capital grew at a very fast pace. For example, the starting capital of an organization in 1966 was $ 1.3 billion. After 15 years, it increased to 10 billion, and by the beginning of the 21st century, the bank had accumulated about 50 billion US dollars.
The main creditors (and shareholders) in this financial institution are economically the developed countries. Poor (developing) countries are ADB's main borrowers (recipients). It should be noted that lending in this bank takes place on favorable terms for Asian countries.
Fixed assets
The bank that interests us has two main funds for lending to investment projects in the states of the region. We list them:
- A regular fund that provides loans on traditional terms of business (for up to 25 years). About 65% of ADB loans are issued from this fund.
- A special fund that provides loans on concessional terms with low interest rates, ranging from 1 to 3%. The period for which this money is taken can reach 40 years. About a third of all loans issued account for this fund of the bank.
As a rule, the Asian Development Bank provides loans to government organizations. For example, in 2004, out of 64 projects, 58 were funded by ADB under the guarantees of the governments of the respective states. In monetary terms, the total loan amount is estimated at approximately $ 5.3 billion.
According to the total number of loans, the following countries were leaders in 2004:
- India (about 1.25 billion dollars).
- China (loans of 1.16 billion dollars).
- Pakistan, borrowed 709 million dollars.
- The Philippines, which took 446 million dollars.
The Asian Development Bank is most willing to finance various infrastructure and transport projects. In addition, microfinancing aimed at the development of small business in the countries of the region has recently entered the practice of its activities. Since the main role in managing this financial organization belongs to such countries as Japan, the USA and Australia, it is their firms that receive loans for the implementation of their projects most often.
Will there be a single currency in Asia
It may well be that soon a single currency similar to the euro will be introduced in Asia. At least this is part of ADB's plans. This idea is planned to be implemented in several stages. First, it is supposed to introduce a single currency (akyu) only in electronic form, intended for virtual operations and settlements. The Asian Development Bank plans to set its course as the average value of fourteen national currencies (China, South Korea, Japan, etc.). Experts in the field of economics predict that the introduction of a single currency by ADB will contribute to the formation of a single market in this region. There is a significant likelihood that the akyu will be able to compete on equal terms with the dollar and the euro.
ADB in the countries of the former USSR
Members of this bank are also some countries of the former USSR. These include all the states of Central Asia, as well as Azerbaijan and Armenia.
There is, for example, the Asian Development Bank in Kazakhstan, its representative office is in Astana. More recently, on August 20, 2015, ADB approved a loan of $ 1 billion for this country, which became its member back in 1994, as Kazakhstan had previously announced the devaluation of the tenge. This step was intended to reduce the negative economic consequences associated with the establishment of a free exchange rate of the national currency in the country.
Since August 1997, the Asian Development Bank has been operating in Uzbekistan. This country became a member of the financial institution of interest to us in August 1995. The head of the ADB office in Uzbekistan is T. Konishi. This country is today considered the fifteenth largest shareholder of the Asian Development Bank among regional members, as well as the fourteenth largest borrower.
The financial institution that interests us in 1998 provided significant assistance to Kyrgyzstan, allocating $ 5 million to it to eliminate the consequences of natural disasters. Kyrgyzstan has been a member of ADB since 1994.
ADB and Russia
For quite some time now, there has been discussion about whether to become a member of such an organization as the Asian Development Bank, Russia. Some experts believe that this step would play a positive role in the cooperation of our country with the APEC countries.However, the Asian Development Bank has not yet made a decision. Today, Russia and ADB are cooperating in a number of aspects. For example, our state participates in the activities of this bank as an observer. Experts believe that only our weak economic ties with ADB hinder our country's integration into ADB Asian countries region.
