MUHAMMAD SAAD SALEEM (0046)

MUBASHIR WAZIR (0146)SYED ABDUL WAHAB (0119)

“UNIVERSITY OF CENTRAL PUNJAB”

PRESENTED BY:-

“FINANCIAL MANAGEMENT”

Presentation On:

“Asian Development

Bank”Submitted To: PROF. Hamza

ASIAN DEVELOPMENT BANK:Introduction: The Asian Development Bank (ADB) is a regional development bank

established on 22 August 1966 to facilitate economic development of countries in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly known as the United Nations Economic Commission for Asia and the Far East) and non-regional developed countries. From 31 members at its establishment, ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside. ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with member's capital subscriptions. At present, both the United States and Japan hold 1,656,189 shares each, the largest proportion of shares at 15.65% each. China holds 684,000 shares (6.46 %), India holds 672,030 shares (6.35 %), the 2nd and 3rd largest proportion of shares respectively.

Asian Development Bank

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 elects 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 Takehiko Nakao.

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 3,000 people, coming from 55 of its 67 member countries, and with more than half of the staff being Filipino.

HISTORY ADB was originally conceived by some influential Japanese

who formulated a "private plan" for a regional development bank in 1962, which was later endorsed by the government. The Japanese felt that its interest in Asia was not served by the World Bank and wanted to establish a bank in which Japan was institutionally advantaged. Once the ADB was founded in 1966, Japan took a prominent position in the bank; it received the presidency and some other crucial "reserve positions" such as the director of the administration department. By the end of 1972, Japan contributed $173.7 million (22.6% of the total) to the ordinary capital resources and $122.6 million (59.6% of the total) to the special funds. In contrast, the United States contributed only $1.25 million for the special fund.

Takeshi Watanabe served as the first ADB president from 1966 to

1972.

MEMBERS• ADB has 67 members .

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. 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.

• 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 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.

BASIC FACTS• A multilateral development bank, founded in 1966• A working partnership of 63 members• 33 borrowing members

SHAREHOLDERS• 45 regional members• 18 non regional members• Japan and the United States, coequally the largest shareholders (15.8% each 

DISTINGUISHING FEATURES• Asian character• Concern for small economies• Particular emphasis on regional and sub regional cooperation• An evolving institution

ORGANIZATION• Governors and Alternate Governors• Directors and Alternate Directors• President• 4 Vice-Presidents• Over 3,000 employees, 55 nationalities

HEADQUARTERS AND OFFICES

PARTNERS• Governments• Other international organizations• Civil society, including non-government organizations( 

International Union for Conservation of Nature (IUCN) and the World Wide Fund For Nature (WWF).

• Private sector

THE POVERTY CHALLENGE• About 900 million people survive on less than US$1 per day

STRATEGIC AGENDA

• ADB supports the Millennium Development Goals• The Asia and Pacific region has achieved the Millennium Development Goal of

reducing extreme poverty by half even before the 2015 deadline• Long-Term Strategic Framework

Core areas:

- Sustainable economic growth- Inclusive social development- Governance for effective policies and institutions

Crosscutting strategic themes:

- Private sector in development

- Regional cooperation and integration

- Environmental sustainability

• Medium-Term Strategy

POVERTY REDUCTION STRATEGY• Pro-poor, sustainable economic growth• Social development(The aim is to reduce poverty & inequality)• Good governance(The key outcome of the Program will be

improved governance and lower incidence of corruption) among the people)

ACTIVITIES OF ADB• Makes loans• Provides technical assistance• Provides information ORDINARY CAPITAL RESOURCES• Borrowings• Paid-in capital from shareholders• Accumulated retained income (reserves)• Repayment of loans

SPECIAL FUNDS• Asian Development Fund• Technical Assistance Special Fund• Japan Special Fund• ADB Institute Special FundTRUST FUNDS MANAGED BY ADB• Japan Scholarship Program• Japan Fund for Poverty Reduction• Japan Fund for Information and Communication Technology• Channel financing of grants from bilateral donorsTECHNICAL ASSISTANCE• Preparing and implementing projects• Providing advice• Supporting regional activities• Loan-financed technical assistance

LOAN APPROVALS, 2015• $5.7 billion for 89 loans, 71 projects• Average loan size: 1 million• Major borrowers: India, Pakistan, Indonesia, and Viet Nam

LOANS BY SECTOR, 2015• Transport and communications, 28%• Energy, 18%• Finance, 15%• Social infrastructure, 12%• Agriculture and natural resources, 9%• Others 18%

HIGHLIGHTS IN 2015• Reorganization of ADB• Assistance to Afghanistan & Sri Lanka

ADB OPERATIONAL CYCLE• Country Strategy and Program and its Update (5 years

and 3 years)• includes Concept Papers for lending and non-lending

products (”project pipeline”)• Project design for loans and grants

UNITED NATIONS DEVELOPMENT BUSINESS The United Nations launched Development Business in

1978 with the support of the Asian Development Bank, the World Bank, and many other major development banks from around the world. Today, Development Business is the primary publication for all major multilateral development banks, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business a mandatory requirement.

STRATEGY 2020 Strategy 2020 is The Long-Term Strategic Framework of

the Asian Development and wide strategic framework to guide all its operations to 2020. It 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. Strategy 2020 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

CRITICISM• Since the ADB's early days, critics have charged that the two major donors,

Japan and the United States, have had extensive influence over lending, policy and staffing decisions.

• 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." 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."

• There had been criticism that ADB's large scale projects cause social and environmental damage due to lack of oversight. One of the most controversial ADB-related projects is Thailand's Mae Moh coal-fired power station. Environmental and human rights activists say ADB's environmental safeguards policy as well as policies for indigenous peoples and involuntary resettlement, while usually up to international standards on paper, are often ignored in practice, are too vague or weak to be effective, or are simply not enforced by bank officials.

SUMMARY

• ADB is the premier development agency for the Asian and Pacific region

• Its vision: A region free of poverty