Asian Development Bank

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Asian Development Bank

 

an international credit institution for financing various development projects in Asian countries.

The establishment of the Asian Development Bank was decided upon at a meeting of the UN Economic Commission for Asia and the Far East (ECAFE), created in December 1965 in Manila, the Philippines. The charter governing the bank went into force in August 1966, when Canada became the 15th country to ratify it. According to the charter, the bank is considered to be in operation when the charter has been ratified by a minimum of 15 member states of the United Nations, representing no less than 15 percent of the authorized capital. At least ten member states must come from the region covered by ECAFE.

The declared basic purpose of the Asian Development Bank is to promote the economic development of the countries of Asia and the Far East by means of investments, financial credit, and technical and other assistance. The bank marshals the necessary resources both by mobilizing the financial means within the region covered by ECAFE and by attracting capital from countries of other continents. Besides employing its own capital, the bank makes use of loans, issues bonds and other obligations, and by special agreements accepts resources for special funds from governments and organizations of individual countries. The US dollar is taken as the basic currency in all operations of the Asian Development Bank.

The basic capital of the bank has been fixed at $1 billion, divided into 100,000 shares of $10,000 each. Fifty percent of the authorized capital is to be paid in by the member states in equal annual quotas over a period of five years. Half of the payment is to be in gold or freely convertible currency and half in the currency of the participating country. The remaining 50 percent of the authorized capital represents a guaranteed fund which the bank management can request from the member states for the purpose of liquidating obligations. The bank makes loans to state organizations and private enterprises at 6.75 percent per annum. National and regional development projects for which funds are allotted must be approved by the bank’s management. The bank’s charter does not contain sufficient guarantees for the channeling of resources to the state-owned sector of enterprises, which has been constantly growing in importance and proportion in many of the developing countries of Asia.

The USA and Japan, each with a share of $200 million in the authorized capital, play a dominant role in the Asian Development Bank. The industrially developed capitalist countries control the greater part of the authorized capital (68.4 percent) and determine the bank’s policy. Their shares, in dollars, are Australia, 85 million; the Federal Republic of Germany, 34 million; England, 30 million; Canada, 25 million; New Zealand, 22.5 million; Italy, 20 million; Holland, 11 million; Austria, Belgium, Denmark, Norway, Finland, Sweden, and Switzerland, 5 million each. The shares which the developing countries of Asia have in the authorized capital of the bank amount to $306 million (31.6 percent) and are distributed, in dollars, as follows: India, 93 million; the Philippines, 35 million; Pakistan, 32 million; Iran, 23.7 million; Malaysia, 20 million; Thailand, 20 million; Ceylon, 8.52 million; Singapore, 5 million; Afghanistan, 4.78 million; Cambodia, 3.5 million; Nepal, 2.16 million; Laos, 0.42 million; and Western Samoa, 0.06 million. The share of the puppet regimes of Taiwan, South Korea, and South Vietnam was $58 million in 1967. The main office of the Asian Development Bank is in Manila. The bank’s management organs are a council composed of representatives of all member states, and a directorate. The bank is headed by a president (Japan’s representative Watanabe in 1967), who is the accredited representative of his country and chairman of the directorate. In all decisions 20 percent of the votes is divided equally among all member states; the remaining 80 percent is distributed in proportion to each country’s share in the bank’s authorized capital.

The imperialist powers, who own more than 50 percent of the authorized capital, in effect possess the right of veto in voting; according to the bank’s charter, all current questions are decided by a two-thirds majority of votes.

The Asian Development Bank is an organization that makes it possible for the economically stronger countries to impose their decisions on the economically less developed states. For this reason the USSR refused to join the bank.

IU. M. AVSENEV

References in periodicals archive ?
An increase in foreign trade revenues, particularly from resources such as coal and copper helped drive the expansion, which was higher than an Asia Development Bank forecast of 6.3 percent, Reuters reported.
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