You are here
Home > In The News > Pulling millions out of poverty…

Pulling millions out of poverty…

Large financial institutions like the World Bank, IMF and KfW lend for countries and projects across the globe. ADB funds countries in the Asia Pacific region.

My recent visit to the Asian Development Bank, Manila, provided the opportunity to look at the impact of a global financial institution in funding the economic development of some of the poorest regions in the world.
The sprawling ADB complex has on its rolls close to 4000 employees drawn from across the globe. Ramesh Subramanian, Director General-South East Asia, mentioned that around half of these experts will constantly be on the move to appraise loan applications, monitor the progress and performance of projects, and offer expert advice. Also a few hundreds will be visiting ADB headquarters on consultations, to attend seminars on current and emerging issues.
ADB assists its members and partners by providing loans, technical assistance, grants and equity investments to promote social and economic development. It is composed of 67 members, 48 of whom are from the Asia Pacific region. Conceived in the early 1960s, ADB has been funding increasingly large quantum of funds. In 2017, the annual operations reached a record $32.2 billion. Under Strategy 2030, ADB will expand its vision to achieve a prosperous, inclusive, resilient and sustainable Asia Pacific while continuing to focus its efforts to eradicate extreme poverty.

How it raises funds

ADB raises funds through bond issues on the world’s capital markets and relies on its members’ contributions, retained earnings from its lending operations, and repayment of loans.
In 2017, of the total operations of $32.2 billion, $20.1 billion was in loans grants and investments from its own resources; $11.9 billion in co-financing from bilateral and multilateral agencies and other financing partners and $201 million in technical assistance.

India a large beneficiary

ADB commenced operations in India in 1986 and so far committed 209 sovereign loans totalling $35.9 billion. The new ADB country partnership strategy 2018–2022 for India “aims to support the country’s effort to accelerate inclusive economic growth focussing on boosting economic competitiveness, creating good jobs, building inclusive infrastructure and services in low income states and addressing challenges relating to climate change and the environment.” ADB also fosters regional cooperation, private sector development, institutional capacity building and knowledge- sharing. India receives roughly 10 per cent of ADB’s total lending limited to $4 billion a year.
Several experts from India including from the IAS enrich the talent pool of ADB. With their deep insights they have been endeavouring to get the maximum mileage out of the funded projects.

Kudos for Tamil Nadu

Tamil Nadu enjoys the reputation for preparation of credible applications for funding as also in executing these to perfection. The applications for funding included the Chennai Metro Rail – Phase II, Urban Flagship Investment Programmes that cover building smart solutions for 10 cities, sewage networks across cities, Chennai – Kanyakumari industrial corridor, 640 km of upgradation of state roads, smart water management, and a climate resilient project. A senior official expressed his admiration for the professionalism of the project planners and executioners of Tamil Nadu.
Prosperous countries of the region have moved out as borrowers. A surprising nugget of information was China that lends massively to several developing countries, continuing to apply and receive funds for some of its provinces. For good reason: they value the appraisal and documentation systems much more than the funds! – SV

Leave a Reply

Top