The Asian Development Bank is a regional development bank headquartered in the Ortigas Center in Mandaluyong, Metro Manila, Philippines. It was founded on December 19, 1966. The Asian Development Bank, or ADB, is a major international agency that has a significant impact on India and other countries, particularly in the financial sector. It is also regularly mentioned in the news, making it important for UPSC preparation.

What is Asian Development Bank?

• The Asian Development Bank (ADB) was founded in 1966 and is headquartered in Manila (Philippines). It has 67 members from Asia and the Pacific.
• Japan owns 15.677% of ADB, followed by the United States (15.567%), China (6.473%), and India (6.473%).
• The Asian Development Bank invests in infrastructure, health, and public administration, assisting countries in mitigating the effects of climate change and managing natural resources.
• The Asian Development Bank (ADB) publishes an annual report that details its operations, budget, and other documents for public consumption.

Aims of Asian Development Bank

• The Asian Development Bank (ADB) describes itself as a social development agency dedicated to poverty reduction in Asia and the Pacific through inclusive economic growth, ecologically sustainable growth, and regional integration.
• This is accomplished with an investment of 80% in the public sector.
• This is accomplished through investments in infrastructure, health care services, finance, and public administration systems, as well as other sectors, such as assisting nations in preparing for the effects of climate change or better managing their natural resources.

ADB’s Strategy 2030

• The Asian Development Bank's (ADB) Strategy 2030 charts a course for the bank to respond effectively to the region's evolving demands.
• The Asian Development Bank (ADB) will continue to work to eradicate extreme poverty and develop its vision for a prosperous, inclusive, resilient, and sustainable Asia and the Pacific under Strategy 2030.

ADB’s Strategy 2030

Governance

• In October 1995, a policy document titled "Governance: Sound Development Management" was released.
• The Asian Development Bank described governance as "the way power is exercised in the administration of a country's economic and social resources for development."
• Governance has two dimensions, according to the ADB:
  1. Political – Democracy, Human Rights
  2. Economic – Efficient management of public resources
• The Asian Development Bank (ADB) has highlighted four key aspects of good governance:

1. Accountability

• Officials in government should be accountable for their actions and responsive to the entity over which they have responsibility.
• The review of public sector institutions' economic performance makes them more accountable.
• Building government capacity through public-sector management, public-enterprise management and reform, public finance management, and civil-service reform are some of the suggested specific areas of action.

2. Participation

• Beneficiaries and others affected by government programs and projects should have the chance to enhance the design and implementation of public programs and projects.
• The creation of participatory development processes through, for example, beneficiary engagement, a public/private sector interface, decentralization/empowerment of local government, and collaboration with non-governmental organizations would be the specific areas of action (NGOs).

3. Predictability

• There should be laws and policies that regulate society and are applied fairly and consistently.
• Predictability necessitates the state and its subsidiary agencies to be held to the same legal standards as private businesses and individuals.
• The building of stable legislative frameworks for private-sector development could be a specific area of action.

4. Transparency

• Information should be made available to the general public, and rules and regulations should be clear.
• Access to timely economic information can be critical for private-sector economic decision-making and can also help to prevent corruption.
• All of the factors listed above are interconnected, mutually supportive, and reinforcing.
• Accountability is frequently linked to participation and is the greatest guarantee of predictability.
• Transparency and predictability in the operation of a legislative framework would help to ensure that public institutions are held accountable.

Voting

• The Asian Development Bank (ADB) is based on the World Bank and uses a weighted voting method in which votes are awarded in proportion to members' capital contributions.

Asian Development Bank Member States

Asian Development Bank (ADB) & India

• In 1986, India began receiving assistance from the Asian Development Bank. The Asian Development Bank's mission is to assist India in the following areas:

1. Industrial competitiveness
2. Jobs generation
3. Growth acceleration of low-income states
4. Environmental and climate change challenges

• There are six sectors in India where the ADB’s presence may be found:

1. Transport
2. Finance and public sector management
3. Agriculture and natural resources
4. Energy
5. Water and urban services and
6. Human development

• ADB has assisted/is assisting the following projects in India, which span 25 states:

1. Railways and MRT (mass rapid transit) System.
2. Energy efficiency and renewable energy
3. Coastal defenses
4. Riverbank stabilization and basin management
5. Water management, sanitation, sewage, and solid waste management under urban environmental management

Recent development between ADB & India

• The Asian Development Bank and India have agreed to lend each other $206 million to improve urban services in five Tamil Nadu cities.
• The Asian Development Bank (ADB) has launched its Rs 850 crore 10-year masala bonds on India's global debt listing platform.
• A Conceptual Development Plan (CDP) for the Vizag-Chennai Industrial Corridor (VCIC) was created by INX Asian Development Bank (ADB)
• The Asian Development Bank has granted member countries USD 4 million to combat coronavirus epidemics.
• To combat the COVID-19 pandemic, the Asian Development Bank (ADB) will offer a Rs 100 crore credit to the hospital chain Medanta for healthcare services and medical equipment. Personal Protective Equipment (PPE), basic hygiene supplies, and patient care equipment such as ventilators and beds will be purchased as part of the project.

ADB & Covid-19

The World Bank Group and the Asian Development Bank are coordinating more than $15.4 billion in wide-ranging lending programs in South Asia in response to COVID-19.

Criticism

• Critics have argued that the two primary donors, Japan and the United States, have had substantial influence over lending, policy, and staffing decisions since the ADB's inception.
• The Asian Development Bank has been criticized by Oxfam Australia for being insensitive to local populations.
• "By operating on a worldwide and international scale, these banks can jeopardize people's human rights by implementing initiatives that harm poor and vulnerable areas."
• The UN Environment Program also criticized the bank, claiming in a report that "much of the growth has bypassed more than 70% of its rural people, many of whom are directly dependent on natural resources for livelihoods and incomes."
• ADB's large-scale projects have been criticized for causing social and environmental harm due to a lack of control.
• Environmental and human rights groups claim that the ADB's environmental safeguards policy, as well as rules for indigenous peoples and forced relocation, are frequently disregarded in practice, are too ambiguous or insufficient to be effective, or are simply ignored by bank officials.
• The bank has been chastised for its role in the food crisis and its lack of relevance. Civil society has accused the ADB of ignoring warnings in the run-up to the crisis.
• ADB's large-scale projects have been criticized for causing social and environmental harm due to a lack of control.
• Environmental and human rights groups claim that the ADB's environmental safeguards policy, as well as rules for indigenous peoples and forced relocation, are frequently disregarded in practice, are too ambiguous or insufficient to be effective, or are simply ignored by bank officials.
• The bank has been chastised for its role in the food crisis and its lack of relevance. Civil society has accused the ADB of ignoring warnings in the run-up to the crisis.

Significance

• The growth of capital markets is aided by development banks.
• They invest in the stock and debentures of various Indian enterprises. They also invest in mutual funds and help India's capital markets develop.
• The Asian Development Bank's basic existence is based on the achievement of a specific goal.
• The goal is to help the Asian and Pacific regions prosper economically.

Conclusion

ADB manages more than 50 financial partnership facilities, trust funds, and other funds, totaling several billion dollars each year, that are used to fund projects in Asia and the Pacific that promote social and economic development. The Asian Development Bank (ADB) has raised Rs 5 billion (about Rs 500 crore) through the issue of 5-year offshore Indian rupee (INR) linked bonds.